Just before Thanksgiving, Senate Democrats (with the aid of a few Republicans) stymied the massive national energy bill, guaranteeing that debate on the measure would drag into an election year — and significantly reducing its chance of passing. The setback surprised some observers because the bill, which currently weighs in at just under 1,200 pages, was carefully designed by congressional leaders for maximum political appeal: Its ethanol subsidies tempted farm-state Democrats, while renewable-energy perks drew endorsements from advocates of wind and solar power.

Power to the People
By Vijay V. Vaitheeswaran
Farrar, Straus and Giroux,
358 pages, October 2003

But the legislation’s tastiest morsels were reserved for traditional energy industries — oil, gas, coal, and nuclear. Inspired by the energy policy goals of the White House, the proposed energy bill would ease restrictions on oil and gas drilling on public lands, pour some $2 billion into coal technology, and underwrite development of new nuclear power plants.

Journalist Vijay Vaitheeswaran, a longtime correspondent for The Economist magazine, is far from a knee-jerk environmentalist. But in his new book, Power to the People, he argues that pork-laden measures like the stalled U.S. energy bill are both environmentally and economically wrongheaded. Subsidies for dirty energy sources, he says, not only have the obvious effect of encouraging pollution but also obscure the numerous advantages of cleaner, more efficient technologies. Instead of competing for more government dollars for their favorite clean-energy source, he says, environmentalists could and should make free markets work for the planet. “Markets cannot do everything,” Vaitheeswaran writes, “but encouraging efficiency is one thing they are extremely good at.”

In the face of the energy bill and other industry-friendly proposals flowing from Washington, D.C., these days, a clean and efficient energy future might seem unlikely at best. Yet Vaitheeswaran is adamantly hopeful. He looks at three intertwined trends — the increasing liberalization of energy markets, the growing power of the global environmental movement, and the development of new, flexible energy technologies such as hydrogen-powered fuel cells — and concludes that clean (or at least cleaner) energy may very well be here to stay.

This trio of trends, he says, will encourage a “dramatic reversal of the age-old utility practice of building giant power plants far from the end user,” including increasing use of renewable-energy “micropower” plants — such as fuel cells and micro-turbines — located near homes and businesses. Such a transformation of the traditional centrally run grid, he says, could increase clean-power development not only in rich countries but throughout the world. Use of renewable energy in the global South would, he points out, protect millions of people from deadly pollutants and help solve knotty planetary problems such as climate change.

To support his arguments, Vaitheeswaran travels from the fortress-like Vienna headquarters of OPEC to the ultra-energy-efficient headquarters of the Rocky Mountain Institute in Old Snowmass, Colo. He gamely spars with Exxon boss Lee Raymond over the evidence for climate change: “So what do you suggest, Mr. Raymond?” he asks. “That I rely only on those climate scientists funded by oil companies like yours?” He recounts the frustrations of driving an all-electric car in Los Angeles, describes the technological wonders of a state-of-the-art offshore drilling rig, and details the practical and financial realities of fuel-cell development and marketing. His firsthand accounts are entertaining, his technical explanations are almost always clear, and his jazzy, amped-up writing style helps steer the reader through the often-wonky subject matter.

Gimme some Lovins.

Photo: Rocky Mountain Institute.

Vaitheeswaran has a few heroes — among them, RMI founder and energy-efficiency guru Amory Lovins — but he’s an admirably independent thinker, listening closely to his sources and then offering his own educated opinions. For instance, he’s dismissive of the future of nuclear power, despite the industry’s attempts to remake itself as a low-carbon-emission, “green” energy source. The persistent problem of nuclear waste disposal, he says, will ultimately doom the industry: “The best that the world’s sharpest nuclear minds could come up with after 50 years of research and endless pots of money is to take this horrid stuff, bury it in a big hole in the ground, and pray that our grandchildren will be clever enough to figure out how to make it safe.”

At the same time, Vaitheeswaran is not afraid to embrace some environmental heresies. He criticizes the European Union for balking at the United States’ push for more flexibility in the Kyoto Protocol, and blames regulatory inconsistencies, not market liberalization, for the California energy crisis.

The most dynamic force within the environmental movement, he argues, is the push for market-based incentives for clean energy. He cites the significant environmental gains brought about by several pollution-credit trading arrangements, including the sulfur-dioxide cap-and-trade plan instituted by the first President Bush, which dramatically reduced acid rain.

Vaitheeswaran also makes a strong case for other market-driven programs, such as Scandinavian countries’ pioneering experiments with “green taxes,” which encourage polluters to shape up by taxing carbon emissions and other environmentally harmful byproducts. He lauds eco-labeling and other transparency programs designed to allow citizens to “vote with their pocketbooks.”

Some of these tactics remain controversial within the environmental movement, but many are gaining wide acceptance, thanks in part to work by well-known groups such as Environmental Defense. Vaitheeswaran quotes a 2002 Washington Post opinion piece cowritten by Carl Pope of the Sierra Club and Ed Crane of the libertarian Cato Institute, both of whom found much to dislike about the energy bill, then making its first foray through Congress. “Devotees of Adam Smith and Rachel Carson should join together to propose an alternative bill, one that would simply strip away all energy subsidies and preferences,” they wrote. “Environmentalists would be happy if renewable energy sources and energy-efficient technologies were just allowed to compete with the fossil fuels industry on a level playing field.”

Vaitheeswaran is careful to point out that markets are not a cure-all for our dirty-power woes, and emphasizes that none of the tactics he advocates will provide easy solutions: Market reforms, he acknowledges, are “hard to get right, and disastrous when they go wrong.” But his confidence in the transforming power of these measures suggests that traditional environmentalists need to take a critical look at their strategies and assumptions — and, maybe, conclude that top-down regulations shouldn’t be the sole tool in their clean-energy toolbox.