How to Fuel the Country While Saving the World

As you prepare your energy policy for the next four years, your advisers are probably offering you a depressing multiple-choice question that boils down to: "Since there are no alternatives to coal, oil or nuclear power, would you prefer to die of (a) global warming, (b) oil wars or (c) a nuclear holocaust?"

Fortunately, there's another option: "(d) none of the above." Your advisers are wrong; there is an alternative. No one needs to die of America's energy choices after all. Moreover, the alternative is profitable, so society can implement it in mindful markets without government's having to force anybody. And it offers a realistic, nonpartisan path to a richer, fairer, cooler and safer world. To see how to get there, let's start with a riddle.

Q: How is climate change like the Hubble Space Telescope?

A: They were both messed up by a "sign error"—namely, a mix-up between a plus sign (+) and a minus (–). The telescope's mirror was ground in the wrong shape because a technician confused the signs. Similarly, the climate debate has for too long focused on who must pay how much (+) so we don't end up toast. But done right, protecting the climate and securing the country's energy supply are not costly at all. In fact, they're profitable, since saving fuel costs less (–) than buying it.

As politicians debate the supposed "costs" of efficiency, smart companies have already discovered the reality. For many years, chipmakers IBM and STMicroelectronics have increased profits while cutting carbon emissions 6 percent a year. Du Pont emitted 80 percent less greenhouse gas in 2006 than in 1990, and at a $3 billion profit. Dow has booked a total of $3.3 billion by filling 22 percent of its energy needs with efficiency improvements. McKinsey & Co. now argues that the world could profitably abate 46 percent of global greenhouse-gas emissions by 2050 for virtually nothing, with nearly all costs offset by the huge savings they'd earn from improved efficiency. If you can explain this truth to Washington and the country, political resistance to climate protection will melt faster than any glacier.

You should remind citizens that we're already headed in the right direction. In 2006, the United States used 48 percent less energy, 54 percent less oil and 64 percent less direct natural gas (i.e., that burned by customers, not power plants) per dollar of GDP than it did in 1975—even though light-vehicle efficiency has been stagnant for two decades and almost all states reward utilities for selling more energy, not cutting customers' bills. Indeed, the United States saved more energy in 2005 than the European Union used. Imagine what more this country could do if it actually paid attention.