The advent of the hydrogen car could prompt a wave of automobile sales comparable to the rapid spread of the mobile telephone. This innovation, which is associated with an important technological breakthrough, will provide an economic impulse.
Much more inspiring than talking about the threat of air pollution is the perspective of an economic impulse due to the implementation of the hydrogen economy. The oil industry continues to invest around $100 billion a year in the search for new energy sources. With the exception of oil and gas, that money yields very little result: hardly any new jobs, no new technology, no innovation. The hydrogen economy can offer the world a new phase of economic growth and innovation. An energy revolution that will trickle down throughout society, as did the transition from wood to coal and from coal to oil which created enormous economic impulses.
The American ‘hydrogen guru’ Amory Lovins – founder and director of the influential Rocky Mountains Institute – sketches a thorough, step-by-step and profitable transition to the hydrogen economy. Lovins shows that huge investments are completely unnecessary for the transition. The investments can be carried by the business community, eliminating the need for any multi-billion government investment programs. More to the point: the investments are cheaper and more profitable for the private sector than continuing on, business as usual. Lovins provides the following arguments:
– Consumers can be charged a higher price for hydrogen because it has more to offer as an energy carrier compared to oil and gas;
– Investing in hydrogen production is less risky than drilling for oil and gas, where success is uncertain;
– The more sustainable the production method for hydrogen – for example, with the aid of solar panels and windmills – the lower the risk of price fluctuations, while fluctuating oil and gas prices represent a major cost item for many companies;
– Hydrogen can be produced close to consumers, which avoids the high cost of maintaining a complex infrastructure;
– Global warming is expected to saddle companies with additional environmental taxes, which would be avoided with the implementation of the hydrogen economy.
Using US petrol prices – which are remarkably low, around half the average price in the EU – the cost of producing hydrogen from natural gas for use in a fuel cell-powered car would already be competitive. Companies like BP, Ford and Accenture have confirmed this. The transition to hydrogen is an interesting possibility from a competitive perspective alone; a fact that weighs more heavily with businesspeople and politicians than the need to take steps against global warming.
For car manufacturers, the perspective of a new boom is shimmering on the horizon. Supported by limited tax measures that governments could permit themselves due to the expected savings (see Argument 1), the launch of a fuel cell car could prompt a wave of sales comparable to the rapid spread of the mobile telephone. Who wouldn’t want to drive around in a new, clean, silent car if it were offered for a reasonable price? Experts anticipate that the largest portion of American and European car fleets could be replaced within 10 years.
And then there is the perspective of producing sustainable energy. Wind and solar energy are growing by over 30% a year and are therefore by far the fastest growing energy sources (oil production is growing by 1.5% a year). Moreover, wind energy is already competitive with oil and gas. Mark Moody Stewart, the former chairman of Shell, recently released a report for the G8. At its presentation he claimed, ‘This [wind energy, ed.] is not something to look forward to for the future. It is here, today.’
A study by the World Watch Institute reveals that for every new megawatt produced, 22 jobs are created. Wind energy is a labour intensive industry that requires a range of experts – from designers and manufacturers to meteorologists and maintenance staff. The study predicts that the production of wind energy will create some 3 million new jobs over the next two decades in Europe, North America and China. Compare that to the laboured efforts of the Germans and British to maintain a few thousand jobs in their coal mining industry using heavy subsidies that are often as high as the employees’ salaries.
Meanwhile, the oil industry is not creating any new employment despite a spate of subsidies totalling an estimated $150 billion a year. In a recent study the European Commission wrote that the price of electricity would double if all the external costs (health, labour productivity) of generating fossil fuels were included. Solar energy offers comparable employment perspectives, including in the developing world. India, for example, is the third-largest producer of solar panels.