Natural Capitalism, Ch. 2

There’s way too much in this chapter for me to do justice to in one post.  To give a quick summary of the main ideas, H&L first point out the major inefficiencies of the current automotive industry and then propose their natural capitalism-based solution, the “hypercar” which is significantly more efficient (80-200 mpg) and also leads to a significant reduction in the materials needed in the manufacturing process, while also catalyzing the switch to a fuel cell-based electricity generation system.  They then go on to discuss the problem that hypercars can’t solve: “too much driving by too many people in too many cars.”  They do propose some interesting policy ideas for dealing with this problem, including various methods for encouraging public transit (e.g. having employers charge a yearly parking fee, paying their employees the same amount every year, and letting them pocket the difference if they can find a cheaper way to get to work).

The two key components of the hypercar are its ultra-light weight and its hybrid engine, which H&L predict would evolve into a fuel cell. The hypercar would weigh 2-3 times less than a normal car, by taking advantage of light-weight carbon composites, rather than steel.  This light weight translates into much larger gains in energy efficiency, because, as H&L point out, most of a car’s power goes into moving the car, not the driver.  With an ultra lightweight car body, other components (such as the suspension, engine, etc) can also be smaller and lighter, compounding the efficiency gains.  The reductions in materials use achieved by a hypercar are quite staggering: “92% less iron and steel, 1/3 less aluminum, 3/5 less rubber, and up to 4/5 less platinum.”

They then present a rosy view of the hydrogen economy.  They suggest that fuel cells could be made commercial by widespread deployment in stationary applications, i.e. buildings.  As with other distributed generation systems, this could ultimately be cheaper than constructing new large centralized power plants.  But the key question of course, is where to get the hydrogen for the building and hypercar fuel cells.  Initially they suggest reforming natural gas and sequestering the carbon produced in this process.  Again they are a little vague on the timing of this; from other sources I’ve heard, it sounds like fuel cells won’t be commercially available in the price range they need for hypercars for another 20 years or so.

Unfortunately this is one chapter where the age of the book (1999) starts to show.  I wonder if H&L would be as optimistic about the power of “advanced technology, customer demands, competition, and entrepreneurship” to re-shape the auto industry if they were writing the book today.  In this chapter they mention that the president of Toyota in 1997 “predicted hybrid-electric cars would capture one-third of the world car market by 2005.”  H&L further report that “by the spring of 1998, at least 5 automakers were planning imminent volume
production of cars in the 80 mpg range.”  What happened?  H&L seemed to have neglected the large factor that consumer demand plays in moving a giant and reactionary industry like the automotive industry. It appears that Americans’ love of SUVs can only be curbed by high oil prices, not by more efficient vehicles alone.  Also, the cultural and educational difficulty of convincing the public that an ultra lightweight car is just as safe as an SUV may prove a major hurdle. Instead of H&L’s optimistic view that the “strategic advantages … of saving oil, protecting the climate, and strengthening the economy may justify giving automakers strong incentives to pursue their introduction into the marketplace even more aggressively”, we are still stuck with a government that is too timid to raise the CAFE standards.