Watching Lovins’ lecture reminded me of a quote by Saudi Prince who argued that higher oil prices will force western economies to speed up their work on alternative energy sources, thus, lower oil prices are beneficial to oil exporters like Saudi Arabia (CNN, 2011). According to my observations, private sector primarily makes decisions on economic basis and ignores the long-term trends in favor of quick profits. The current economics still favor fossil-fuel vehicles, thus, government should introduce policies that make it more expensive to own traditional fossil-fuel vehicles as compared to energy-efficient vehicles. Unless the economics for fossil-fuel vehicles become less-attractive, it will be difficult to persuade local automobile manufacturers to focus on vehicles that run on alternative sources of energy because they have sales and profit targets to meet.
China offers incentives to its automobile sector to invest in clean technologies which put U.S. automobile manufacturers at a disadvantage. Thus, it is only reasonable that U.S. government levels the competitive field and protect the long-term future of the automobile industry. As Lovins points out, there are not only economic benefits but also political benefits because it will lower reliance on imported oil. There are other innovative solutions, too. For example, the government may announce that rebate incentives will continue to be given for fuel-efficient cars for the next five years which will encourage the automobile manufacturers to gradually replace most fossil-fuel vehicles with fuel-efficient vehicles. The government may also announce that it will impose tax surcharge on fossil-fuel cars for indefinite period in the near future, irrespective of the oil prices in international markets. This will also put pressure on automobile manufacturers to move to production of fuel-efficient cars.
CNN. (2011, May 29). Saudi prince calls for lower oil prices. Retrieved October 22, 2012, from http://articles.cnn.com/2011-05-29/world/us.saudi.prince.oil_1_oil-prices-saudi-arabia-saudi-people?_s=PM:WORLD