Efficiency, efficiency, they say…
—John Cale, “Paris 1919”
Amory Lovins has always been a little ahead of the curve in his views on alternative energy and efficient design—25 years ahead of the curve, more or less. He recently spoke to the Economist about his enthusiasm for “market forces” and the approximate two-decade “slow burn” of his ideas—the period from pronouncement to widespread public acceptance.
IF ANYBODY should be on top of the world today, it is Amory Lovins. That is not just because the energy visionary makes his home on a mountain in Old Snowmass, Colorado. Rather, it is because today’s interrelated energy and climate difficulties have at last made the world see the importance of resource efficiency, energy innovation and holistic design—principles that he has been advocating for nearly four decades.
For much of that time, Mr Lovins, who heads the Rocky Mountain Institute (RMI), a natural-resources consultancy, has been a lonely voice in the wilderness. As far back as the early 1970s, he sounded his first alarm about the potential damage that climate change might bring, but he was ignored. In a paper in Foreign Affairs in 1976, at the height of the energy crises and neuroses of that decade, he argued that what the world needed most was not new energy supplies but more efficiency. He was ruthlessly attacked by the energy industry and the political establishment, and his proposal for an alternative “soft path” out of the energy crisis was dismissed. Energy and economic growth always grew in lockstep, went the conventional argument, and to think otherwise was dangerously naive.
But history has proved him right. Thanks to a combination of high prices and public policies aimed at encouraging efficiency and conservation, America’s energy use did decouple from economic output in the wake of the oil shocks of the 1970s. Crucially, this happened without impoverishing the country, proving his once-controversial thesis that growth and greenery can indeed go hand in hand. That experience, along with the recent global energy-price shock, has made it respectable for business and political leaders to talk about energy efficiency.
Mr Lovins should be pleased, but his satisfaction at having been proved right is tempered by lingering unease that there are echoes of the 1980s in today’s debate. The main problem with the approach to energy in the 1970s, he argues, was that the issue was defined as a supply shortage. “The question they asked was how to get more energy, at any price, instead of asking: ‘How should we use energy, why are we using it so wastefully, and what do people really use energy for?’” he says.
That question points to one of his main contributions to the energy debate. He insists that the goal of public policy should be to ensure adequate and affordable supplies not of energy per se but of “energy services”—as he loves to put it, the cold beer and hot showers made possible by energy. By redefining the problem that way, rather than merely subsidising more power plants or oil drilling, public policy can be made technology neutral, and consumer needs can be satisfied by demand-side measures if they prove cheaper than drilling or digging for new supply.
He is also growing concerned because he sees parallels, in today’s energy debate, with the failed supply-side arguments made three decades ago. Just as President George Bush has done recently, Ronald Reagan subsidised the search for costly domestic oil and gas on dubious national-security grounds. Mr Lovins argues that that policy was undermined by the “quiet gusher” of energy efficiency that came to market during that same period. The high energy prices of the 1970s gave way to an oil-price collapse in the mid-1980s that wiped out many of those investments in marginal oilfields—and bankrupted expensive forays into alternative energy. This happened, says Mr Lovins, because “efficiency is a fast resource, and it grabbed the pie first. By the time new supply came in, it was too late and it just ended up crashing the market.”