I’ve started reading Thomas Friedman’s new book, Hot, Flat and Crowded. Here’s an interesting passage, comparing America’s history of energy consumption with Denmark’s since the early ‘70s:
Contrast this with how one small European country, Denmark, behaved after 1973. “We decided we had to become less dependent on oil,” Connie Hedegaard, Denmark’s minister for climate and energy, explained to me. “We had a huge debate on nuclear, but in 1985 we decided against it. We decided to go instead for energy efficiency and renewable energy. We decided to use taxation, so energy was made relatively expensive and therefore people had an incentive to save and do things in their homes to make them more efficient . . . It was a result of political will.”
Premium gasoline in Denmark in 2008 was about $9 a gallon. On top of that, Denmark has a CO2 tax, which it put in place in the mid-1990s to promote efficiency, even though it had discovered offshore oil by then. “When you get your electricity bill you see your CO2 tax [itemized],” the minister said. Surely all of this killed the Danish economy, right? Guess again. “Since 1981 our economy has grown 70 percent, while our energy consumption has been kept almost flat all those years,” she said. Unemployment is a little less than 2 percent. And Denmark’s early emphasis on solar and wind power, which now provide 16 percent of its total energy consumption, spawned a whole new export industry.
“It has had a positive impact on job creation,” said Hedegaard. “For example, the wind industry – it was nothing in the 1970s. Today, one third of all terrestrial wind turbines in the world come from Denmark. Industry woke up and saw that this is in our interest. To have the first-mover advantage, [when we know] the rest of the world will have to do this, will be to our benefit.” Two of the world’s most innovative manufacturers of enzymes for converting biomass to fuel – Danisco and Novozymes – also come from Denmark. “In 1973 we got 99 percent of our energy from the Middle East,” says Hedegaard. “Today it is zero.” I know: Denmark’s a small country and it is a lot easier to make change there than across a huge economy like ours. Nevertheless, it’s hard to look at Denmark and not see the road not taken.”
Every page of Friedman’s book has these kind of insights.
And what about the road not taken? After a promising period in the US of increased vehicle efficiency from 1976 to 1985, we lost the plot. Reagan rolled the effeciency standards back, slashed the budgets of alternative energy programs, let tax incentives for solar and wind start-ups lapse (several of those companies were bought by Japanese and European firms, who jumpstarted their own renewable industries). Bush the Elder made a few steps in the right direction, then abandoned efforts after the Gulf War. During the Clinton Administration, the three big automakers and the United Auto Workers brought the whole process to a grinding halt. Detroit lobbied the government to label SUVs as “light utility trucks” so they wouldn’t have to meet the 27.5 mpg for cars. Nothing much has changed during the W years . . . actually it has, for the worse. Post 9/11, rather than encouraging us to buckle down, W said, “Go shopping.” And instead of instituting a gas tax, which could’ve helped rebuild our energy and transportation infrastructure, he went for a massive tax cut, making us more dependent on China to finance our defecit and Saudi Arabia for gas. But back to the fuel efficiency thing, in 2007, the standard was ordered up to 35 mpg (where Europe and Japan are already) . . . to take effect by 2020. Twelve years from now! Give me a break. And on the addiction goes. And on the missed opportunities go.
Will the next president have the vision to reverse this losing trend? Not if they say, “Drill, baby, drill.”
