Do the environmental and energy crises driving so many of today’s headlines actually represent a unique opportunity for revitalizing the global economy? That is the argument that Pulitzer Prize–winning journalist Thomas L. Friedman advances in his latest book, Hot, Flat, and Crowded: Why We Need a Green Revolution—and How It Can Renew America (Farrar, Straus & Giroux, 2008). Steve Mirsky, a staff editor and writer for Scientific American and host of its Science Talk podcast, spoke with Friedman about his book in August; what follows is adapted from that conversation, which can be heard/read in full here.
—The Editors

MIRSKY: Why do you call the book “Hot, Flat, and Crowded”?
FRIEDMAN: What we’re seeing in the world today is the convergence of three big, seismic events. The first is obviously global warming. Second is what I call global flattening, which is my shorthand for the rise of middle classes all across the world in bigger numbers than ever before, from China to Brazil to India to Russia. Those middle classes increasingly have the energy and consumption patterns, demands and aspirations of Americans. Third is global population growth. When I was born in 1953, there were about 2.68 billion people on the planet; if I live to be 100, according to the U.N. there will be more than nine billion. The population will have more than tripled in my lifetime.

These three huge events—global warming, global flattening and global crowding—are like three flames that have converged to create a really big fire. And that fire is boiling a set of five problems that are going to shape the 21st century and a new era of history that I call the Energy-Climate Era.

Those five problems are: climate change; petro-dictatorship (the rise of Russia, Iran, Saudi Arabia and Venezuela); constraints on energy and natural resource supply and demand (we see that from food to fuel today); biodiversity loss (the fact that we are right now in the middle of the sixth great extinction in Earth’s history); and finally something I call energy poverty—the 1.6 billion people on the planet who still have no on-off switch in their life because they have no direct grid electricity. How we manage these five problems will determine the stability or instability of the 21st century.

In a world that is hot, flat and crowded, clean power and clean technology are going to be a currency of geopolitical and military power, every bit as much as tanks, planes and nuclear missiles have been. In a world that’s hot, flat and crowded, clean tech has to be the next great global industry. Therefore, the country that takes the lead in clean power and clean tech is going to be by definition an economic and strategic leader in the 21st century. That’s why there’s absolutely no contradiction—not only between going green and being patriotic but also between being geopolitical and geostrategic. They go together.

You’re emphatic that the U.S. needs to develop a new set of systems to tackle those problems successfully.
If you don’t do things systematically, you end up supporting corn ethanol in Iowa and thinking you solved the problem, when all you have really done is drive up food prices and encourage more people to plant palm oil in the Amazon.

Right now we have a system: it’s the dirty fuel system, and it works really well. Within a mile of your house you can probably find a gas station to fill your car with dirty fuel. So this system works really well for getting that dirty fuel from the oil well, to the tanker, to the refinery, to your neighborhood and into your car. That system allows ordinary people to do pretty extraordinary things: to get personal mobility at what for many years was a very cheap price. Of course, we now know that in doing so we are also despoiling the environment, strengthening petro-dictatorship, driving biodiversity loss, and so on.

So we have to replace that system with a clean fuel system—because only a system allows ordinary people to do extraordinary things. If we don’t enable ordinary people to do extraordinary things by way of energy efficiency, clean power and conservation, you’ll never achieve the scale of change we need. One of the things you most often hear people say is, “We need a clean energy Manhattan Project.” I am against that approach, because I don’t think 12 scientists in Los Alamos are going to solve this problem or give us what we need. What we don’t have in energy today is a real market that would encourage 100,000 Manhattan Projects in 100,000 garages with 100,000 ideas, out of which 100 will be really promising, 10 will be workable and two will be the next green Google.

How do you get that kind of market? You’ve got to shape it in two ways. One is with the right price signal. We need to have a tax on carbon that is long-term, fixed and durable. So those 100,000 inventors know if they do come up with that breakthrough, and if OPEC lowers the price of oil, it won’t knock them out of the game. And second, we need to rewrite the rules around our utilities so that they are incentivized not to act like $5-all-you-can-eat electron buffets, where they get richer when you consume more electrons. Instead we should turn them into partners for energy efficiency, so they’re paid not for kilowatts sold, but for watts saved.

Is it a good idea to meddle so extensively with the free market for energy?
[Laughing.] Oh, yeah, a totally free market dominated globally by the world’s biggest cartel, dominated domestically by fossil-fuel companies who have written all the rules in Congress—pages’ worth of depletion allowances and tax shenanigans that these guys have written in to give themselves advantages. We wouldn’t want to upset that free market, would we? There is no such thing as a free market, no more than there is a farm or a garden that grows without fertilizer, without proper plowing, without intelligence brought into it. Markets are shaped by rules, incentives and disincentives, and right now our market is shaped by the dirty fuel system.

Because politicians won’t act. In effect they’ve said, “We’re just going to let the market do it.” Well, that market brought us $140-a-barrel oil, and it brought us $4.50 gasoline. If you like letting the market do this, that’s what you’re going to get.

Now, you could say, “Isn’t the market stimulating the development of alternatives?” Yes, to some degree. But when you let the market run all this policy, the biggest profits go to the petro-dictators. When the market sends the price up to $140 a barrel and you don’t have a tax on it to capture some of that yourself, nearly all of it goes to strengthening our enemies and weakening our balance of payments and our currency. What doesn’t go abroad goes here to legacy industries: coal, oil and gas companies that don’t have a huge incentive for moving to a new system.

Furthermore, if the market is in charge, it can send the price up, but it can also send the price down. If I’m someone who might have an incentive to move to a new system, do I really want to bet the farm on renewable energy? Maybe the oil price will go to $70 a barrel tomorrow, and my wind and solar company will be out of business. What Jeff Immelt [CEO of General Electric] says to me in my book is, “Tom, I am not going to make a 40-year multibillion-dollar bet on a 15-minute price signal.” And who would?

But how can politicians be induced to stand up for the unpopular move of imposing a carbon tax?
Let’s imagine you are in a campaign, and your opponent says, “There goes my opponent Mr. Friedman—another tax-and-spend liberal. He’s never met a tax he didn’t like. Now he’s for an energy tax, now he wants to tax your gasoline more.” What I would say is, “Let’s get one thing straight. My opponent and I are both for a tax. He doesn’t mind that his taxes go to the Saudi, Russian or Venezuelan treasuries. I just prefer that my taxes go to the U.S. Treasury. But let’s not fool ourselves that we’re not paying a tax here.” Now, if you can’t win that debate, you don’t belong in politics.

What about resistance from people who aren’t even convinced that problems such as global warming are real?
Suppose those who believe in climate change are wrong, but we do everything we can in our power to prepare our economy for a world of climate change anyway. We shift to a clean energy system. We adapt how we use energy. We become hyper­efficient. What’s the worst that will happen? In a world that’s just flat and crowded, we will still be leaders in the next great global industry because we are going to have to make those same changes to adapt to flat-meets-crowded.

The overarching message of my book is: the world has a problem, and America has a problem. The world’s problem is that it’s getting hot, flat and crowded, which is driving these five trends. America also has a problem, though, and it’s that we’ve lost our groove. We’ve lost our edge and our focus as a country. Lurking down the road is the next great global industry. It’s called clean power, clean energy, clean tech—it has to be the next great global industry.

If we take the lead in that industry, if we take the lead in solving the world’s problem, we will solve our own problem, too. We will be generating precisely the kind of innovation and breakthroughs to help the world with the most fundamental challenges it faces today. And in so doing, we will make ourselves more respected, strong, secure, entrepreneurial, rich and competitive.

When you go down that road of clean tech, you not only have cleaner air. You have a new industry that can’t be outsourced so easily. You become more economically stable, because you’re not shipping all those dollars abroad. You become more secure because your source of fuel isn’t dependent on the whims of some petro-dictator. So, it’s not just win-win. It’s win-win-win-win-win.

Note: This article was originally printed with the title, "The Need to Lead in Clean Tech".