Monday, July 7, 2008

Simple solution to global energy crisis

Recently international crude oil prices surged past the 140$ per barrel mark. Although this possibly could have been caused due to artificial shortages due to market manipulation by producer countries, it is a small sample of what is to be expected in the future. To top this, startling evidences for the disastrous effects of global warming are being discovered at disturbing frequencies these days. Energy crisis and Global Warming are two aspects of the same problem and a simple solution to both is moderation. But why is this not happening?

Environmentalists across the world have been trying their best to convince political leaders to take active steps to reduce energy consumption and to reduce emissions. They have at best convinced governments to set emission standards and enforce some kind of regulation in the industry segment. But they have not been able to make any real impact in terms of reducing the energy consumption pattern of the general public. Why is this so?

Industries in the developed world are trying to commission researches that 'prove' that global warming is not a direct consequences of increased emissions. Industries in the developing world are clamoring that their counterparts in the developed countries had their share of polluting the world and they would like to have their fair share too. Why are they both blind to the fact that delicate balance maintained by mother nature is at risk of collapse any minute?

In a country like India where mass transportation depends mostly on Electricity or Diesel, you can easily discourage the consumption of oil and promote mass transport systems by a) Allowing the price of petrol to follow international prices and at the same time subsidize the diesel prices, and by b) Adding a very heavy tax on diesel non-commercial vehicles. Keeping the price of diesel low will ensure that general industry and goods transportation is not affected by the increasing fuel prices.

Again when you look at the impact of a price rise in diesel on the price of commodities and services it might not be that bad. The percentage of the cost of products and services originating from a cost in transportation, of which only one part is fuel costs, might not be that high to really cause a very significant price rise even if the fuel costs double.

When I first went to the US in 2001, I remember that petrol prices were around $1/gallon. Currently it is hovering around $4/gallon mark. In the US the prices of petrol and diesel are controlled by international prices. By allowing these prices to increase with international prices the affordability of alternate energy vehicles have been increasing. Hybrid Vehicles sales in the US have gone up by around 30% when normal car sales went down by 3%. Although hybrids account for only 2% of the number of cars in the US the trend is evident.

So what is the simple solution to the crisis, short term and long term. In the long run the only real solution is to find sustainable alternate energy sources and ways to consume energy from these sustainable energy sources. Say for example nuclear energy. Even if we have nuclear plants that generate all the energy that we need now we still can't use this energy in our transportation sector where the dependence is still primarily oil. So in addition to these alternate energy sources we need to change the ways we consume energy.

What can we as individuals do to move towards achieving this long term goal? We should try to promote and support decision making that will help us move towards this goal. We should try to promote research and industries that are trying to achieve this long term goal. We should reject and fight decision makers and industries that are trying to take us away from this mission.

What is the short term strategy to the energy crisis? Simple, just reduce our energy footprint? How can you do that, save energy, consume less energy, avoid wastage of energy. There is yet another way which people fail to recognize. It is moderation in consumption of everything that we use in our daily life. I had discussed some time back about the composition of cost of things. Energy is a part of the cost of everything that we consume. Everything means everything including the products and services that we consume. As we moderate our use and avoid the wastage of anything and everything we save energy, we reduce our energy footprint.

This is not a trivial solution. If you decide to take public transportation once every week or if you decide to turn on one light less (of an average of 5 lights in your house) your energy consumption in these areas would go down by approx 20%. There are tonnes of other ways you can reduce your footprint. I will have to dedicate another post to write on ways you can do this, but I hope you get the general idea.

As far as indirect reduction of energy consumption, via moderation in consumption of material products is concerned, the key points are Repair, Reuse, Recycle. This could be anything from the humble pen you reuse to the bottle you recycle to the majestic car you repair. The underlying philosophy is to reuse everything until it is broken and if it is broken you repair and then reuse it until it is unrepairable and then you recycle it. Translations in energy savings would depend on the energy component in the product.

A reduction in 20% per capita consumption of energy would directly translate to a comparably large reduction in global demand of energy which would further translate to a lower pressure on the environment and a sustainable future until we hit upon our fully usable, reliable, and sustainable alternate energy sources. Till then let our motto be conservation and moderation in everything we consume including - energy, products or services.

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