
While Washington was bailing out Detroit, President-elect Obama made two crucial appointments: he named Steve Chu as his secretary of Energy and Carol Browner as an energy coordinator or "czarina." It seems to me that the two posts neatly frame the two aspects of the effort to create a Clean Energy System—what we might call the clean energy predicament. Chu is a Nobel laureate in physics who has led a green-tech, clean-fuel effort that brings together scientists, the government, and BP; Browner's experience is with the Environmental Protection Agency, which she led during the Clinton Administration. Producing new energy, or protecting the environment—in the Energy-Climate era, which is more important? Is it possible to do both?
How we are going to do either without a price signal—i.e. gasoline or carbon tax—beats me. Consider this headline from CNNMoney.com on Dec. 22: "After nearly a year of flagging sales, low gas prices and fat incentives are reigniting America's taste for big vehicles. Trucks and SUVs will outsell cars in December, according to researchers at the automotive Website Edmunds.com, something that hasn't happened since February. Meanwhile the forecast finds that sales of hybrid vehicles are expected to be way down."
Have a nice day.

Ideas:
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.
Heck the North Eastern States could all adopt a $2 a gallon tax which would help cut down on tax avoidance by going to lower cost states to fill up for the most part and they could show all of us the error of our low gas tax ways.
Before all 308 million of us jump on board is it so much to ask that the biggest proponents of such a tax go first?
December 28th 2008, 9:52 pm
Another two reasons to raise the gas tax. If the US public doesnt take the windfall of cheap oil the oilproducers will. A gas tax would provide a clear source of repayment for the debt that must be sold to rebuild infrastructure. This is far preferable to simply printing the money and hoping the rest of the world continues to fund US debt. There is already an international competition for funding infrastructure projects. One of the ways to be a winner is to have a way to pay for it.
December 28th 2008, 3:21 pm
I heard that the greatest influence on reducing cancer was not any medical detection or remediation measure, but instead has been the cigarette tax. If that's true, it helps make the point that a gasoline tax is the best remedy for our addiction to oil.
December 28th 2008, 2:23 pm
Additional benefit of up-front money and high Federal gasoline tax:
Money talks.
So long as there are economic supports for Big Oil - free usage venue (highways), drilling incentives and no clean up fees, Big Oil will be king until there is no more oil or us. Any "road" or other tax they pay is pittance and charged mostly to the user.
Money does talk and that is why up-front money - in form of Federal Income Tax rebate followed by per gallon Federal Tax - specifically to repay the rebate (not to highway trust fund) will change our behavior.
In these trouble economic times having $2000 up-front could allow many people of modest means to repay credit card or other high interest short term debt - sort of borrowing from future energy expenditure and therefore spur future conservation.
Read my gas tax plan: www.geocities.com/dpierce3
December 28th 2008, 10:46 am
We must take both the short term fix and the long term plan...
the fix:
A. Short term - 1040 rebate followed by equal (say about $2/gal) gasoline tax: for more details see www.geocities.com/dpierce3.
B. Long term - three prong: 1. education and tax incentive (locally) foreign aid (globally) and availability of birth control. Other wise famine pestilence and war will continue to be in charge.
To do this we must obviate the power of those who want large population for their own purposes.
2. conservation - we must push rather than ridicule the small car, the home vacation, the sweater and coll house the cottage rather than the Mcmansion - opposite of last 50 years. Tax incentives/penalties and getting rid of tax breaks that favor consumption are the only ways otherwise the profit motive restores this imbalance. Specifically we need carbon and clean up taxes and to get rid of housing deduction above 1.5 times average cost, to require 50 % of all retirement plans to be in federal green bonds and to add green requirement to all federal legislation. Additionally all oil exploration subsidy must stop now.
3. invention - this is natural if not stymied by petro-oligarchy. Thermo/photo electric from blacktop, algae bio-diesel. vertical axis wind turbines in all new construction, coal powered electricity with all waste heat and CO2 feeding sewage treatment/ algal bio-fuel producing facilities are all just a few of the ideas suppresssed by present energy providers.
Again - you can see details of the benefits of my upfront 1040 rebate/2 dollar federal gas tax plan at:
www.geocities.com/dpierce3
December 28th 2008, 10:24 am
Thank you for Hot Flat and Crowded. While at times it was depressing, it left me with hope that we can solve these issues.
A few issues struck me while reading your book.
1. In your discussion of Outgreening, a great concept, I found it interesting that what you described on p.335 how be green was similar to how Deming promoted creating products using Total Quality Management. When Detroit was using TQM in the 80's they seemed to do better. It seems to no longer be a focus. Deming also emphasized that consumers pay for any waste created so efficiency and quality were key.
- Another key point Deming emphasized was not buying on price Tag alone but look at the total cost because products with higher quality have a lower overall cost - just like green products. Overall, the green movement seems like it could gain a great deal by using TQM principles as outlined by Deming.
2. I was surprised you did not mention the impact food has on the environment. A great amount of research has demonstrated how our animal based diet consumes excessive energy, is fossil fuel intensive, and also is bad for our health. This research suggests a move away from an animal based diet would have multiple benefits beyond health. Using price signals, such as paying the true cost for beef would help here also. Again a government regulation issue.
- Also, the increased number of cows desired by the West has led to destruction of rain forests so 3rd world communities could raise cattle to be sold to the West. An issue I had not thought about before was the methane, you explained that methane is a potent greenhouse gas and the extra cattle raised for beef means more methane.
3. Overall, I see a match with many of the things you are suggesting and my research in health that shows people are more motivated to act for a gain rather than a non-loss. That is people want some tangible benefit for their effort more than the absence of something that might happen. (my research demonstrates people want a better life in some tangible form - a gain, not just the absence of illness - a non-loss) In the case of ecology, if we prevent global warming problems, things remain as they are, no gain - it is a nonloss. To motivate people to adhere to a green movement, we must demonstrate gains. I liked your focus on a growing economy with the new energy future should be key. I believe this is something Al Gore should have emphasized - he did not highlight any gains, just catastrophic losses.
- You documented this in your book when you discussed the "Arks" in Indonesia. People became motivated to do something when they were shown how to get more out of their land rather than save the orangutan. On page 309 you explained, "[focusing on] what was in it for them and not just the orangutan." If the orangutan benefits and the community doesn't, "we lose the foundation for protecting the whole."
Overall, thank you for outlining a great plan to help America lead in the ECE. I was happy to see the Obama team seems to have a strategy that matches up well with your plan. He even put Dr. Chu in charge. I am hopeful and am anxious to assist. Please advise as to how I can help.
Be Wellr,
Craig M. Becker, Ph.D.
December 27th 2008, 2:25 pm
Mr Friedman, Many thanks for Hot Flat and Crowded. Very inspiring and it opened my eyes to many issues. I have recently built small hotel in the Polish mountains, close to border with Ukraine and Slovakia, that utilises only renewable sources of energy. It was not cheap, but gave me and my guests enormous feeing of freedom from changing prices, policies, weather conditions, etc.. It really changed viepoint and started to change behaviour of my guests, neigbours and local administration. Feeling of independence is something (or should be) more important than money. And price signals, although important, are only tool for achieving this independence.
Sincerely,
Andrzej Czech
www.ecofrontiers.net
December 27th 2008, 4:56 am
Hey Friedman, your mom is hot, flat, and crowded!
December 27th 2008, 12:23 am
Thomas,
The root cause is so much deeper than prices, you know this. We have allowed too many generations of Americans to exit the public education system without a fundamental understanding of the value of their own thinking and continued education. People the world over are reactive; so few take the time to ponder the impact and implications of their decisions. Consumer marketing and "conventional wisdom" has substituted for original thought for over 100 years. We cannot teach people how to think for themselves and to search for knowledge and wisdom by applying bandages (such as taxes, policies or laws), only by rebooting the system we call public education.
I suggest a 100-year project to reframe our understanding of education, making it an aspect of our daily lives that starts at conception and extends to a few days after death. I invite your input, and that of your readers, on www.allnewpubliceducation.com where the discussion has begun on the indications and extent of the problem, the solutions, and the transition to that solution. I suspect you will recognize some of your thoughts there.
Many thanks for the impact that you and your books have had on me and so many others.
Stephen Dill
http://www.allnewpubliceducation.com
srd@srdinteractive.com
December 26th 2008, 12:02 pm
Here's something typical of what's out there:
"Walmart: We Are Not Green"
http://blogs.wsj.com/environmentalcapital/200...
Lee Scott Jr. has earned a reputation as something of an environmental guru for actions he has taken over the past few years in getting Wal-Mart Stores Inc. to green up its act.
But this morning at the ECO:nomics conference in California, the president and CEO of the retail giant took some attendees aback by flatly declaring: “We are not green.”
Mr. Scott was actually being candid when a questioner asked how he could reconcile why Wal-Mart’s carbon emissions were continuing to grow despite its much-publicized efforts to reduce its carbon footprint. He said Wal-Mart is trying, but it also needs to grow at the same time. In fact, Mr. Scott said, “I haven’t a clue,” when asked when he expected the company to meet his stated goal of having zero waste and 100% renewable energy over time.
December 25th 2008, 4:34 pm
Rick S wrote: "Once again, the US shows little ability to think strategically, and instead demonstrate that its political system can only handle crises. When our backs are to the wall, we work well."
The shorter version: "Americans can be counted on to do the right thing after they have exhausted all other alternatives." (Winston Churchill)
December 25th 2008, 2:57 pm
It appears that price increases are the only truly effective methods to reduce the use of fuel. When gas and diesel prices were $5+ in our region, I saw real changes in the way people conducted themselves. Considering the short-term fluctuations in fuel prices, which apparently give some incentive for maintaining the status quo, what are your thoughts on how to keep people fucussed on the realities of their long-term decisions?
December 25th 2008, 4:04 am
I agree with you completely Mr. Friedman. There needs to be a price signal, as you call it. As for price signals, I would favor a gas tax. The cap and trade system is also good, but needs to be applied globally. If it isn't, then those who abide by it, will suffer in the global markets by having higher energy costs than those who don't. As for the gas tax, that is mostly a tax on consumers and would have less effect on US global competitiveness. I believe Obama is missing a golden opportunity, despite the recession, and "kicking the can downfield." Once again, the US shows little ability to think strategically, and instead demonstrate that its political system can only handle crises. When our backs are to the wall, we work well. Otherwise, we live eternally in "short termism," with lobbyists ultimately controlling the country. I'm not saying that Obama is controlled by lobbyists, but he doesn't have the backbone to raise gas prices to $2.50-2.75 a gallon, a level that the country was until very recently looking at as a great price. As a result, his energy policy will likely fail, because alternative energy is not competitive with low energy prices. How do you spend billions to provide jobs in an industry that has no chance of succeeding? Some day there will be a breakthrough, but it probably won't occur with oil prices at $37 a barrel.
Nonetheless, Happy Holidays. This time of year is an important time to share with loved ones. This sort of thing is more important than eternal GDP growth anyway.
December 24th 2008, 11:34 pm
Because:
1) The problems are so huge that no one person will be able to solve them (observed several times by Thomas in HFC); and,
2) Relatively few will read HFC (as observed by Susan below)...
It strikes me that we need a way to harness people's "constructive" ideas "as they think of them", and have a way to organize them. It is frustrating to see good ideas buried in these blog comments.
Part way through reading HFC, the idea of an "Energy Technology Revolution Wiki" began to make sense to me. I think I even did a search to see if one existed yet on the Internet, and couldn't find one.
Since that time, I read the book "Tribes" by Seth Godin, which practically formulates the prerequisites, strategies and tactics of building a groundswell movement.
If anyone knows how to create a "wiki" that is easy to use, and could organize it into the major problem areas Thomas has defined in HFC (climate change, petro-dictatorships, clean-cars, education etc.), then people could focus on building on each others' ideas in a constructive way.
So,
a) Read Tribes;
b) Think about which part of the revolution you'd like to lead or contribute to; and
c) If a Wiki doesn't exist by then, start one.
If I knew how to create one I would, but am keen to contribute once it's there. I think many would be. Anybody have connections with Jimmy Wales and Larry Sanger (founders of Wikipedia) or other successful wiki-growers? If the government allocated seed money to people who wanted to start or manage one, that could help, too.
Finally - to address the immediate question Thomas asks above regarding oil prices, there should be a section of the E-T Wiki that explains the current global oil supply- demand-"price signal" relationships, to illustrate the effect of price signals and supply changes.
December 24th 2008, 8:00 am
I sincerely hope we could figure out and let everyone understands why the petrol price is in such a volatile manner? You may want to take this into your Chapter 18.
The current slump in petrol price making people so confused. Most of people was estimating the petrol is only one way train i.e. up. But now it is going to another way i.e. bottom. Why? Speculation or insufficient regulatory control? Recession so badly hurt the demand? Or the hedge funds are all dead?
I was most convinced by Paul Krugman's statement that he mentioned the oil price went up was not due to the speculation but real demand driven. He simply proved this by the depleting amount of inventory. It seems so strange that the drop in demand should not be so drastic in just couple of months. Paul may yet to figure out there are many other factors behind this. The price is not going back up much even after the OPEC's cut.
After we understand the volatile oil price better, then we have good foundation to work on price signal.
Why not you try to work on this together with Mr. Krugman?
December 24th 2008, 2:32 am
Are America consumers supposed to be 90 day suckers? We've seen major swings in gas prices before but I don't think anyone would say this latest low is typical or a good reason not to reform our bad habits. Driving though Huizhou on Sunday I pointed out a Prius passing us on the highway to a Chinese friend and asked him if hybrids were becoming more popular in China. He asked why and I felt obliged to remind him of the endless gray haze that surrounded us.
December 23rd 2008, 11:39 pm
Hey goofy looking mustache boy, "detroit bashing" stereotyping, never bother to check my facts, Friedman...check this article out. Looks like this is quite a bit better than the model T...hmmmm, am I bothering you with facts. Hope your working hard to minimize your carbon footprint.
http://latimesblogs.latimes.com/uptospeed/200...
Ford has grabbed the fuel-economy crown in the nation’s largest car segment — just in time to see gasoline fall to its lowest price in five years.
Ford said today that its new 2010 Fusion hybrid has been certified by the EPA at 41 mpg/city and 36 mpg/highway, with a combined rating of 39 miles per gallon. That beats the hybrid versions of its competitors in the mid-sized sedan segment (at least based on their 2009 EPA ratings): the Toyota Camry (33 city/34 highway); Chevy Malibu (26/34); and the Nissan Altima (35/33)
December 23rd 2008, 9:39 pm
I agree with Kate that education is the key. A great many, if not most, Americans will not read the New York Times or a book like HFC. The explanations contained in the book of the interrelationships of the issues, especially the chapters about petrodictatorships and being on the cutting edge of new technologies and the business opportunities that would provide, would help to invoke Americans' sense of patriotism as a goad to change behavior. Mr. Friedman, have you considered doing a television program that would distill the concepts into a format that could reach less academic people? I envision something along the lines of Carl Sagan's "Cosmos". It needs to be on network television so that it can be seen by people from all backgrounds and education levels to raise their understanding and awareness of our situation.
December 23rd 2008, 5:09 pm
Every time I bring up the gas-is-bad argument, I invariably get a response of, "Oh, but hybrids are too expensive. They'll never sell widely.".
I have heard that Toyota was expecting a drop in profits. I wonder if they would benefit from dropping the price on their hybrids, taking a gamble that a significantly lower price would mean many more sales. Combined with a press release/Obama-blast from Chu and Browner, this could accelerate the spread of hybrids considerably.
And, if the big 3 did the same thing, then we might really have some sort of clean-car revolution... But again, it comes down to what price to set, and also what other "sticks" to use as further impetus, because I think you're right in saying that we need some sort of gas tax or carbon tax to send a signal that we're getting serious about this.
December 23rd 2008, 4:16 pm
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