Sunday, October 5, 2008

Thomas L. Friedman: Hot, Flat, and Crowded

Wow! I’ve read fun books, exciting books, and informative books. Thomas Friedman’s Hot, Flat, and Crowded just might be an important book. I enjoyed his The World Is Flat, although I was way behind the world in reading it. I thought he made some very clear and coherent points about the international market place, and how silly some politicians sound railing against forces of economics and free enterprise. So when I heard him pitch his new book on Good Morning America, I thought I ought to pick it up.

Freidman’s subtitle for the book is “Why we need a green revolution – and how it can renew America.” I’d summarize it as a discussion of global warming and the energy crisis in a context of a global economy. I’ve always been skeptical of global warming. Taking Michael Crichton’s perspective (in State of Fear), it seems that if you keep adding concrete and asphalt around measurement sites, you will record temperature increases, regardless of what is happening globally.

Freidman starts by making his case for five major problems we face today. First, the global economy is creating too many countries just like America, consuming resources as Americans do. Second, our dependence on oil increases power of dictators in oil rich nations, shutting down democracy movements, and incidentally funds anti-American terrorism. Third, global warming is impacting more than just polar bears, it is affecting weather patterns accentuating both droughts and flooding in different areas. Forth, the loss of biodiversity is accelerating, and can only be stopped locally, taking into account local economic impacts. Fifth, in today’s global economy, an area cannot climb out of poverty without access to reliable electricity.

After Friedman discusses the seriousness of our current state, he starts making suggestions about solutions. Off the top he spends a chapter saying that the solutions won’t be easy. Then he describes what he calls the Energy Internet – ideas about smart appliances optimizing energy use, and flexible utilities buying surplus user power. One of my favorite quotes (and a chapter title) is “The stone age didn’t end because we ran out of stones.” I take his point to be that we don’t have to wait to run out of coal and oil to move to renewable energy sources.

Renewable energy sources are the point of Friedman’s book – why we need them, how to get them. The two points that were most convincing to me were reducing the expansion of global warming, and de-funding petro-dictators. I thought his most telling argument on global warning was to look at it from both sides. If global warning is real, and we do nothing we can agree that the consequences could be disastrous. If global warming is a false alarm and we take action anyway, we could take leadership in a new industry, and de-fund sponsors of anti-American terrorism. That’s not really such a bad consequence.

I have a couple of complaints. He referred to the formula “RE < C – renewable energy cheaper than coal”, and said it was too simple a goal. He offered a new formula “REEFIGDCPEERPC < TTCOBCOG – a renewable energy ecosystem for innovating, generating, and deploying clean power, energy efficiency, resource productivity, and conservation < the true cost of burning coal, oil, and gas.” He said he offered the new formula “tongue in cheek”, but then he kept using it throughout the rest of the book.

Friedman also is a big believer in heavy gas taxes to drive changes in our behavior. I already don’t like what it costs to fill my tanks. I could compromise on price floors that he also suggested. The idea is that with a guarantee that prices won’t drop back down like they did in the 1980s, investors and inventors can better predict a market for renewable energy technologies. Of course that’s an easy compromise for me. Considering the global economy described in The World Is Flat, it’s hard to imagine oil prices going back down.

Obviously I can’t make all of Friedman’s points in a relatively short review. Suffice it to say that with Hot, Flat, and Crowded he came a long ways toward converting a skeptic. I can see his point that we are on the cusp of a major market in new technologies. America can lead or fail. Failing does not look attractive from an economic perspective, even if we did not have an ecological perspective.

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