By Donella Meadows

–August 30, 1990–

The Arabs did us a favor. That’s what some people said after the oil shocks of the 1970s had settled a bit. By jacking up the price of oil, OPEC forced us to the creativity that resulted, over the period from 1975 to 1985, in producing a dollar’s worth of goods and services with 30 percent less energy.

Then the oil market see-sawed, as markets do. When oil price went back down in the mid-80s, we lost our momentum and undid some of our progress. But only some of it. The insulation we put into our walls is still there. The average mileage of a new car is double what it was in the early ’70s. The wind, hydro, and co-generation plants we installed are still giving us energy.

We’re in better shape than we were twenty years ago, which is a good thing, now that the Iraqis are doing us another favor.

They are not only making oil more expensive, they are reminding us that it was never as cheap as we thought it was. Whatever its immediate price on the market, oil has large and rising hidden costs in defense and in pollution.

Operation Desert Shield is costing us $20 million per day above the normal budget for our military presence in the Persian Gulf. Americans are paying that price on behalf of the world — only a fraction of Persian Gulf oil actually flows to us. If we count the Gulf defense cost toward the oil we actually get from there, we were already paying before the Iraqi flare-up well over $100 per barrel. Rocky Mountain Institute (RMI) analysts point out that if we invested just one year of that expenditure in insulating our buildings, we could eliminate Persian Gulf imports entirely.

In fact, they say, by using technologies now available, we could save 80 percent of the oil we use, while maintaining the same level of energy services, and at a cost below three dollars per barrel saved.

Read that last sentence carefully and ask yourself whether it’s really worth putting lives on the line for Arab oil.

It’s not possible to calculate in monetary terms the enormous costs of urban air pollution, oil spills, hazardous refinery wastes, acid rain, the greenhouse effect, and the impact of coal mining and oil handling on workers’ health. If we could assess these costs and add them as a user-pays tax on fossil fuels, the world would be working flat out to get free of oil and coal forever.

The good news, which the Iraqis have given us a chance to see again, is that we can do that — get free forever.

Sweden, which is already twice as energy efficient as we are, has worked out a detailed plan to double its energy efficiency, phase out the nuclear power plants that provide half its electricity, cut its greenhouse gas emissions by 30 percent, and save a billion dollars per year in the process.

Amulya Reddy of India and Jose Goldemberg of Brazil calculate that if the Third World nations used today’s most energy efficient technologies, they could rise to a Western European standard of living using only 10 percent more energy than they use now.

RMI has shown that a future world of eight billion people could live with a 1975 West German standard of living using only a third as much energy as the world uses now and getting it all from renewable sources.

What we need to bring about those results simply and automatically is to charge ourselves the full and fair cost of all forms of energy. That would let a real market, not a skewed, subsidized one dominated by special interests, choose energy technologies. The result would be a continuation of the technical transition we began in the 1970s — all the way through to the solar-based, highly efficient energy systems of the twenty-first century.

If we removed its subsidies, enforced safety rules, and charged appropriately for disposal of its wastes, nuclear power would die of its own expensiveness. (Just requiring it to buy insurance on the open market might be enough to free ourselves of all the problems of nuclear power.) If we charged for its defense, oil would be priced out of the market. If we charged for prevention of global warming, that would be the end of coal.

What would come forth as the first priority in a complete and honest energy market is super-efficiency, which is already economically and technically feasible. Off the shelf would come the 80-100 mpg cars that most auto companies have designed. We’d screw in the efficient light bulbs and finish the insulation jobs; we’d go for the most efficient appliances; we’d organize our lives to waste less energy and save tremendous amounts of money.

Next would come the solar options that we have been pretending are expensive, because we haven’t been subsidizing them to the extent we have the other forms of energy. In a market where all real costs were assessed, solar would suddenly look cheap. After a decade of development, it would be even cheaper. Those 80-100 mpg cars could run on vegetable oil or ethanol (which they already can do) or solar-generated hydrogen (which will take some more development). No global warming. Much less air pollution. No need to worry about the squabbles of Arabs.

Saddam Hussein has done us a favor by pushing us in a direction we should have been going anyway. But since he’s apparently not a very nice guy, we can do something really nasty back, the worst thing we could possibly do to him. We can get along without his oil.

Copyright Sustainability Institute 1990