Without a Price Signal...

Thomas Friedman’s latest book, Hot, Flat, and Crowded, deftly explores our increasingly unstable world that has become defined by decades of excess and often deleterious business practices. This book illustrates both the complexity and severity of our environmental situation, while simultaneously calling for a global revolution to address these problems.

Innovation must be a critical aspect of this revolution, but traditional innovation methods will prove to be untimely and insufficient in addressing such a wide scope of urgent issues. Code Green will require extensive collaboration to be successful; thus, we must approach this challenge with a fresh perspective about how to harness and best utilize the world’s abundant innovation resources.

NineSigma currently works with companies across industries who are investing extensive resources in new energy technologies, renewable materials, manufacturing efficiencies and other sustainable practices to address this global dilemma. We leverage our open global network of innovators and cast a wide net in order to identify potential breakthrough innovations in other industries or disciplines that can be applied to the challenge. High power conversion systems, energy harvesting, improved power sources for appliances and solar power in automobiles are just a few of the many challenges for which we are currently identifying solutions with our clients.

We are eager to further discuss Code Green and the role of innovation in Mr. Friedman’s challenge, and would welcome any feedback his readers have for us. Our business model and experience has put us in a unique position to accelerate the introduction and application of breakthrough sustainability solutions, and enable industry collaboration where it wouldn’t otherwise exist. We are actively seeking opportunities to bring leading innovation companies together to address challenges surrounding global sustainability. It is only through collaborative innovation and the rapid cross-pollination of knowledge that we will obtain a clear view of how to tackle today’s biggest challenges.

Matthew Heim
President
NineSigma, Inc.
www.ninesigma.com

I am in great favor of going underground. After learning of the great resources of the constant temperature of the earth in the famous '6 feet under' area that can be harvested in the warmth of the earth itself using geothermal power on a more massive scale could help in many areas of this planet. Of course as Tom says being an eclectic is necessary to have a full development for all parts of conservation and a green economy to be effective. I wish the current technology and the old electric cars of gm would be put back into production as well as the other current technologies be more widely understood and applied in a practical stage.

Mr. Friedman,

This is not really a response to the price signal but more of one to an idea I read in your book. In the chapter "If it isn't Boring, It isn't Green," one key point you made that I love is when you compared the Energy Internet to the World Wide Web. More specifically, your idea was that by producing a common platform for "electrons to flow freely," people will write energy efficiency programs to share around the world (much like open source software).

I enjoy this section so much simply because it ties in with an idea I have for utilizing the cloud we have created over the past several years. I have studied and researched cloud computing rather extensively, and the more I read about it, the more I see its potential for helping to accelerate the changes necessary for a green revolution. I understand the negative impacts it can have, some of which you explained in The World is Flat, but I see it as a possible worldwide "Collectivist Movement." I'm sure you have heard about crowdsourcing and its increased use among companies today (If not, in short it is the act of taking a task traditionally performed by an employee and "outsourcing" it to a relatively large group of people for completion), but what you wrote about in Hot, Flat, and Crowded directly ties into the idea of crowdsourcing. If the smart grid is implemented, the cloud could empower individuals to collaborate and produce new ideas on energy efficiency through localized programs. To sum it all up, the power companies could crowdsource (allowing communities) to collaborate with each other, setting their own standards for energy efficiency. With all appliances connected to each other and the smart grid, online communities could develop new ideas for more energy efficiency. More collaboration means more innovation AND, crowdsourcees are paid by the power companies.

These cloud communities could also act as a free liason service to China and India and any country in the world. Making this a global effort is the most challenging of all and with the cloud, the world can be updated in real time on our newly developed ways to cut energy use and cost while simultaneously providing their own ideas to our communities. Just like code can be reused in online communities, IDEAS can be relayed everywhere in the world that there is a connection. If you think about it, using the system correctly with the speed at which information can travel today, we could possibly cut the estimated time period for implementing a working strategy to significantly reduce carbon emissions while developing a market for a renewable energy system.

I know that the idea above is a stretch based on theory, but my main point is we all need to consider the possibilities the technological revolution produced and utilize the abilities it created for us to help eliminate our economic and environmental troubles. We got ourselves into this mess and the best and quickest way to get out is to put all 6 billion or so minds together in search of a common goal. The only feasible way to do that is through using the cloud.

Adam

How can the auto companies be bailed out?
There is lot of debate on whether the big 3 GM, Chrysler and Ford should be bailed out by the government. Should they be allowed to go bankrupt and create millions unemployed? What and how the government can help the auto burst out? The companies are like an unemployed alcoholic person, the more you give him money the more he will drain in beer and come again begging for more. Many are still skeptical after the billion dollar bail out will the company stay for another year. There is huge possibility of them begging for money in next quarter.
Bad decision by management of these companies like making and promoting big trucks even when gas rate were rocket high, not producing or concentrating on energy efficient vehicles, giving damn shit to global warming, labor union and lobbyism, has created this type of grim situation for these companies wherein the CEO has to work for $1 salary. Adding to these hitches, the subprime crisis and credit crunch has escorted customers to not buy any vehicles further on. With US economy or rather world economy slump down, car sale seems to be difficult. US government has never tried to create a good mass transportation for an American is born with two hands and four wheels. The bigger question is will this bail out help the companies to come out of the self created mess. Is there any added plan of action which could help these auto monsters?
Concentrating on making energy efficient cars is the essence of the moment. There is need for more economy cars than those gigantic useless trucks. Investing on electric car could be helpful but with such economic crisis and gas prices at bottom rock seems to be difficult and impossible. Other way to eluding the customers is making high quality car at lower price which should be done on urgent basis. Removing the union contract could help in some way to decrease the cost of cars. The above few methods could help them in small way, but a revolutionary change can bring a huge change. US is short of mass transit. Investing in mass transit vehicles could help these companies. Auto Company should sign a contract with big car rental companies by providing them cars at a minimal cost for 5 years or so and in exchange get some profit from the rental companies. After years of use the company can buy back the cars and use many of its components and use it in making in new cars. Make the manufacturing greener. Reuse it well whatever possible, recycle whatever that can be recycled, and thus eliminate waste. Auto industry should concentrate more on transportation business rather than selling unsold cars and pushing them in the market. This can benefit both the rental companies who change cars after ever few years and the auto company who wants to sell cars every year. Instead of making big trucks why not make buses or vans which can be used as mass transit vehicle. Contracts with state government for creating such vehicles for state transportation can boost sale and also make everybody happy. Governments as they are able to produce mass transportation solutions, Auto Company can make profit on the vehicles and public can get affordable transportation. Green supply chain management will play a crucial role in Auto shore here after. Breaking the union contract is one more viable option.
After every recession there is a bigger reform to come. History shows that bigger the recession bigger are the reforms. Hope this recession brings greater changes for the good. Mr. Obama has got elected in tough times. Create new jobs, stabilize the prevailing economy, and restructure the organization you will be hero greater than Martin Luther King or else be the successor or Bush…
-Anil Jain
Clemson USA.

I stumbled across this site in my endeavour to track down and make some sense of this credit crunch/environmental mess we are in. Having just read through the other comments and as yet not having had the pleasure of reading HFC I feel the future is in the hands of our children and their education/life skills and for me personally eco-art! Less talk and more peaceful actions.

Hi Tom,

I very much enjoyed your book especially your comments on climate change. I have a question rather than a comment and it is this - What role do you see meteorologists or weather experts playing in the Re-Generation era in the near future?

Thank you,
Randall P. Benson, PhD

Dear Mr. Friedman:

I am a big follower of your writings and recently finished your latest book, Hot, Flat and Crowded which I enjoyed very much. However I (along with many others I am sure) have been deeply missing your expertise on the Middle East ever since you turned your attention to globalization and more global issues.

I would like to bring your attention to the teachings of Mahatma Gandhi and their relevance in a hot, flat and crowded world. Of all the Mahatma’s teachings (Ahimsa, racial and ethnic equality and reconciliation), none is more relevant today than what he had to say about consumption and man’s relationship with earth’s natural resources. As with everything else, the Mahatma lived by example by consuming as little as possible and living the most natural and organic of existence. Larry Collins and Donimique La Pierre said it best: “Not a few of Gandhi’s ideas which once appeared an old man’s quirks have become, five decades after his death, strangely relevant in a world of dwindling resources and expanding populations. Cutting up old envelopes to make notepads, rather than wasting paper, consuming only the food necessary to nourish one’s frame, eschewing the heedless production of unneeded industrial goods, protecting the air we breathe and the water we drink, appear, as a world turns to a new millennium, not so much a set of charming eccentricities as a prescription for man’s uncertain future on his exhausted planet”.

Growing up in India, our textbooks were full of easily understandable examples from the Mahatma’s life demonstrating his teachings on consumption. One of the stories that I am particularly fond of, was about an incident that occurred in a South African train that he was traveling in. A white gentleman who was seated next to Gandhi was rather annoyed by the fact that his companion was a non-white and shabbily dressed (in the western sense) Indian. After several minutes, he handed Gandhi a wad of papers filled with derogatory caricatures of Gandhi that the man had put together in the train. Gandhi however, thanked him profusely in response because he could re-use the paperclips that kept the wad together.

I firmly believe that the Mahatma’s teachings are in some (significant) way responsible for India’s laughably low per capita energy consumption. Our family, not poor by any means especially by Indian standards, had a strict requirement of all its members: turn off the light bulbs and ceiling fans when you are the last person to leave a room in the house. My mother used to get a count of the number of rotis (Indian bread) each of us were planning to consume for dinner before she started cooking. These are just two of many examples I can remember from home and school that demonstrated a healthy respect for conservation.

I am certain that there are many things people around the world can learn by reading the Mahatma’s teachings on living a simple life. His foresight on issues such as energy poverty, global warming, pollution, and the corruption that excess consumption breeds are only now being fully understood.

Ashif Panakkat

P.S.: On a sad side-note, it has been my observation after seven years here in the US, that many of us Indians lose our ethic of conservation once we get settled into the American lifestyle.

Wonderful and much needed book - thank you.

There is one area I wish you had written about, although I understand why you did not. That is the part being played in global climate change by the greatest areas of the Earth's land surface - the savannas and grasslands, which dwarf our forests. While the burning of our forests is stupid and tragic, it is completely overshadowed by the burning of the world's grasslands. While most forests burn once, the same grassland burns repeatedly - over 2 billion acres are burnt annually in Africa alone. And as the research shows, a one and a half acre grassland fire puts out more and more damaging pollutants than 4,000 cars per second.

I would like to send you more information - too long for comment here. Could I please have an email address to which I can send a paper I wrote recently to guide the two organizations I founded that are dealing with root cause of what is really a single issue - world-wide biodiversity loss, land degradation (desertification) and global climate change - massive environmental malfunction. Without biodiversity loss there is no desertification. And desertification, as you rightly point out in your reference to Brazil's forest loss, itself leads to climate change. Biodiversity loss and it's symptom desertification had already destroyed many civilizations in all climates world-wide long before we discovered and used coal and oil. As I point out in that paper, if we were by some miracle able to stop all fossil fuel emissions 100% tomorrow we would still fail to address the problem because the other two legs of this three-legged stool would remain unaddressed. I look forward to sending you more information. If for some reason you are reluctant to provide an email address to which I can send an attachment, you, or anyone else, could locate the paper (bottom left in section under my name in the web site below)
Sincerely,

Allan Savory
Founder Holistic Management International
www.holisticmanagement.org

Inelastic? Really? Then why did demand for gas drop as the price increased?

OPEC does have influence over the price, but OPEC also knows that if the price goes too high that it will make alternative sources more attractive, thus it is constrained in what it can charge.

If you are really and truly concerned both about OPEC and giving money to countries that don't like us very much -- as John McCain said ad nauseum -- then I assume you favor increasing domestic development of oil supplies, no? I also think that the argument about handing over money to countries that hate us is overstated. Take a look at the top 15 sources of imported oil and tell me which ones hate us:

http://www.eia.doe.gov/pub/oil_gas/petroleum/...

Of the 15 I can only think of two -- Saudi Arabia and Venezuela -- that promote policies hostile to our own. If you include Russia that makes 3.

Look, if the price of oil goes too high then alternatives will make economic sense and we will pursue them without government intervention in the market. And if the price doesn't go high then we have nothing to worry about. Indeed, spending $20K on a hybrid when you can get a conventional auto for $15K when oil is cheap is penny wise and pound foolish. Promoting such policies only serves to make us poorer.

With regard to your last two points, air quality in the US has actually been on the upswing for at least the past couple of decades. Man made climate change, meanwhile, I believe is either vastly overstated. I think the narrative there is already starting to unravel.

To the extent government should intervene it should simply to increase the gas tax to the point that it accounts for negative externalities. Make prices reflect costs, then let the chips fall where they may. If people continue to rely overwhelmingly on petroleum, fine. The notion that Thomas Friedman -- or anyone else -- has the insight to accurately predict what industries we should be promoting or what types of energy sources we should be relying on is absurd in the extreme.

Thanks,

Colin

http://togetrichisglorious.blogspot.com/

Well, what the current price is telling us is that petroleum-based energy sources aren't in any imminent danger of running out. So really it seems that conservation efforts aren't needed. You are promoting a solution in search of a problem.

You probably need additional chapters 19 and 20 and more to do justice to the many issues and possible solutions and the way out of this mess. HFC (and now busted) could address the current global economic meltdown and indications that no one really knows where this expanding crisis will end.
While many factors contribute to the crowded and flat situation, marketing is one field of activity that can be singled out for attention. For over 30 years I have seen Kotlerism and the numerous clones of marketing texts preach the gospel of finding and satisfying “needs” which invariably and/or inevitably become/include wants and desires for stuff we don’t really need at all … thein the creation of new Americas in all parts of the world. And while marketing is the pivotal commercial activity here, the whole body of business training programs and research which shape our academic degrees and thereupon business attitudes and practice need a total rethink with a view to a new paradigm in line with the energy-climate era.

Hyperion, Toshiba, others, race to produce "personal" nuclear power.
Using technology licensed from the U.S. government, an Arizona-based company is planning to bring a new generation of miniature nuclear reactors to market. The Hyperion Hydride Reactor is not much larger than a hot tub, is totally sealed and self-operating, has no moving parts and, beyond refueling, requires no maintenance of any sort. The reactor will output 27MW, enough to power a community of 20,000 homes, says Hyperion Energy, makers of the new reactor. The first models will roll off the assembly line in five years.
Unlike conventional nuclear reactors, the Hyperion design uses no water for cooling, meaning it can be sited anywhere. It is designed to be covered in concrete and then buried while in operation, to reduce the risk of tampering. The reactor must be excavated every 7-10 years for refueling, but can otherwise be left entirely undisturbed.
"Our goal is to generate electricity for 10 cents a watt anywhere in the world", says Hyperion CEO John Deal.
Deal says that more than 100 orders have already been placed, from both the oil and electricity industries, as well as developing nations. The small size of the reactor makes it ideal for smaller, isolated communities which can therefore avoid the heavy cost of high-power electricity transmission lines.
Since power is produced 100% of the time, the total energy output is more than 15 times what the world's most powerful 400-foot tall 5 MW wind turbine will produce. The total cost is estimated at $25 million USD. It generates no greenhouse gases while in operation and, when one takes into account the total amount of resources used during manufacture, is said to have much less of a carbon footprint than even wind or solar power.
"We now have a six-year waiting list," says Deal. "We are in talks with developers in the Cayman Islands, Panama, and the Bahamas".
The reactor uses a uranium hydride core, surrounded by hydrogen gas. The fuel is not enriched to weapons-grade, meaning it can't be used for building a nuclear device.
Hyperion plans to eventually have three factories mass-producing the reactors, a step which will further reduce costs and increase the number available.
Toshiba is also working on its own mini nuclear reactor, the "4S", which the company says stands for "super-safe, small, and simple". The 4S is based on a smaller 10 MW design that can last 30-40 years before refueling. The 4S is sodium-cooled, and uses liquid lithium-6 to moderate the reactor, instead of conventional control rods. Like Hyperion's design, the reactor is totally sealed and requires no maintenance or operation.
Toshiba says the reactor will make power available for as little as 5 cents/kWh. A demonstration version of the 4S is planned to be online in 2012, and will be sited in the Alaskan village of Galena. After that, Toshiba plans to offer the 4S for sale throughout North America and Europe.

Startup firm NuScale is also working on its own mini reactor design.

This may be a bit off the trend of the postings I've read from earlier today however after reading 2 books (Moneyball and Hot, Flat, Crowded) while on vacation last week it got me thinking about how I could support companies who are doing the "right" green things so that their respective technologies will advance for all of us. Does anyone know of a fund or funds (vanguard, fidelity, others) that allows small investors to make a difference by investing their IRA's in green energy concerns? Thanks.

I say that we do BOTH - a GASOLINE tax, and a CAP-and-TRADE tax. Why? When ignorance and inertia prevail, an external wake up call is in order. I mean, clearly 40 years of warning has not worked folks.

A serious gas tax ($3-$5/gallon)like enacted many years ago throughout Europe would help to force us to take a close look at our driving habits (sorry-no change without pain), and to stop the Big 3 in Detroit from building and selling 6,000 pound vehicles to drive to the grocery store and around town at 12 mpg.

As painful as it was, seeing $4.50/gallon gas forced a lot of us into a new reality. As a result, for a brief period in 2008, there was a mass sell-off of gas guzzlers. Now, we need to hurry and crush them all up into scrap before they are bought back by the less than nimble minded who are thinking the gas crisis is over with gas prices lower.

A Cap-and-Trade system seems to be well-suited to industry. Voluntary efforts can bring rewards-if they want to make the effort. Those who must remain gross polluters can either fix it, or pay for others to fix it on their behalf.

What worries me about this method is that it passes through many stages, and lots of hands, and might end up being as convoluted as the financial sector. God knows we do not need another black hole like that to pour $400B into and not know where it went or what it did for us and the environment.

Delving into this whole energy/climate predicament over the last year, I have many more questions than answers. Yet, there are a some key points that have bubbled to the top, such as:

1) The U.S. is deeply entrenched as BIG oil energy users. Addicted. All dials and knobs set to HIGH.

2) Our government has been asleep at the wheel on these issues for many, many years.
Especially since the U.S. refused to ratify the Kyoto Principle, we have become an outsider (dumb as we wanna be) to the realities of the need for change.

3) The electic distribution grid is outdated to handle renewable energy production and economics. For example, large solar farms are always in the boonies.

Guess what! No way to move that much power over the existing system. To top it off, environmentalists are trying to block construction of the needed electrical infrastructure to move it from point A (remote location) to point B (you and me). A big OOPS!

I love nature as much as anyone out there. Yet I say do it, do it now!

4) Hot, Flat, and Crowded has put a worldwide face on this crisis. So even if we do everything we can in the U.S., we very much need the cooperation and understanding of the faster-growing economies to really make an impact on a global crisis.

And while President-elect Obama is at it, let's set aside a few billion to update our electric distribution system to handle all of the solar panels on homes and solar production in the desert. Geothermal, wind, tidal and whatever else we can make happen.

I know about disruptive technologies. Seen the change it makes on several occasions. What I have learned is that it is not always fun at first (i.e. lots of challenges and some chaos), there can be a lot of foot dragging, and it takes a few really good rocket scientists to make it all work right.

Let's all hope and pray that the next 8 years are as intensely focused on these issues as the last 8 were so indifferent, and all these best and brightest Cabinet appointees can bring about the changes that are in our path to a better life for our children's children.

Michael Dean

Anon. wrote:
"May I just ask if this Idea is so great why has it not been adopted in more liberaly inclined states? Nothing stops CA, NY, or MA from charging $2 a gallon in tax."

For one thing states don't have resources to up-front offer much of a refund, and if they did they might be in danger because:
at least in many smaller states residents living at or near the borders after they had the refund, and any travelers going through would fill up just outside the state.
Furthermore it is very divisive to have part of the nation saving and another part doing nothing - the World would stop calling us "United" States.
NO it has to be federally funded and nationwide.
I just don't think that any Pol has the Cahunas to do this - only possibly Obama.
see:
www.geocities.com/dpierce3