Recently, we met friends for lunch along the Thames. The luncheon discussion was gay and carefree…but thoughtful too. One of our friends ran a commodity brokerage company in Geneva. Now, he has become an activist…a provocateur…for the free market.
“You know,” he said, “so much of this discussion of global climate change is completely irrational. It is more like a religious discussion than a scientific one. People – especially young people – think that some things are right and some things are wrong. There are a lot of people who think it is morally wrong to drive a Hummer, for example. It is not a question of cost/benefit ratios…or of trying to figure out whether it really makes sense. It is simply wrong.
“But I read recently an interesting study. The author tried to figure out how much environmental damage is done by Hummers…compared to socially-responsible cars, like that hybrid, the Prius.
“What he found was that it was not nearly as simple as you think. The Hummer is made of old technology – heavy steel. It is fairly easy to make…with existing plant and equipment…and the manufacturing process does fairly little environmental damage. And then, when it is worn out, it is easy to recycle; it is just a big lump of metal, after all.
“The Prius relies on newer technology. It’s made of a lot of composite materials, which apparently are very hard to deal with environmentally…and almost impossible to recycle. Plus, the process of building these things takes a lot of capital…and a lot of resources…all of which have environmental effects.
“The advantage of the Prius is that it takes less fuel to run per mile. Over time, the Prius is more environmentally friendly. But, at least according to this study, you have to run the Prius for 10 years before you are even. That is, it takes 10 years before the amount of environmental damage caused by the gas-guzzling Hummer catches up with the damage done by the Prius.”
Markets and Money