Amory Lovins was interested in energy policy before such a discipline even existed. Back in 1971, while studying at Oxford University, he told his advisers he wished to pursue a doctorate in the topic. At the time, there were no government departments of energy, and what passed for policy was simply whatever emerged, de facto, from the decisions of engineers, lawyers, and accountants at power companies. In other words, energy policy was running on autopilot, and in Lovins's opinion, it wasn't headed in a very wise direction. Nonetheless, he was told that energy was not a sufficiently rigorous topic for an academic thesis. So he quit and began research that would form the basis of a landmark Foreign Affairs article he wrote in 1976 (during the oil embargo), which put energy efficiency on the U.S. agenda.

To hear Lovins tell it, his interest was less a sign of uncanny prescience than a function of pure logic. "As I read about the nexus between energy resources, security development, and the environment," he says, "it seemed that energy was a master key to unlock many of these interlinked puzzles, or teach us new ways to think about resource problems."

He has spent the last 36 years pondering those puzzles, exploring how companies and market incentives can drive smarter energy policy that benefits the environment and doesn't entail sacrifice. In 1982, he co-founded the Rocky Mountain Institute, a nonprofit "think and do tank" that advises governments and businesses and even incubated a company that makes a carbon composite Lovins thinks will revolutionize the car industry. He also co-authored Natural Capitalism, which has become something of a bible for companies looking to both do well financially and do right by the environment.

Blue Egg caught up with him on the eve of RMI's 25th anniversary to get his take on how smart energy policy-and self-interest-really will save the world.

You often say that more efficient energy policy doesn't cost money-that it actually saves money and is profitable for business. If that's true, why is it taking so long for that to become a reality?
Many people don't realize that energy efficiency-and the climate protection that comes with it-are profitable, not costly. Attentive companies cut their energy use and make billions of dollars of profit substituting efficiency for energy, but the public discourse around climate in particular is just the opposite. It's all about cost burdens and sacrifices. If people realized that saving fuel is cheaper than buying fuel-and therefore climate protection is profitable, not costly-then the political resistance would melt faster than a glacier.

There are also 60 or 80 well-known obstacles to using energy in a way that makes sense and makes money. For example, why fix up the building that your landlord owns? Why should the landlord [make the building more energy-efficient] if you pay the bill? Or: In 48 states, we reward electric utilities for selling us more electricity and penalize them for cutting our bill. We do that in 40 states with natural gas. That's dumb as a possum, and we need to stop doing it.

With energy efficiency, it's a tricky proposition to persuade people to invest now for a payback over time. Is that one of your 60 to 80 barriers?
Sure, most people have a very short-term view of the time value of money. And the poorer you are, the more you have to live paycheck to paycheck, and the less you can afford to invest up front to get savings later. That's why, for example, it would be advantageous to wrap those costs into the mortgage so you pay for them over time, just like you did for the house in the first place. And in fact, we're starting to do these wraparound mortgages with the solar-power retrofits.

These problems can be solved. But they take care and attention, and we haven't paid much attention to energy efficiency in this country since the mid-'80s, when it worked so well. We had a good run from about '79 to '86. In those eight years, GDP grew 27 percent, oil use fell 17 percent, oil imports were cut in half, imports from the Persian Gulf went down 87 percent and would have been gone the next year if we had kept on that path. We turned out in America to be the Saudi Arabia of what I call "negabarrels." We had more market power than OPEC. We helped cut their market-their exports-in half, and it broke their pricing power for decades because we could save oil faster than they could conveniently sell less oil. We could do that old play all over again, much better.

And that was mainly from conservation?
It was almost entirely from energy efficiency. There was modest behavioral change, and there were some fuel substitutions. For example, we gradually cut back on the use of oil to make electricity. But the most important thing was that our new cars got about seven miles a gallon better mileage, and 96 percent of that savings was from making the cars smarter-only 4 percent came from making them smaller.

What's your take on biofuels as a solution?
I think corn ethanol is getting better, but it's a relatively small and heavily subsidized and costly resource. It will be displaced by other biofuels, especially cellulosic ethanol, made of woody, wheaty stuff. We're learning a lot of new tricks-like how to make oil out of algae-which are looking very promising. These biofuels can produce enough fuel, combined with saved natural gas and efficient use of oil, to get the country completely off oil by the 2040s. The average cost of doing that is only a quarter of what we pay for oil right now.

Do you have concerns about corn ethanol putting fuel markets in competition with food markets?
Sure. It solves our problem, though, that we don't need to have [corn ethanol], and it's cheaper not to. For example, if you have efficient vehicles that are the same or better in all respects, then you don't need nearly as much liquid fuel to run them, and you could make enough ethanol without interfering at all with the production of food crops. Or you could, for example, grow switchgrass and elephant grass on conversation reserve land, which we now idle, and plant with an annual cover crop to reduce oil erosion. Switchgrass is a prairie perennial. It comes up by itself with no inputs, no cultivation, and will hold those erodible soils much better because it has roughly two-meter roots. So that doesn't compete in any way with food production, either.

You've been very involved in the development of a lightweight "hypercar" made from carbon composite. How far away are we from seeing those in mass production?
About five years. Maybe even a little less. We're very pleased with how these game-changing innovations are coming along. There is now sufficiently harsh competition in the auto business to elicit that kind of fundamental change. So, watch this space. This competition is going to change either the managers or their minds, whichever happens first.

As a native of Flint, Michigan, I'm betting that the managers will be changed first.
Well, that's already happening. In fact, the new CEO of Ford Motor Company, Alan Mulally, was CEO of Boeing Commercial Airplanes, where he led an efficiency leapfrog in a 787 Dreamliner that made it half out of carbon fiber composites, up from 9 percent in a 777, and radically simplified it with a much better integrated design so it saves about a fifth of the fuel and costs the same. I think we're going to see a willingness to consider similarly radical moves in Detroit. Basically, Detroit has the opportunity to do what Boeing did, which went from being on the ropes to being miles ahead of Airbus in just two or three years. Boeing is now sold out on this airplane into 2014. It's the fastest order takeoff of any airplane in history, and they're going to roll out that suite of innovations to every airplane they make before Airbus can even steer themselves out of the ditch. That would be a really good strategy for American automakers.

Hear, hear. What other companies is RMI helping to find innovative ways to save energy?
Wal-Mart, for example, is leading the national-and indeed global-transition to doubling the efficiency of heavy trucks, eighteen-wheelers. They are highly motivated, because they are going to make billions of dollars in cost reduction out of those trucks. Every mile per gallon by which they improve their heavy-truck fleet drops $42 million a year to their bottom line. Just for starters, they have announced that they require of their suppliers double-efficiency trucks. That means going from six and a half miles per gallon to 13. So six and a half times $42 million a year adds up to billions of dollars over time.

What's a double-efficiency truck?
It looks roughly the same, but it has better aerodynamics. It might have skirts over the wheels, it will have more efficient tires, it has certain other sculpted devices for streamlining airflow, over and around the truck, and it may use some modestly lighter construction so that you can haul more payload in the same truck if it's weight-limited. It probably will have an auxiliary power unit on board to eliminate idling, especially when you're parked overnight. It might have engine and driveline improvements, but those are the least important parts of doubling or tripling the truck efficiencies. Mostly, it's in the aerodynamics and tires.

That sounds so simple. There's not a lot of whiz-bang technology in that solution.
No, this is not rocket science. It's in a way good, Victorian engineering rediscovered. But it does require attention. There have been a lot of interesting conversations between buyers and suppliers. The buyers simply didn't realize they could double or triple truck efficiency, so they hadn't been paying attention. It wasn't that they weren't smart; they just didn't have the right information. And once we provided that, Wal-Mart, with its enormous demand pool, started to transform the industry.

Are there other areas where you're seeing these types of giant efficiency gains?
There's a similar revolution going on in efficient use and alternative supply of electricity. Two-fifths of the CO2 emissions comes from power plants; another two-fifths, from burning oil. So we have technologies now for saving about three-quarters of our electricity. Those technologies are cheaper than just running a coal or nuclear station, and even installing them ultimately costs nothing. My own household electric bill, if I didn't make solar power and bought it all from a utility company, would be five bucks a month for 4,000 square feet. And the investment I made in solar technology in 1983 was paid back in 10 months. Today, I grow bananas in my house-with no furnace-in temperatures up in the mountains down to -47°F.

Is it feasible to run a whole country on solar power?
We're told you need big power plants to run a big economy. But if I told you, "Well, a lot of people make phone calls, so we need more central switching stations full of copper and wires," you'd say, "Wait a minute. Where have you been? We do that with decentralized packet switching now." Or if I told you, "Lots of people need computing, so we better build more mainframe computer service centers," you'd say, "No, we do that with networked PCs." It's the same story with power plants. A single million-kilowatt power plant sends out the same electrons as a million one-kilowatt plants or any combination in between. But the little ones are cheaper, faster, and more reliable.

This kind of so-called micropower is no longer a fringe activity. In fact, it makes a sixth of the world's electricity now, slightly more than nuclear. It added four times the output and 11 times the capacity that nuclear added. So the revolution already happened-sorry if you missed it. The reason it happened-and the reason micropower is essentially all financed by private risk capital (which is not true of any nuclear plant on Earth)-is that the smaller, faster, cheaper kinds of power-producing equipment simply have lower costs and lower financial risks than central stations. So, nuclear is only bought by central planners. Frankly, I would rather trust the choices of capitalists in New York than bureaucrats in Beijing.

If you had a magical power over the environment, what would that be?
Over the environment, or what we're doing to it?

Either.
If I could roll two wishes into one, I would bust barriers to using energy and resources in a way that saves money. And I would take away all subsidies so that in energy, for example, all ways to save or produce energy would compete fairly at honest prices regardless of which kind they are, what technology they use, how big they are or where they are, or who owns them. Let's see who's not in favor of that.

Do you prefer walking, biking, busing, or some other form of transportation?
I have a ten-meter commute to work across my banana jungle, so I'm planning to install vines and swing to work. But as my old mentor Dave Brower said, "All those who believe in individual mass transit raise your right foot." Actually, I do drive. I have a 64-mile-a-gallon two-seat aluminum hybrid, and I tank it up every couple of months, whether it needs it or not.

What eco-accomplishment are you most proud of?
Probably having redefined the energy problem.

What eco-sin are you least proud of?
I fly too much. We offset the flights with high-quality carbon savings, but it's better not to fly in the first place. I'm doing more and more of my lectures by Internet videoconference. I just ship the electrons and leave the heavy nuclei at home.

You don't carpool to work, but if you did carpool, who would you want as your carpool buddy?
Some interesting, much higher primate who is a really good driver and has an efficient car.

What's one easy thing you do for the environment that you wish everyone would do?
Saul Alinsky was asked how he organized people to change the mood and actions of a society. He said, "Oh, it's easy: First you talk to one person, then you talk to two people."

So you're somewhat of an evangelist.
Well, I don't have a special relish for the indiscriminate infliction of truth on people. But I think there are different reasons or arguments that appeal to different people, and you have to talk to folks where they're at, not where you're at, finding the common ground that will spark their interest in making better choices. Of course, choice requires attention, and paying attention can be a hassle when there's a lot of other stuff going on in your life.

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