[Image credit: itMoves]

I wrote a couple of weeks ago about Bjørn Lomborg, an interesting author who gained notoriety back in 2007 by writing the book Cool it!, and who had impressed me with a few articles (like this one) where he called for a different, more rational approach to global warming. His two main arguments were, succinctly, that hysteria will only produce a backlash, and that every dollar spent in R&D and basic science will go many times further than most of the expensive and inefficient solutions we are using today. So far, so good.

Feeling guilty for not having read the book, I finally purchased it a week ago; what a disappointment...

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My friend and mentor Dan Sturges is one of the panelists. What do they talk about? :

In the last 1.0 hundred years mobility was largely about automobile ownership.  The conversation now moves to the role of vehicles in a more complex mobility mix.  How must automakers adapt?

This webcast was live at 9AM PST on December 9th.

I am not a big fan of subsidies, which tend to obscure market realities and generally benefit the incumbents (from agriculture to manufacturing) instead of leaner, more efficient newcomers.

Targeted, time-limited consumer tax credits are a different animal however. When well designed, they can be a decisive force helping new industries cross the chasm faster. The tax credit available for EVs is a good example.

Unfortunately, the other EV tax credit (the one that helps individuals and businesses purchasing charging infrastructure) was not that well designed, and because it comes from a different pot of money, it is set to expire by the end of this month. Ah, the irony, right when the first serious EVs in a generation are finally going to appear on the road, one of the main sweeteners for the consumer (especially if they are not too committed) is going to disappear.

There is still a chance that it can be extended, but for that to happen, action is needed. Please visit this Plug-in America link and sign the petition so it gets forwarded to your representatives in Congress (it only takes 30 seconds).

In another time this would have probably been extended without a glitch, but nowadays, with tea-lovers controlling one party and Compromiser In-Chief leading the other, I'm afraid anyy clean tech advance made during the past few years could be on the chopping block starting January.

Hey, they have to find the money somewhere to pay for the tax credit extension for the top two percent, right?

[Video source: Cool It the Movie official website]

I have read a few late opinion pieces by Bjørn Lomborg (the latest one, The Return to Reason, via Project Syndicate), one of the most controversial figures in the climate change debate, and to my surprise, I have to admit his arguments are quite persuasive.

When I heard about Mr Lomborg, it was always in the context of his 1998 book (The Skeptical Environmentalist), and thought of him as nothing more than one of those scientist (he is actually a political scientist) on Chevron's payroll, denying climate change and creating more false debate. I am as innately bias as anyone (we are all more receptive to ideas we agree on, aren't we?), so I didn't pay too much attention. Proving again that my 7th grade Civics teacher was right, reading what the other side has to say has proven to be an interesting experience.

It turns out Mr Lomborg is not a denier, since there is nothing to deny about climate change. Data is data. What Mr Lomborg maintains, and the reason why he is vilified by the environmental activists (establishment?), is that first there is no point scaring our kids silly as if they will not have a world left to inherit, and secondly, that before dumping billion of dollars into inefficient technologies, it would be wiser to spend the money in R&D and find out real solutions that are both effective and economically feasible, while at the same time look for short term adaptation to the real changes that are already happening, changes that are too late to stop, and that will mostly affect poor people around the globe.

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[PS image credit: itMoves]

With frustration mounting over the inability of the Obama administration to fulfill many of their pledges and promises (helped in no small part by an irresponsible party of NO), why hold back from our modest EV side? There is little to lose, now that it looks like we'll be facing an even more paralyzed Senate (can you believe it?) after the November elections.

As it is well known, one of the first and most promising decisions by the Obama administration was to set aside $25bn in loan guaranties to support the President’s goal to create green jobs in the automotive and component manufacturing industries. Although a small amount (compared to a $3.8 trillion budget, of which some $226bn were dedicated to DARPA), it was certainly a move in the right direction, at a time when the nascent industry needed it the most. It promised companies (and more importantly, their early investors) that there was light at the end of their R&D tunnel, where money would be available to take promising new ideas past the pre-production stage and into the real world. By the time Congress appropriated the budget in fall 2008, the global capital markets had frozen (remember Lehman?), and with private funding all of the sudden gone, these DOE loans looked like the only game in town.

Alas, in a wonderful demonstration of lobbying trouncing common sense, the biggest chunk went to Ford for retooling (obviously as a consolation prize after GM got $50bn, or maybe just to shut them up), with the second biggest going to Nissan (really? does a company with $90bn in revenue need $1.6bn from the DOE?). Tesla also got their loan, not without some drama (including a sneaky price rise of $6k that angered many of their early customers) before they miraculously announced their one and only profitable month. By the time Fisker got their piece of the pie, back in September '09, something funny was happening (as Darryl Siry smartly exposed on Wired last December): investors were no longer interested in companies which have not been anointed by the Federal Government.

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[Image source (original): IUPAC]

Right on the heels of a recent post where I compared China with Golman Sacks, news came this past week that confirm how China sees the environment as a strategic race.

Rare earth elements are the ones at the bottom of the periodic table that seldom get mentioned in high school chemistry classes. As it happens, they are crucial for a myriad of modern technologies, from flat screen TVs and hard drives, to oil refining, NiMH batteries, and high efficiency electric motors (for both wind turbines and EVs).

Their extraction and processing is an environmental nightmare, which is the reason China gave when justifying its decision to cut exports by 72% by the end of the year. This would not be much of an issue except for the fact that China produces 97% of the worlds' rare earth oxides. Although the elements in question are relatively common, it will take at least five years to get any production facility elsewhere up to speed. Predictably, the immediate consequence has been a huge spike in their prices.

It looks like there are other strategic considerations (besides the environment) behind China's move: to force world producers of finished products (batteries, TVs, turbines, even missiles) to move their facilities to China (the production cut only affects exports), or risk sure shortages of these key materials.

This kind of hoarding sure looks like a breach of World Trade Organization rules, and in fact Japan is already planning to file a complaint. Market forces will also work against China in the long run, as other countries have already expressed interest in opening up old mines (the elements are rare because they are hard to separate, but they are relatively common and easy to find). The US Congress is also seriously looking into it, as you can read in this report (pdf here) by the Congressional Research Service from last July 28 (a recommended read for a complete overview of the problem). Since many military applications are also affected, it is likely that the US government will pressure hard on the issue.

In any case, it is another interesting battle to watch, between free markets and international trade, and the strategic will of the Party. In the mean time, China continues to position itself to profit both when CO2 goes up, and when it will eventually go down. Very smart, don't you think?

(Further read at Reuters and Telegraph).

PS.- As an interesting aside, Li-ion batteries do not use any rare earth elements. If NiMH production, the battery of choice for hybrids, gets disrupted, we might see a faster transition from hybrid vehicles to pure EVs (although magnets inside their electric motors will still need rare neodymium).

[Data source: Pew Research Center July 31 poll - pdf here]

My son is a little over two years old. When confronted with choosing which one of his two favorites toys he will take to daycare, his answer is obvious: he takes them both.

Americans recently spoke to the Pew Research Center for the People & the Press about energy (report here, middle of the page), and when asked to decide which goal is more important (energy independence, low prices, job creation or the environment) their choice was clear: all of the above.

To be fair to Republicans, at least the majority of them (54%) do not see one of the issues as a priority; unfortunately, it is environmental protection (!). Democrats and independents, on the other hand, simply want it all.

If you follow the clean energy sector at all, you would probably know that wanting it all is just not a real option, so my first reaction was to blame the respondents for their irrationality. But as I thought about it over the week, it appeared to me that the questions rather than the answers were the real problem. I explain. When asked about moral issues (whether it is gay marriage or enhanced interrogation techniques), we often follow our convictions, and our answers tend to be precise: we either agree or we disagree. Decisions are emotional, and rational discussions almost impossible to maintain as tradeoffs are also moral in nature and hard to quantify.

Economic questions on the other hand (and energy questions are always economic in nature) are different, because tradeoffs are quantifiable. We can tell with relative precision how much certain decisions are going to cost. We can also count with the one economic rule that rarely fails: there is no such a thing as a free lunch.

Under this light, it seems useless to frame questions about energy in a vacuum. By asking people to rate four or five very important goals, the researchers were setting themselves up to get all of the above answers. In the absence of tradeoffs, we all want free, clean energy that doesn't help despots abroad, laws of physics be damned. When we define them however, we can begging to see the complexity of the environmental and energy problems we face today:

- would you want cheap domestic energy if that means wiping out flat the Appalachian mountains, and turning Los Angeles and many other cities into grey smog basins, Beijing style? Will you pay for society's extra medical costs? (via GreentechSolar)

- would you be willing to pay an extra x percentage on your electricity bill and two extra dollars per gallon of gas so your kids inherit a country and a planet not worse off than today's?

None or these are easy questions, and there are many many more, but they already provide a basic sense of the trade offs involved as we move forward. Barring a dramatic technological breakthrough, local, clean and cheap energy (arguably the Holy Grail of this century) is just not attainable today, and the sooner the people know about it, the better and more informed the policy and market decisions (with their tradeoffs) will be.

Of course it was just a coincidence, but don't forget that last week:

- According to the International Energy Agency, China passed the US as the biggest consumer of energy in the world (about five years ahead of schedule).
- GM sold more vehicles in China than in the US for the first time ever.
- The Obama administration pretty much gave up passing a meaningful energy bill this year.

Way to go, people, way to go...