First, the estimable Elizabeth Kolbert (she of Field Notes from a Catastrophe) brings us a profile of Amory Lovins, founder of the Rocky Mountain Institute. As far as I can tell, this piece is not available online, but if you can lay hands on the 22 January 2007 issue of The New Yorker, do give the article a read. Here are some key snippets, along with my commentary.
“You know, there’s this old joke about the economist who’s taking his mannerly granddaughter for a walk,” [Lovins] told me. “She says, ‘Oh, Grandpa, I see a twenty-dollar bill lying in the street. May I go pick it up, please?’ He says, ‘Don’t worry, my dear. If it were real, somebody would have picked it up already.’ ” Lovins likes to say that he takes economics “seriously, not literally.” In his view, the streets are littered with twenty-dollar bills.
What Lovins is saying may seem hard to believe — especially when he extrapolates it to the entire society and claims that the U.S. could wean itself off of oil entirely by 2050, while saving money yet without giving up Americans’ luxurious standard of living. But what he’s saying does match my experience of working in the business world. Yes, people want to make money. Yes, in theory people work to maximize their economic well-being, especially in the context of running profit-seeking enterprises. But in practice, it’s faaaaar from perfect. Why do you think the big consultancies (IBM, Accenture, McKinsey, Bain, et al.) make so much money? Because plenty of businesspeople know that, much of the time, they’re not maximizing their returns.
The problem isn’t that businesspeople are dumb, but that, as humans, we’re all married to certain conceptions of the status quo. We have assumptions we swim in with as little thought as a fish swims in water, and it’s not until they’re challenged in some way, or queered by external events, that we come to question them. Climate change — or at least the reasonable assumption of the threat of it — may finally be doing this for a broad audience. But in general, I’ve found it’s safe to assume that large human organizations will exhibit gross failure to maximize for at least some goods, especially when these goods (e.g. atmospheric carbon stability) previously have not be highly valued.
[Lovins argues:] People weren’t interested in energy for its own sake but, rather, for the benefits — hot showers, cold drinks, dry clothes — that it conferred. If Americans could get the same benefits using less energy, then they would, in effect, have found a new energy source. [. . .]
Lovins likes to call the United States the “Saudi Arabia of nega-barrels.”
The latter point is a ripe one. The U.S. and Canada use far more energy per capita that many other highly industrialized nations, yet overall the standard of living in, say, Belgium would be quite comfortable for most Americans. (The beer’s good, too!) But most Americans don’t want to hear about energy efficiency, because as soon as it’s brought up, they think of hardship and deprivation and shortage. Yet in many cases it doesn’t have to be that way at all, as the handy example of compact fluorescent bulbs makes clear. The challenge for those of us who already see this is to convey the potential benefits without wrongly giving the impression that they must all be accompanied by hardship. (Some folks, e.g. the more dire predictors of a Peak Oil societal meltdown, would say we do have to prepare for hardship. Maybe — but I’m talking about what’s emotionally workable right now for the great mass of the population.)
It’s not that people are stupid, exactly. It’s that their intelligence is limited. When they make decisions, they tend to worry only about their own self-interest, which they see in such narrow terms that they miss the larger opportunities all around.
Human selfishness is pervasive across societies, but it has been so easy to exercise in this particular vein because energy has been cheap for so long. As soon as energy prices spike, a lot more people — including many who would never think to call themselves conservationists — start seeing the wisdom of fuel-efficient cars and the like.
Lovins tends to be a polarizing figure, but his approach to solutions has certainly yielded lots of positive results. For another take on Kolbert’s article, see this Gristmill post.
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A follow-up to my earlier posts on Ryszard Kapuscinski: The New Yorker just posted Kapuscinski’s account of his first trip abroad.