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Special Report

Fortnightly Magazine - July 15 1998

of $100/ton, meaning a $40 to $60 billion-a-year industry.

Sandor made his own prediction: "I think it's $10 or $20 a ton." He said his firm has a "mandate" to securitize 1.1 million acres of Costa Rican rainforest and will sell it at $12 a ton. "If you've got a bid, we'd be delighted to hit it." At $20/ton, the impact on gasoline at the retail level would be 3 cents a gallon, he said.

Sandor chided the audience, reminding them compliance begins in 2010, 12 years from now. "Twelve years ago, a little company in the Northwest by the name of Microsoft went public," he said. "It's up 20,000 percent since its IPO, OK? ...Things do change."

Coy, of Business Week, put his finger on the dichotomy of a world environmental economy. "If technology is a bad dream for environmentalists, wealth is a nightmare," he said. "The environmental writer Bill McKibben says that over a lifetime, an average American will use 500 times as much energy as someone from the African nation of Mali.

"And now as free markets increase wealth, the Chinese are trading in their bicycles for cars. Indians are buying refrigerators. Who can blame them? We did it ourselves."

The worst enemy of energy efficiency, he noted, is democracy. But technology still could bring a happy ending. "If you improve efficiency rapidly enough, you'll still come out ahead. People won't leave the lights on twice as long just because they're half the wattage."

He said there's room for improved fuel cells and other technologies. Free markets can be good for energy efficiency, unlike demand-side management, which he called an "expensive bribe designed by bureaucrats."

Asked whether people really care about energy efficiency, Coy replied: "The psychology of people's purchasing behaviors is just so amazingly complex.

"People...will buy a sport utility vehicle that gets rotten gas mileage...then yell at their kids for leaving a light on."

Joseph F. Schuler Jr. is senior associate editor of Public Utilities Fortnightly.

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