Sharing: Thomas Friedman
Posted on October 5, 2008
The city of Tianjin, China, is home to many of China’s big automakers, and in September 2007, I was invited to speak at the China Green Car Congress there. Yes, China, which has been steadily improving its own auto mileage and pollution standards now holds a conference to talk about the latest in green-car technologies. Who knew? The venue was the Marriott in Tianjin and the audience was mostly Chinese auto industry executives—some pretty tough-looking car guys—who listened to my remarks, via translation on headphones. I thought hard and long beforehand about what to say to this group that might stimulate their thinking and give them a perspective they hadn’t heard before. In the end, I decided to go for the jugular. The basic thrust of my talk is as follows:
“Every year I come to China and young Chinese tell me, ‘Mr. Friedman, you Americans got to grow dirty for 150 years, you got to have your Industrial Revolution based on coal and oil, now it is our turn.’ Well, on behalf of all Americans, I am here today to tell you that you’re right. It’s your turn. Please, take your time, grow as dirty as you like for as long as you like. Take your time! Please! Because I think my country needs only five years to invent all the clean power and energy efficiency tools that you, China, will need to avoid choking on pollution and then we are going to come over and sell them all to you. We will get at least a five-year jump on you in the next great global industry: clean power and energy efficiency. We will totally dominate you in those industries. So please, don’t rush, grow as dirty as you like for as long as you want. If you want to do it for five more years, that’s great. If you want to give us a ten-year lead on the next great global industry, that would be even better. Please, take your time.”
At first, I could see a lot of these grizzled Chinese car guys adjusting their earpieces to make sure that they were hearing me right: “What the hell did he just say? America is going to clean our clock in the next great global industry? What industry is that?” But as I went on, I could also see some heads nodding and some wry smiles of recognition from those who got my point: Clean power is going to be the global standard over the next decade, and clean power tools are going to be the next great global industry, and the countries who make more of them, and sell more of them, will have a competitive advantage. Those countries will have both the cleanest air and the fastest-growing business—not a bad combination.
That is the point I was trying to drive home in Tianjin, by making it into a competitive issue: The longer China focuses on getting its share from a world that no longer exists—a world in which people could use dirty fuels with impunity—and the longer it postpones imposing the policies, prices, and regulations on itself that will stimulate a clean power industry at scale, the happier I am as an American.
America wins! America Wins! America wins! If only…
If only our country understood this moment and was doing everything it could to put in place the winning formula—a renewable energy ecosystem for innovating, generating and deploying clean power, energy efficiency, resource productivity and conservation. Then we really would be able to clean China’s clock. But we don’t understand this moment and we’re not doing all we can, which is why China could still end up cleaning ours.
That is why the green revolution is first and foremost an innovation challenge—not a regulation challenge. “Ultimately, this problem is going to have to be solved by the engineers,” said Craig Mundie, Microsoft’s chief research and strategy officer. But how could it be that, with all the green talk and all the green hype, we have not made such an exponential innovation/engineering breakthrough yet?
The answer is twofold. First, real energy innovation is hard. We are bumping up against the current limits of physics, chemistry, thermodynamics, nanotechnology, and biology, and we need to push out the frontiers in each of these disciplines. But second, and more important, we haven’t really tried. That’s right, we haven’t really tried.
We have not put in place the basic requirement for trying: a coordinated set of policies, tax incentives and disincentives, and regulations that would stimulate the marketplace to produce an energy Internet, to move the clean power technologies we already have—like wind and solar—down the learning curve much faster, and to spur the massive, no-holds-barred-everybody-in-their-garage-or-laboratory innovation we need for new sources of clean electrons.
I cannot stress this point enough. If you take only one thing away from this book, please take this: We are not going to regulate our way out of the problems of this new Energy-Climate era. We can only innovate our way out, and the only way to do that is to mobilize the most effective and prolific system for transformational innovation and commercialization of new products ever created on the face of the earth—the U.S. marketplace. There is only one thing bigger than Mother Nature and that is Father Profit, and we have not even begun to enlist him in this struggle.
The only thing that can stimulate this much innovation in new technologies, and the radical improvement of existing ones is the free market. Only the market can generate and allocate enough capital fast enough and efficiently enough to get 10,000 inventors working in 10,000 companies and 10,000 garages and 10,000 laboratories to drive transformational breakthroughs; only the market can then commercialize the best of them and improve on the existing ones at the scope, speed and scale we need.
But markets are not just open fields to which you simply add water and then sit back in a lawn chair, watch whatever randomly sprouts, and assume that the best outcome will always result. No, markets are like gardens. You have to intelligently design and fertilize them so they yield the good, healthy crops necessary for you to thrive.
Up to now, we have not designed our garden to get the maximum amount of innovation in clean power—not at all. To the extent that we have designed it, we have designed it to produce energy from cheap, dirty fuels, primarily from oil, coal and natural gas. And when we sat back and let all those in Congress and the private sector, who benefitted from the use of those fuels, water and fertilize this garden like crazy with government supports while paying scant attention to anything else.
Now our energy garden is overrun with a tangle of coal, oil and natural gas pipelines, refineries and gas stations, and it is very hard for anything new to grow without getting choked. Have no doubt: Our garden has been designed by the oil, coal and natural gas interests to suit their needs—to keep these fuels cheap and abundant and difficult to supplant. And the global garden has been designed by the OPEC oil cartel and the petro-dictators to suit their interests too. There is no “free market” in energy, where everyone is competing on a level playing field. That is a complete fantasy. You are not going to get energy innovation at scale when a barrel of oil is cheaper than barrel of water or a barrel of milk.
If we want to see the innovation we need in clean electrons, smart grids and energy efficiency, we need to intelligently redesign the garden—i.e. the market. When it comes to developing the next generation of clean power, “I don’t believe in evolution, I only believe in intelligent design,” says Amos Avidan, a principal vice president of Bechtel Corporation and an expert on building big power systems.
“We need intelligently designed policies to give us the best chance possible to produce the breakthroughs we need.”
From: “Hot, Flat and Crowded” by Thomas Friedman. Available in bookstores everywhere.
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No doubt competition is going to be the driving force for change both in policy and in industry, but what about just saving our asses from major earth shattering climate change? Has self preservation gone out of style? I suppose I’ll have to read the book to find out what Mr. Friedman has to say about that.
I think unfortunately in this day and age…self preservation has become the norm. Doing things because they are right or out of sheer altruism unfortunately are things of the past. What I found fascinating in this scenario is how Thomas Friedman, a died in the wool “Conservative”, rather than just shrieking at the Chinese of what the should do, knew exactly how to mold the message to move them forward in the direction of what he wanted them to do. If we look back at history, the goal in the industrial revolution was to produce; I think China has the same mindset. That is why there has been little oversight and lots of problems in what they have been producing of late. Give them a little healthy competition to move them in a more socially and environmentally responsible path…I applaud Friedman…whatever it takes to make people realize that whether it is out of self preservation or competition, it is imperative to save the planet. Thanks for sharing this…I will read this (and I otherwise probably would not have picked it up.) Appreciate the wide variety of sharing and caring that you have.
I suspect Friedman would answer that altruism doesn’t exist within the marketplace. We, as people, practice altruism. (Hopefully.) But the market lives only to make money and effective policy must unfortunately be designed around those ends.
I think that this points to a need for a combination of necessity. We’ve been talking “green” since the 70s and comparatively little has been done in these 38 years! It seems that awareness of the chokehold by the oil cartel created an initial move to solar and wind, but generally “ecology” was a stilted movement until recently when there did become an awareness that it was necessary for our planet’s survival. I think that the profit aspect will ultimately move this forward with rapidity. I actually hope that Mr. Friedman is right about that. If it was left up to altruism, this would have been set in motion over 30 years ago, when we as teenagers, were trying to get the “establishment” to become aware and make a change. I know I sound like an old hippy, but really, we’re the “establishment” now and we are starting to make this a reality! Hopefully our government will wake up and smell the roses while we still have some!
Interesting comments all. Maybe we should take this up on the community and get other people’s input as well. Is altruism dead? Is everything for profit and self motivation and that’s the only way we get results? What about Heathahhhh’s observation about the idealism of the 60’s? Let’s talk. Given the tenor of the world situation, it is definitely a topic worthy of exploration. Thanks WJ for sharing Thomas Friedman. It is someone I probably would never have given a thought to picking up his book. Hope that doesn’t mean I am getting closeminded.
As someone who always did my part from the 60’s onward, I have lived with this frustration that others did not join me on the Journey, even my own family.
I wasn’t ostracized, but I was always just thoughts of as a little kooky, for keeping all my clean bottles, caps, used paper etc. until it filled my garage (all this before there was any recycling), re-using any decent gift-paper, having to make at least 3 stops, even for local trips, before I’d use my car, and having my husband only use public transportation to commute from the suburbs to our large-city financial heart (when his peers were driving their BMWs) etc. etc.
Then, of course, there was “food”. We have been the only ones in our wide family supporting organic agriculture, throughout the ups and downs of our personal finances, over 40 years, because we are committed to the well-being of the planet and ALL who live therein. It’s cost us vacations we could no longer afford, and other things, because we supported organics, but I’m proud we have.
And, in the process, we learned to consume a lot less. Yes, I have to admit that I did NOT do “my share” of rampant, useless consumerism. I kept my cars for 20+ years, and didn’t worry they were a little less “efficient”, as I did not use them much, anyway. Detroit didn’t innovate barely at all.
And, once the problem of ‘oil, as a national security issue’, raised its ugly head in the 70’s, I had plenty of time to think in the 2 hours per time that we waited at gas stations for fuel, for months. President Jimmy Carter also made the most sincere effort to get alternative energy going, but the powers-that-be in government and in the “marketplace” quashed everything.
Those entrenched interests were in the position to make big investments in “new” technology, but they chose to “keep us over a barrel” (of oil!). They could have “owned” the new industry, but they chose self-interest over national and planetary interest.
We can’t depend on anyone with money now to do the right thing, either.
In the debate last night, McCain and Obama were asked about how to dole out taxpayer-funded research money for new alternative energy technology. As I remember, Obama didn’t answer the question, and McCain chose for Government to be given the job of doing the research, and then giving the technology to entrepreneurs. (The other choice mentioned in the question was to give grant money to thousands of entrepreneurs, in their garages, or in their little companies, like Friedman suggested).
I think both worlds work. Give some to government and university scientists — maybe half the pot, and give the rest to entrepreneurs, who show they have the smarts or can show some plans in progress.
I think the research needs to encompass cleaning polluted water (yes, I know that is not strictly an alternative energy issue, but it is crucial). And, it should encompass wave-generation (Oregon has already started with a grant on her coast, and full-fledged operations exist already in Ireland and Portugal), wind, solar, geo-thermal and the re-arrangement of the power-grid.
In the debate, I think one candidate also mentioned something like spending 150 million dollars for this alternative energy revolution research (may have been Obama), and I was shocked at how little that is! Can they spare fifty-cents for each American! So short-sighted!
AIG got almost half that much again, just today, for one more unexpected “bail-out”.
I don’t think either of these potential heads-of-state understand the real ways to get this revolution started, and the only captain-of-industry who seems to be DOING SOMETHING is T. Boone Pickens. Even he can’t get these ostrich cronies going! Shame that so few rich have vision or a sense of responsiblity, but I am aware of that, on every level, in the decades I lived among them, on the edges. Very closed minds.
So, who knows, maybe the Japanese or Chinese WILL beat us to it, especially if we are still stumbling over our own feet.
Best to all — Em
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