Google’s Clout and Bush’s
July 24th, 2006It’s a rather busy today, between soccer practice (I am a keeper) and working at my school in the morning (I take care of the cows), and so I’d like to redirect you to a couple of articles I enjoyed this morning. First is this about biofuel.
Reasonable people say they’d like to tax or regulate carbon, but alas it’s politically impossible. They invoke President Bill Clinton’s humiliating failure to secure an energy tax in 1993. They declare that carbon taxes or regulations would cripple the economy. These reasonable defeatists should meet Vinod Khosla, the Silicon Valley venture capitalist who bet big and early on Google and Amazon. Khosla’s current bet is on next-generation ethanol. He believes, with all the passion of a techno-evangelist, that we can get most of our vehicle fuel from the Midwest rather than the Middle East, and we can do so simply by growing it. He shows doubters a photograph of a bamboo-like crop that sprouts 11 feet in just one year. If South Dakota were planted with this stuff, our dependence on Saudi fundamentalists would fall — and so would our output of climate-warming carbon.
Khosla has made a fortune betting on technology, and he’s invested tens of millions of his own dollars in the futuristic ethanol that will replace today’s corn-based version. Yet he’s the first to say that we can’t address climate change with technology alone. Government must deliver the right tax and regulatory fixes to persuade people to adopt ethanol. So the first lesson that Khosla teaches is that politicians have to act. But the second lesson is more pleasant: The government fixes that Khosla seeks are not actually so burdensome. Khosla wants government to require auto companies to make more flex-fuel cars that run on gasoline or ethanol. Well, thousands of flex-fuel cars are sold in Brazil, and they’re barely more expensive than ordinary ones. Khosla wants government to require big gasoline distributors to install ethanol pumps at a tenth of their gas stations. Well, it costs less than $50,000 to convert a pump. Assuming 20,000 conversions, this is a $1 billion problem — a flyspeck on a $12 trillion economy.
The other government policy that Khosla wants is a reform of the ethanol subsidy. At the moment, the subsidy is worth 51 cents per gallon, but Khosla proposes that it be lower when oil prices are high and vice versa. By switching to a variable subsidy, the government would insure ethanol investors against the danger that OPEC might cut prices to drive them out of business. Subsidies would rise and fall, but the long-run cost of this reform would be about zero.
Don’t you love creative solutions and innovation? If George Bush’s buddies in Halliburton can screw up our foreign policy so bad, maybe it’s time we turn to Al Gore (in 08!) and have his friends at Google fix things.
In Israel, the War is said estimated to last about ten more days, and in my view, it’s way too many. Alas, George Bush would rather use his clout to allow Israel to destroy a growing Democracy, much like he’d rather use his influence to limit stem cell research, and to change NASA’s mission statement, removing “to understand and protect our home planet” from the agency’s motto. For those of you who look at that and feel cynical indignation, don’t; all he’s trying to do is make sure they focus on the right things, such as the future colonization of Mars!
To the moon, America!