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Sensational Speech by Hot Flat and Crowded author Tom Friedman thinks inside the box

Tom Friedman is an amazing speaker.  His speech at Stanford's GCEP yesterday filled the hall with clean energy researchers and innovators.  The speech is part of a tour for his new book, Hot, Flat and Crowded 2.0, a sequel to his 2008 version of the book. The insights he has gained in the last two years has led him to agree with many sustainability gurus such as Dana Meadows and Amory Lovins.  In fact, he ends his compelling hour long speech with an a excerpt from his book, a speech by Amory Lovins at the memorial service for Dana Meadow. While Friedman's conclusions may be nothing new, his delivery was impeccable and fresh, interspersed with new terminology and fun words in classic Friedman fashion.  While I agreed with most of his points, his statement on the energy innovation sector was short sighted.  First, let's highlight the agreement points.

In his speech, Friedman takes an American centric approach.  If the US goes, so goes the rest of the world.  US leads world culture, clearly demonstrated by wide adoption of the American Dream.  Population alone isn't the problem, it's the fraction of the population currently living or rising up to live American lifestyles that will destroy our planet.  These thoughts close echo Hunter and Amory Lovin's sentiments in Natural Capitalism.  Friedman goes on to say that the three factors leading to the downfall of the financial market (Bear Sterns) and our climate stability (polar bears), are the same three factors.  These factors are (a) underpricing risk,  (b) privatizing gains and (c) socializing losses.  Unfortunately, we are now the "generation of Noah," where we have to concern ourselves with saving the last two.  Loss in biodiversity at an unprecedented rate means that "doing it later" is no longer an option.

Using a photo of students in an airport parking lot in Guinea, Friedman then addresses the issue of the "energy poor." He asserts that the energy poor are most susceptible to climate change because they do not have resources to dig a new well, or invent a new cookstove that needs less fuel.  The energy poor are also keen to climb out of energy poverty.  Thus, the availability of clean, cheap energy would be the key to unlocking both climate change and social disparity.

Then, Friedman likened the clean energy age with the IT age.  He termed it ET - energy technology.  He was fast to point out that while the IT age presented users with unprecedented function, and therefore prices did not matter, the ET age is only triggered by the price signal.  And therein lies our disagreement.  First I contend that in the IT age, price DID matter.  True, new functions were presented.  But the functions solved existing communication point points, and delivered higher value at a lower price in a different way.  Secondly, I contend that while energy generation functions of ET is innovating over existing energy use infrastructure, and therefore subject to price signals, the wider set of ET innovations are not.  These include energy delivering, monitoring and consumption innovations.  In addition, innovations in energy generation and delivery have co-influencing price points.  Thus to simply state that the entire ET age is subject to by price signal triggers only, would be to think inside the box at a time when out of box thinking is most crucial.

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