Global Warming: A Real Solution

What would happen if we created a truly free market, one in which alternative energy could compete on an equal footing with oil and coal? In 2004, physicist Amory Lovins answered that question. In a study co-funded by the Defense Department, Lovins and his colleagues at the Rocky Mountain Institute detailed how the United States can completely wean itself off all oil ? and create a much stronger economy ? by 2050.

The transition from oil outlined by Lovins would occur in two stages. First, half of our current demand for oil can be eliminated simply by using oil twice as efficiently. We've already done this once ? doubling our efficiency since 1975 ? and we can do it again simply by encouraging the adoption of existing technologies. Then, the remaining half of our oil demand can be replaced with a combination of natural gas and advanced biofuels. The result would not only end our oil addiction completely, it would also lower our energy costs to the equivalent of $15 a barrel ? a quarter of what we currently pay.

The study by Lovins shows how ? with a one-time investment of $180 billion ? we can completely retool the automobile and aviation industries, create greener and more energy-efficient buildings and foster a modern biofuels industry. Even assuming that the price of oil drops by more than half by 2025, Lovins shows that going oil-free would net Americans $70 billion a year ? an impressive return on our initial $180 billion investment! At the same time, we would not only reduce the threat posed by global warming, we would also generate a million new jobs ? three-quarters of them in rural and small-town America.

There is no shortage of technology and innovation waiting to be unlocked and put to use by the market. We already possess the high-performance plastics, ultralight steel and carbon-fiber composites needed to reduce the weight of cars and trucks ? a move that would cut fuel consumption in half while improving auto safety. This is not the Jetsons' stuff: Opel has already produced a prototype carbon-fiber roadster that does 155 miles an hour and gets as much as 94 miles per gallon. And within the next five years, Toyota and General Motors are expected to market "plug-in" hybrids that will enable drivers to travel at least 150 miles on a single charge. "It's a no-brainer for most drivers," says former CIA director James Woolsey, who views global warming and energy dependence as the number-one threat to America's national security. "And the only infrastructure you need is an extension cord in your garage."

A green revolution is also taking place in building construction. In Lower Manhattan, according to city officials, every new construction project valued at more than $25 million is being built on environment-friendly principles. More than 500 mayors of American cities have passed or pledged to pass green standards for new development, and developers who once fought such moves now recognize that they can quickly recover any added costs of green development through energy savings, higher rents and higher resale values. Indeed, the advantages of building green are now so widely recognized that the nation's top real estate manager, Steven Roth of Vornado, recently told an industry group, "If you build a new building that is not green, you're going to be in trouble."

Even more dramatic is the potential that already exists for unlocking more energy from natural gas. According to Lovins, we can save half the natural gas we currently use ? while cutting its cost to as little as one-tenth its current price ? simply through more efficient use. Two-thirds of the savings will come from conserving electricity during peak hours ? by relying on existing technology like the so-called "intelligent grid," which can dim lighting and turn off hot-water heaters in millions of homes and offices on hot summer days. The remaining third will come from switching to more energy-efficient devices, many of which are already on store shelves.

Even making a few modest changes in our homes could dramatically curb carbon pollution. Widespread use of new LEDs ? light-emitting diodes that are brighter, longer-lasting and ten times more efficient than conventional bulbs ? could eliminate up to ten percent of U.S. electricity demand. An even simpler innovation ? switching to cold-water laundry detergent ? would eliminate enough CO2 each year to meet eight percent of the U.S. target under the Kyoto treaty. Using existing off-the-shelf technologies, Lovins estimates, would cut natural-gas costs by $50 billion every year ? displacing demand for foreign oil without building a single new natural-gas terminal or coal-burning power plant.

Finally, a marketplace freed from oil subsidies would tap the energy wealth of biofuels already in use around the world. Brazil has eliminated two-fifths of its gasoline demand with ethanol produced from sugar cane, and American farmers have the capacity to produce 4 million barrels a day of cellulosic ethanol without touching an acre of farmland, simply by harvesting switchgrass that protects topsoil, wildlife habitat and water purity. According to Lovins, the combination of advanced biofuels, fuel- efficient cars and better use of natural gas could create more than enough energy to end America's oil imports from all OPEC countries by 2025. By 2050, when all the gas-guzzling cars and trucks currently on the roads will be reduced to scrap metal, we can completely eliminate oil as a fuel source.

Aggressive action by the federal government could speed up our transition from oil faster than even the most optimistic predictions outlined by Lovins. If, for example, we made national investments in hydrogen fuels, which are more than twice as efficient as hydrocarbons, America could actually export energy from the Great Plains ? the "Saudi Arabia of wind." The Dakotas alone have sufficient wind to make all the hydrogen necessary to run every car and truck on the road in America, at nearly triple the efficiency of gasoline. At the Napa Valley summit, business leaders watched a presentation by John Woolard of BrightSource Energy, which builds large-scale solar power plants. With a level playing field, he boasts, "we'll be able to power the entire United States on less than one percent of our total land."