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Annual Report 1998

General Intro

Sustainable World


Maintain Biodiversity

Systemic Contamination

Energy and Climate

Economics for a Sustainable Planet

Secure World

Financial Info

Energy and Climate

To find indications of something amiss in the world energy economy, one need look no farther than a chart of gasoline prices from different countries around the world. In the United States, retail gasoline is at its lowest price for at least three decades. Almost everywhere else, prices at the pump are twice to four-times the price of gas in America.

On the face of it, this might seem to be a triumph of US energy policy. Instead, it is an indictment. U.S. gasoline prices fail to account for the immense financial burdens that gasoline use places on our economy, our environment and our health. Other countries benefit, at least in the short-run, from this short-sightedness. They reap the rewards of our huge investments in military operations in the Middle East to defend western access to oil. Largely avoiding those costs, they can use most of the taxes they impose upon gasoline to support domestic programs that, among other things, mitigate the health and environmental effects of cultures based on petroleum. The United States, in contrast, provides enormous subsidies-- for oil and gasoline, for cars, for roads,-- and doesn't begin to recoup the economic burden these items impose. Instead, we tax people for other things - for labor, savings and investment - to be able to pay those subsidies.

Were there no additional costs, this would simply be economic perversion. But because this system encourages continued reliance on fossil fuels, we meddle with the dynamics of the global climate. Indications, described in the opening essay for this program, are that we poke the climate beast at our own peril.

There are harbingers of change, however, that allow for guarded optimism. International negotiations under the auspices of the United Nations are making incremental progress toward an international accord for climate protection. Not surprisingly, the U.S. - including both Congress and the Clinton Administration - is obstructing this process rather than facilitating it, determined to preserve the false economy of fossil fuel subsidy and consumption.

Several leading players within the petroleum industry show signs that they are preparing for the next energy economy, one based on renewable energy and hydrogen. Royal Dutch Shell, for example, has established a new business unit, Shell Hydrogen, to provide it a toe-hold in the energy economy that will follow, one based on hydrogen instead of petroleum. They have also established a substantial philanthropic activity to assist developing nations shift to renewable energy based upon domestic resources. In addition, Shell, British Petroleum and Sun Oil have all publicly disengaged from efforts by most of the petroleum industry to derail international negotiations for climate protection. These three companies acknowledge that climate disruption is real and requires preventative action.

Most of the major automobile manufacturing companies now have made large investments in designing fuel cell cars. Billions of dollars of investment are now at work. Fuel cell manufacturers are scrambling to come on line with other products, including individual units for generating electricity in homes, portable generators, replacements for videocamera battery packs, and new power sources for wheelchairs.

The Foundation remains committed to advancing the rapid transition to a hydrogen economy. Our principle efforts focus on commercialization of fuel cells, advancing renewable energy in China, Brazil and India, and advancing public understanding of the need for climate protection.

Since 1996 the Foundation has also supported efforts, in Los Angeles and in the Chinese cities of Ningbo, Changchun and Shanghai to encourage a new model of public transportation, one that makes sense in terms of energyuse, is economically feasible, and provides the first-class transportation services that these cities, indeed all cities, need. The model builds from the experience of Curitiba, Brazil, where since the 1970s an extraordinarily successful public transit system has provided services that match subway service (people moved per unit time) at less than one-one hundreth of the capital cost. Led in Los Angeles by the Surface Transit Project and in China by the Uni-rule Institute of Economics, this work is showing dramatic progress, with three of the four cities (including Los Angeles) making substantial commitments toward implementing the Curitiba model.

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