Great Britain’s electric regulator takes performance-based regulation to a new, more complex level, weighing policy choices against attendant costs.
Money Talks, Thermal Plants Walk
Why it pays for utilities to be more efficient.
Some environmentalists labels themselves “skeptics,” or refer to themselves as “reluctant.”
Not Amory Lovins.
The consultant physicist doesn’t embrace the term “environmentalist,” choosing to emphasize his expertise in, and advocacy of, energy efficiency. He’s no moral crusader. As calls for action to address climate change have become more strident, Lovins has taken a more detached approach that emphasizes the one thing all corporations want to bolster—the bottom line.
“The whole climate debate has been spoiled by a sign error—mixing up a plus sign and a minus sign,” Lovins told Public Utilities Fortnightly .
“Most politicians express concern about the cost, burden, and sacrifice required to protect the climate, but practitioners know that climate protection is extremely profitable because it’s so much cheaper to save fuel than to buy fuel. The same is true for electricity.”
Working as chairman and chief scientist at the Rocky Mountain Institute, the research institute he cofounded in 1982, Lovins continues to sell his ideas to a more receptive industry, and he doesn’t hesitate to go after counter-arguments with which he disagrees. (Indeed, Lovins last appeared in our pages in the May 1, 2003, issue, in a hard-charging letter to the editor that took on a Fortnightly article that had appeared a month earlier.)
In our interview, Lovins took a more measured tone—the sound of someone confident that the industry has at last warmed to the ideas he’s been promoting for several years.
Fortnightly: Have you seen Al Gore’s movie, “An Inconvenient Truth”? How closely do Gore’s views on climate change hew to your own?
Lovins: He gets the science right. I wish the film had a chance to provide the profitable solutions to the problem he correctly describes. It doesn’t matter if you agree with him about the science or not. You should do the same things anyway to make money, because it’s cheaper to save fuel than to buy fuel.
If the two parallel universes of politicians and practitioners ever converge, I think the political resistance to protecting the climate will melt faster than the glaciers. We’ll suddenly realize that we’re going to make money on the deal. Many large companies already are making billions substituting efficiency for fuel. There’s no reason it should be different for the rest of us.
Fortnightly: What role do politicians have in either encouraging, or legislating, behavioral changes?
Lovins: I don’t propose legislating behavioral change, and I’m not sure I know anybody who does. It depends what you mean by “behavioral change.” Most people would interpret that to mean, “The government is going to tell me how to live—what I should drive, what kind of house I can live in, what activities I can undertake.” As far as I know, that’s not on anyone’s legislative agenda, and properly so.
What is mainly driving climate protection is the profit motive, competitive strategy, and technological innovation. Legislation is playing a slow catch-up game and is being very much overtaken by events