Monday, May 09, 2005

The intersection of enlightened self-interest and cleaner air

From the invasion of Iraq to the attempts to open up the Arctic to speculative drilling, you'd be forgiven for thinking that oil runs our economy and that nothing can be done about it. While it's true that oil runs our economy, the picture isn't entirely bleak. Take this article in US News & World Report on the rise of environmentally-conscious hybrid cars.

Hybrids get close to 50 miles on a gallon of gas, more than twice what many SUVs get. With gas averaging over $2.20 a gallon nationally, that increased efficiency is starting to get people's attention.

They are expensive; a Honda Accord hybrid lists for over $30,000. But as demand increases and technology is improved, prices will drop. And as gas prices continue to increase, more people are willing to spend money up front to save in the long term.

I think this is the way things are supposed to work. There was a problem: high gas prices (or at least high gas prices in comparison to what Americans have been used to). The real solution isn't President Bush snapping his fingers and offering some half-baked decree, as some would want. The real solution isn't to ruin the Arctic for yet another short-term band aid. The solution is increased energy efficiency.

Sure, the president found that as an excellent smokescreen during the 2002 State of the Union address. He spoke of spending lots of money on hydrogen fuel cells. This was a transparent pre-emptive strike against liberal critics who were waiting to pounce on the other half of that speech: justifying (snicker) the then-imminent Iraq conquest. It was a good idea but have you heard anything about fuel cell research since that speech? Has the president uttered a single word about it since?

But ultimately, the market provided its own solution. I've written a lot about enlightened self-interest. In dealing with the problem of perceived high gas prices, there is no place for punitive measures like gas rationing or mandating that all cars get 80 miles per gallon. Enlightened self-interest works better.

Some people wanted cars like hybrids for reasons of principle. However, demand for hybrids started increasing rapidly once the realities of perceived high gas prices caused people to re-examine their choices. Demand increased when principles and the wallet crossed paths.

The same enlightened self-interest has been shown on the part of auto manufacturers. There was a demand for more fuel efficient alternatives to the gas guzzlers. Those companies that were first to recognize and respond to that demand have been rewarded. There is very high brand recognition and loyalty for the Toyota Prius, the first major hybrid car.

More hybrids on the road will result in cleaner air, which benefits everyone. And as demand increases for non-traditional engine cars, there will be more incentive for automakers to invest in the next step: mass produced hydrogen fuel cell based vehicles.

Now all we need is increased investment in the various public transportation systems in this country so then we could have less congestion, less sprawl AND cleaner air.

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