My rating: 3 of 5 stars.
Some thoughts on Zoom: The Global Race to Fuel the Car of the Future.
This 2007 book is written by two correspondents for The Economist, and provides a US-centric view of the geopolitical and economic forces that link Big Oil and Big Auto, and of the potential for a hydrogen economy to resolve the environmental issues surrounding the burning of fossil fuels. The first six chapters provide a (rather disjointed) overview of the history of cars and oil companies, and the efforts that these industries have made to preserve their dominant positions. While interesting, the book really begins in Part III with a discussion of the growth of Asian economies and the impact that increasing car ownership will have on the environment and the oil supply. The following two chapters talk about clean fuels and smart cars, and of the need for political change in Washington to level the playing field and allow clean energy to develop.
For some time I have been thinking about the role that business will play in solving the energy / environmental issues that we face today. This book presents the first argument that I have read for something which I believe is key – that the price of fuel needs to reflect its true cost to society, including externalities such as security, health, and environmental harm. It is ludicrous that the price of petrol is so low in the USA, but the true cost needs to account for more than simply the huge subsidies provided to highly profitable oil majors. Think for example, how much the price would rise if the cost of the Iraq wars were included (I must point out that while the authors do talk about the cost of energy security, they don’t suggest that the Iraq wars were about the oil!)
Zoom proposes five points.
1. Americans need to pay honest prices for fossil fuels. The price of gasoline must reflect the true cost to society imposed by its environmental, geopolitical, and economic harm. This would level the playing field so that clean alternatives have a fighting chance.
2. The business of business is business. Don’t expect corporations to act out of goodwill, charity, or “corporate social responsibility” to tackle oil addiction. There is nothing immoral or surprising about oil companies selling oil or car companies selling SUVs.
3. Leave it to the market to pick the winners. History shows that it is disastrous to expect the government to back promising technologies. It’s best to leave this to the dynamism of markets and entrepreneurs.
4. Government must act. While bureaucrats should not push favoured technologies, there is a clear case for government intervention in energy and environmental policy due to the costly externalities involved in burning fossil fuels.
5. Individual action is the essential catalyst for change. The key to driving change in America’s political system is grassroots involvement.
I am inclined to agree with all of these points. I was hoping to learn more about a potential hydrogen economy, but nevertheless enjoyed this book and was very interested in the economic arguments presented here.