H. L. Mencken said, “For every human problem, there is a neat, simple solution; and it is always wrong.” When it comes to solving the problems of peak oil and global warming, I also think that the loudest barking is up the wrong tree. We look for the quick fix, trying to find a substitute energy source that allows us to change the way we do things little as possible, when the real problem is actually what we’re doing, not how we’re doing it. We need holistic solutions, not quick fixes.
Too abstract? Here are some concrete examples:
Problem: Peak Oil
Quick fixes: Ethanol and slight increases in vehicle efficiency standards.
Holistic solutions: Change our driving culture and infrastructure, by changing the way car use is priced from fixed charges to a per mile basis (“Pay as you drive”). Removing subsidies to use cars when other forms of transport are available, and redesigning our cities to make them easier to get around on foot, bike, and public transport. Like other holistic solution, all these steps increase safety and reduce congestion, reduce obesity and associated health problems, as well as reducing the use of gasoline.
Problem: Wind and Solar are intermittent resources, but coal produces too much CO2 and natural gas prices are rising rapidly.
Quick Fixes: Nuclear power and “Clean” Coal.
Holistic Solutions: Shift our demand for electricity to times when it is available, by using time of use pricing, energy storage and demand alignment, and distributed energy storage such as plug in hybrid vehicles.
Investing opportunities:On thing that’s striking about these examples is it’s much easier to find investment opportunities in the quick fixes than in the holitistic solutions. To invest in ethanol, you can just buy ADM or one of the multitude of ethanol stocks that have been going public recently, but I have yet to come up with a satisfactory way to invest in better urban planning (except buy a house in a walkable community, which is something I’m planning on doing this summer. Stapleton is the community. I currently live there, but I’ve been renting and waiting for the end of the housing bubble. I actually don’t think that housing is going to go up again any time soon, but I’m tired of waiting.)
The investment landscape is a little better when it comes to energy management. Itron and Siemens both have divisions that help utilities manage their grids better, and there are many battery and other energy storage companies to choose from. Still, it’s a lot harder to pick through battery companies than to just buy a nuclear powered utility or uranium miner.
Holistic solutions, by their nature, have weak boundaries… the benefits tend to be diffuse, and spread over society as a whole, so it is difficult to charge fairly for them. This, I think, is why there are so few companies pursuing them when they can pursue a quick fix that they can charge for up front.
Companies have an obligation to their shareholders to make money. It’s our job, as human beings, to work towards regulations that make it easier for companies to make money with holistic solutions that actually solve the problem than it is to make money with quick fixes that just cover the problem up.