~e; Fwd: NORBERT WALTER: U.S. industry can't ignore anenergy-conscious world

[bc <human@electronetwork.org>]

  [sending to both the ~e and PEN lists, as the following is a
  many issued essay which nicely blends the relationship between
  energy and economics, and the win-win aspects of dealing with
  world reality instead of ignoring it like it will go away if wished
  enough. the announcement by GM was huge in many books, and on
  the stock market, it was reported (by an .il online news org) that
  a related company dealing with fuel cell batteries or something
  such (name: electric fuel) got a wheelbarrow of marketeering
  supportors after the announcement. now, if like the author is
  stating, that business and industry can make the logical and also
  strategic choices (like: Stay in Business or lose your shirt for
  believing your own bullshit), then maybe there is a glimmer
  in that people still exist in these huge organizations, humans,
  who have to decide what is right, and make decisions for which
  they are accountable, short, medium, and long-term. and if they
  fail, both for themselves (lose job/career) or the citizens of
  the time (lose choices of a better way to the future), then it
  may be these same people who can do something no one but
  them can do. and speak the hell up. loud and clear. time to
  make the changes needed and necessary and long overdue.
  and time to innovate beyond the stale imagination of the past.
  time to reclaim the the present and future and make it better.
  people. people who run businesses. and the workers and the
  receipients of their labors. the whole ecosytem: economic,
  social, and political. time may be changing, so when will we?]

NORBERT WALTER: U.S. industry can't ignore an energy-conscious
world

Christian Science Monitor

FRANKFURT, Germany (January 10, 2002 09:48 p.m. EST) - It's
no secret that the United States is the world's biggest consumer
of energy. The United States alone produces one-quarter of
total global CO2 emissions. This is only slightly less than
the combined total from Western Europe, Japan, Latin America
and Africa. Average Americans are responsible for creating
more than twice as much CO2 as their West European counterparts.
Internationally, the United States is also a leader in per
capita consumption of electricity and water.

One reason for America's high consumption of resources is
its comparatively low energy prices. The price of gasoline
in some West European countries (the United Kingdom, for
instance) is more than three times as high as in the United
States, because of taxes.

Another reason is that many American consumers still don't
have an environmental mindset (partly, of course, because
energy and resources are so cheap). Nonstop air conditioning
and gigantic refrigerators are just two cases in point.

At heart, politics is primarily responsible for the United
States' pronounced appetite for energy. In the past, American
politicians have provided few incentives to conserve energy
or to use natural resources more efficiently. Cheap energy
has traditionally been an objective of U.S. policy, and the
environment has taken a back seat. On the international stage,
the U.S. withdrawal from the Kyoto protocol demonstrates
environmental policy's marginal role in America.

Nevertheless, Americans are likely to pay more attention
to environmental issues in the medium term. The main reason
is that U.S. industry will be compelled sooner or later to
use energy more efficiently in both production processes
and products; this holds especially for sectors that produce
internationally traded goods.

In the automobile industry, the need to rethink is increasingly
apparent. In 2000, only 10 percent of U.S.-produced vehicles
were exported - with far more than half the exports going
to Canada. Other countries export much more. Japan exported
nearly 45 percent of the cars it manufactured in 2000; the
figure for Germany approaches 70 percent.

There are many reasons for this discrepancy, such as design
and sales strategy. But it is surely impossible to ignore
the fact that the gas-guzzling sport-utility vehicles and
flashy cars produced by U.S. makers are difficult to sell
abroad because of their enormous fuel consumption and the
much-higher prices at the pump outside the United States.
This becomes a particular problem for U.S. carmakers when
the domestic market declines, as it did in 2001, because
it's not possible to offset weak domestic sales with higher
exports.

Recently, though, it has become apparent in the United States
that fuel consumption matters to drivers as soon as the price
of a fill-up crosses a certain pain threshold. From roughly
early 2000 until late summer 2001, the price of gasoline
in the United States was - by American standards - very high.
And in both of those years, German and Asian automakers chalked
up much better results in the United States than did the
domestic producers, even though the "Big Three" had launched
sales drives with hefty financial incentives.

Disregarding other factors (such as exchange-rate effects
and quality differences), the non-U.S. producers' success
is no doubt partly attributable to their lower average fuel
consumption.

Sooner or later, the trend emerging in the auto industry
is likely to become a reality in other sectors such as electrical
engineering, mechanical engineering and chemicals. The ability
to save energy and manufacture energy-efficient, low-emission,
low-noise, recyclable products is a growing factor in an
international competition that America is far from winning.

Anyone who fails to change tack in the long run will face
difficulties going head to head with foreign competitors.
U.S. manufacturers are becoming aware of this. They are (gradually)
seeing that their products sell better abroad if they take
into account the higher energy costs there and that this
also makes them more competitive in the home market.

U.S. manufacturers realize that investments to reduce energy
consumption pay off relatively quickly, especially since
energy prices are scarcely likely to decline in the medium
to long term. For that reason, some American companies are
already much more farsighted on environmental protection
and energy policy than are the politicians and some old-fashioned
vested interests in industry.

So isn't it about time Washington also changed policies to
encourage greater energy savings and took up the challenge
to become an international leader on environmental issues?

Norbert Walter is chief economist of Deutsche Bank Group.
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