InReview – Issue 62

Hot, Flat, and Crowded: Why We Need a Green Revolution and How It Can Renew America by Thomas Friedman. New York: Farar, Straus, and Giroux, 2008. 438 pp.

Thomas Friedman is the three-time Pulitzer prize winning writer for the New York Times. This is his fifth best-selling book.

The thesis of this book is that climate change is real, caused by an increase in CO2 emissions beyond the normal cycles, with a significant portion of these emissions coming from human activity. These emissions are now reaching a critical level that, unless turned around, will lead to catastrophic climate change. Up until now, the United States has led the way in dumping CO2 into the environment with its disproportionate use of hydrocarbons. New segments of the world, particularly China and India, are not only growing in population, but are also growing in terms of people who want “the American lifestyle.” This desire is spurred in large part by the flattening of the world through technology, connecting previously isolated people. This continued growth of CO2, Friedman argues, is not sustainable for the earth and its people in the long term, even in the next 50 years.

There is something we can do about all of this, Friedman argues. Innovation, sparked by a clear understanding of the problem, can lead us out of the dilemma we face toward the use of clean, renewable energy to power our growth. And who is better to take the lead in this innovation than the United States for two important reasons. The first is the moral responsibility based on the leadership the U.S. has taken in creating the problem in the first place. The second is the incredible innovation engine that has characterized U.S. business over the years, that needs only to be focused on the problem.

There is a significant barrier in starting this engine, however. Government incentives, research funding, and tax policies continue to favor the status quo. Rather than look forward holistically to this new world, U.S. policies look at a world long past, where water and oil were “free” and in unlimited supply. These policies need to provide incentives to do the right thing in the world as it now is. Friedman outlines numerous areas where he thinks such changes could be made to allow U.S. business to be the innovative engine to take us forward, not only growing the business opportunities but also providing the tools to head off certain, catastrophic climate change.

There are lots of problems with Friedman’s book. First, he doesn’t do an adequate job of making the case that climate change is both real and caused by humans, rather than part of a cycle. As a non-scientist, he makes blanket statements that any good scientist nuances with words like “highly likely” or “with high probability.” These errors give room for people to dismiss his premise and, hence, the whole book. He compounds this difficulty by trying to prove (rather than illustrate) the reality of climate change with numerous examples, in a style that any reader of Friedman has come to expect. Unfortunately, the plural of “anecdote” while interesting, don’t substantiate his case.

Then he quotes respected scientist Joseph Romm (p. 115) who supports his theory, though carefully qualifying his comments and adding the disclaimer, “I am skeptical of the so-called consensus on climate change as reported in the [UN] IPCC report.” Friedman’s next section expands on the details of the IPCC report as though it were proven fact. He didn’t hear his own expert’s words.

Second, Friedman too often proposes solutions without looking at the potential unintended consequences of them. A third weakness is the lack of thinking through a time frame of action. I believe this weakness biases him toward renewable energy sources, which have longer time frames, and away from conservation and cleaning up today’s carbon energy sources. There are many other places in the book where Friedman gets the details wrong.

That being said, this is a very important book. Friedman has raised big questions. He created a link between the environmentalists and business in a way that environmental issues can be seen as an opportunity to do good in society and make money as well, rather than being a constraint on business. He rightly argues that this is a systems problem that cannot be solved solely by working with the pieces.

Those who see his arguments as a call for the government to fiddle with the free enterprise system miss his key point. Policies and incentives already distort the free enterprise system — but were created for a different era with a different set of problems. This book should be studied by business leaders, political leaders, and concerned citizens. Look past the details and keep the focus on the big picture he is outlining. The final solution may look different from what Friedman proposes, and that’s fine. He has created the framework for an incredibly important discussion. Read this book!

Reviewed by Al Erisman

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The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin. New York: Touchstone, 1992. xxxii, 885 pp.

Daniel Yergin is co-founder and chairman of Cambridge Energy Research Associates (CERA), author of many books. He received the Pulitzer Prize for this book. He is a recipient of the United States Energy Award for “lifelong achievements in energy and the promotion of international understanding.”

Yergin has written the history of the oil business up until 1991. Alternately this book is the history of the developed world from 1850 until 1991 as seen through the lens of oil. From the discovery of oil in Pennsylvania in 1853, oil has had a strong influence on economies, governments, and business. Yes, he acknowledges that oil had been discovered long before 1853, but its limited use did not begin to change the world until this time.

Volatility in oil prices is nothing new. From a price of $10 per barrel (January 1861) to $.50 per barrel (June of 1861) to $13.75 (1865) to $2.40 (1867), oil has always been a risky business where fortunes are made and lost in short periods of time. Oil has played an important role in shaping international relationships as well. The establishment of the Suez Canal in 1892 was motivated by oil. The first drive-in gas station in the U.S. opened in St. Louis in 1907. The early oil finds in Iraq in 1925 by Western geologists opened the Middle East markets and created conflict from the early days. The battle by Middle Eastern share of oil coming from their borders started early in the oil period and reached an unprecedented 50-50 split in 1950.

This book is alive with conflicts, people, stories, and drama. The reader is pulled through the events as only the power of a great story can do. Many world conflicts, including the closing of the Suez Canal in 1967 (the third postwar oil crisis), the political turmoil in the Middle East, and the Iraq invasion of Kuwait have been shaped by oil. Key world figures appear prominently in this story including John D. Rockefeller, Winston Churchill, Saddam Hussein, and George W. Bush.

Ending in 1991 may raise the question of the book’s relevance today. Here are some gems from the Epilogue:

“A variety of global scenarios and risks can be identified for the future of oil and world society. But certainly one of the lessons of the history of oil is to expect the unexpected — “the surprise” — that becomes obvious only after the fact … A surprise could arise from an environmental crisis, leading to a major alteration in the energy economy. Or it could come from the Soviet Union … The new environmental agenda will hardly come to pass without battles over the accuracy of the science and its predictions, the extent of risks, the proper remedies — and the costs … Ours is a century in which every facet of our civilization has been transformed by the modern and mesmerizing alchemy of petroleum.”

I highly recommend this book for understanding the economic, political, and business world as it is, and perhaps for seeing how to go forward from here. Great book.

Reviewed by Al Erisman

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I. M. Wright’s “Hard Code” by Eric Brechner; Redmond, Wash.: Microsoft Press, 2008. xxi, 216 pp.

Eric Brechner works at Microsoft and has 23 years of leadership in software development and management.

Internal to Microsoft, Eric Brechner leads a team to identify and perpetuate best software engineering practices across the company. When he was asked to write an internal column on this subject, he decided he was too nice a guy to be hard hitting in his writing, so he wrote the columns under the pseudo name, I.M. Wright. The columns deal with software development, aligning software with the business, and people issues. His ideas extend far beyond programming to program management, ethics, and technology. The columns are well written, humorous in a geeky sort of way, and provide great insight. In compiling this book, he went back and added material under the heading “Eric Asides” to make internal jargon accessible to outside readers.

The book offers a fascinating look at the internal practices of the biggest software giant in the world, and is worth reading for this alone. But it also does a great job of recognizing the fundamental principle of technology — that if technology doesn’t connect with the business objectives, it doesn’t have much value. It would be very helpful for any leader or analyst involved in technological change in a business. My quibble is that the book was buried in the programming section of the local book store where few other than programmers would fi nd it. international understanding.” Yergin has written the history of the oil and business world as it is, and perhaps for seeing how to go forward from here. Great book.

Reviewed by Al Erisman