Critical Issues Forum Ross Harding Savannah October 14 th 2008

Three Critical Issues ► Rapidly rising energy costs triggered a global financial collapse ► Energy and quality of life are inexorably linked ► A lesson learnt – It is not enough to produce alternatives to fossil fuels, we need to reduce the cost of energy to remain globally competitive.

Energy – or should I say cheap energy, drove the US to be a world economic power. Cheap energy is over. Dollar denominated oil is a US focused problem. If all the world used energy like we do, only 1.6 Billion people cold survive not the 6.6 Billion that live today.

We are among the most inefficient energy consumers, when combined with the new reality of high energy cost = reduction in competitiveness and reduction in our quality of life. All things that we consider of little value get squandered

► Quality of Life – different things to different people  Healthy, Wealthy and Happy?  35 Hour Work week?  Able to shop at Wal-Mart at 3am on a Tuesday?  Based on house size?  Based on political system? What could you give up and NOT have an impact on your quality of life?

► The Economist – Quality of Life Index ► 9 measures of economic, comfort, political, longevity, infant mortality.. ► Yale/London School of Economics – Human Development Index ► Life Expectancy, Literacy, GDP  The Issue is not “who has the best quality of life” but rather “why do they vary?” High ██ and over ██ 0.900– ██ 0.850– ██ 0.800– Medium ██ –0.799 ██ –0.749 ██ –0.699 ██ –0.649 ██ –0.599 ██ –0.549 Low ██ 0.450– ██ 0.400– ██ 0.350– ██ under ██ not availab le

Energy Efficiency A small change in energy use can make a large improvement in HDI – but only to a point Many developed countries have a similar or better HDI than we do but use 50% less energy per capita It’s all about choices – where we live, how we commute, how we are taxed and what it is spent on,what we eat….

Lessons Learnt ► When the financial crisis passes the global energy problems will remain. ► We need to have a step reduction in energy costs to regain global competitiveness for both domestic and export growth  Focus investments on conservation and efficiency - The cheapest energy is that which you do not use.  Renewable sources across time, must be cheaper than any finite sources due to supply and demand and should be developed  We must focus on large scale solution to minimize costs and fund new distribution and transportation infrastructure

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