Tom Friedman on the current "oil crisis"
Thomas Friedman had a piece in the NYT on Sunday about how President Bush is "squandering" his presidency on Social Security when he could be making history by being stronger on oil policy and environmental issues like emissions. Friedman cites a WIRED mag article that states that right now there are 800 million cars in use, by 2050 there will be 3.25 billion due to India and China's growth (that was an amazing stat i thought, however I would like to know how they came up with that figure). According to Friedman we should be taking steps to solve the energy problem and cut emissions through a host of measures, however one stuck out in my mind. Friedman proposes we set a flat rate for gasoline at $4 (nearly double the national avg. price). According to Friedman this will limit emissions b/c there will be people less willing to drive due to the high price associated with it and will thus force oil suppliers to drop prices due to less demand. What do you guys think about the flat rate?
posted by david @ 12:39 AM
3 Comments:
My question is would you then lower gas prices after the oil companies lower thiers? I don't think this would work and it would hurt a lot of companies. For example, my dad owns a towing company, if gas prices soared to $4 no body would drive and thus his business would die because if no one is driving than no one needs a tow, also he would not be able to fuel his trucks because of the huge price increase. I think setting gas prices at a flat rate of a ridiculous amount like
$4 would hurt the economy. Too many businesses rely on gas prices to be semi low.
I agree with Austin's comment. The effects of raising the cost would have too many negative effects on the economy. I can't think of one industry that does not rely on gas in someway or another. This may reduce emissions, but it would also cause the loss of many jobs. I think that a better option would be to look at innovative ideas. Use engineers to find better emissions; continue to give subsidies for the purchase of hybrid autos or fuel efficient cars, perhaps an incentive program that would reward industries which find ways to conserve gas. I think there are many other options that would have the same result without devastating the economy. In fact, if the right incentives are set in place, it may even help spur the economy.
I agree with both of you on the repercussions of the flat rate on the trucking market as well as other transportation industries that rely on gas. In response to your comment about $4 being a rediculous price, this is relatively low in comparison to Britain's $6 premium price; still though I think the flat rate is a bad idea. By creating a price ceiling on the price of gas we have a problem with the quantity demanded being less than the quantity supplied. Therefore we will see those markets who rely on lower gas prices going out of business (gas stations, interstate transporters, etc.) due to the lack of demand. I think that Friedman's ends were noble but his means were off base and would actually do more harm than good. Were you able to access the column, b/c i dont know if it was switched to only subscribers, if it was here it is...
How will future historians explain it? How will they possibly explain why President George W. Bush decided to ignore the energy crisis staring us in the face and chose instead to spend all his electoral capital on a futile effort to undo the New Deal, by partially privatizing Social Security? We are, quite simply, witnessing one of the greatest examples of misplaced priorities in the history of the U.S. presidency.
"Ah, Friedman, but you overstate the case." No, I understate it. Look at the opportunities our country is missing - and the risks we are assuming - by having a president and vice president who refuse to lift a finger to put together a "geo-green" strategy that would marry geopolitics, energy policy and environmentalism.
By doing nothing to lower U.S. oil consumption, we are financing both sides in the war on terrorism and strengthening the worst governments in the world. That is, we are financing the U.S. military with our tax dollars and we are financing the jihadists - and the Saudi, Sudanese and Iranian mosques and charities that support them - through our gasoline purchases. The oil boom is also entrenching the autocrats in Russia and Venezuela, which is becoming Castro's Cuba with oil. By doing nothing to reduce U.S. oil consumption we are also setting up a global competition with China for energy resources, including right on our doorstep in Canada and Venezuela. Don't kid yourself: China's foreign policy today is very simple - holding on to Taiwan and looking for oil.
Finally, by doing nothing to reduce U.S. oil consumption we are only hastening the climate change crisis, and the Bush officials who scoff at the science around this should hang their heads in shame. And it is only going to get worse the longer we do nothing. Wired magazine did an excellent piece in its April issue about hybrid cars, which get 40 to 50 miles to the gallon with very low emissions. One paragraph jumped out at me: "Right now, there are about 800 million cars in active use. By 2050, as cars become ubiquitous in China and India, it'll be 3.25 billion. That increase represents ... an almost unimaginable threat to our environment. Quadruple the cars means quadruple the carbon dioxide emissions - unless cleaner, less gas-hungry vehicles become the norm."
All the elements of what I like to call a geo-green strategy are known:
We need a gasoline tax that would keep pump prices fixed at $4 a gallon, even if crude oil prices go down. At $4 a gallon (premium gasoline averages about $6 a gallon in Europe), we could change the car-buying habits of a large segment of the U.S. public, which would make it profitable for the car companies to convert more of their fleets to hybrid or ethanol engines, which over time could sharply reduce our oil consumption.
We need to start building nuclear power plants again. The new nuclear technology is safer and cleaner than ever. "The risks of climate change by continuing to rely on hydrocarbons are much greater than the risks of nuclear power," said Peter Schwartz, chairman of Global Business Network, a leading energy and strategy consulting firm. "Climate change is real and it poses a civilizational threat that [could] transform the carrying capacity of the entire planet."
And we need some kind of carbon tax that would move more industries from coal to wind, hydro and solar power, or other, cleaner fuels. The revenue from these taxes would go to pay down the deficit and the reduction in oil imports would help to strengthen the dollar and defuse competition for energy with China.
It's smart geopolitics. It's smart fiscal policy. It is smart climate policy. Most of all - it's smart politics! Even evangelicals are speaking out about our need to protect God's green earth. "The Republican Party is much greener than George Bush or Dick Cheney," remarked Mr. Schwartz. "There is now a near convergence of support on the environmental issue. Look at how popular [Arnold] Schwarzenegger, a green Republican, is becoming because of what he has done on the environment in California."
Imagine if George Bush declared that he was getting rid of his limousine for an armor-plated Ford Escape hybrid, adopting a geo-green strategy and building an alliance of neocons, evangelicals and greens to sustain it. His popularity at home - and abroad - would soar. The country is dying to be led on this. Instead, he prefers to squander his personal energy trying to take apart the New Deal and throwing red meat to right-to-life fanatics. What a waste of a presidency. How will future historians explain it?
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