Killing the energy pain with Capitalism

Can you introduce new products into a segment that has no immediate pain and drive change in consumer buying behavior? No.

Global Warming falls into the category of problems that have no immediate pain to the consumer. This is not to say that Global Warming is not the largest social problem facing this and future generations, because it is. The way that businesses and corporations start to address the problem is through the identification of a revenue opportunity in offering alternative energy products and services that address immediate customer pain. That is the capitalist solution to addressing Global Warming.

Wikipedia on Solar EnergyResistance to change
A big problem facing alternative energy vendors is the built-in institutional resistance to changing the status quo. There are Billions of dollars being generated with the current energy solutions based on petroleum. Up until recently, a $2 and $3 per gallon price point has not been enough of a reason for consumers to seek alternatives to their current energy consumption. Even the increasing social consciousness brought on by Global Warming has not been enough of a factor to drive change. And in fact, the Global Warming argument puts energy efficiency into more of a vitamin rather than pain killer category. A potential threat to the increasing drive for change to move to more energy efficient products are the oil companies ability to manipulate the price per gallon of gas back down to $3 and even $2 per gallon. If you think this is a case of skepticism, then just remember that capitalism can both drive companies to build alternative energy products and drive the price of gas down to increase demand.

The Fundamental energy question
Have energy costs become enough of a pain that people are willing to change their lifestyles to adopt more energy efficient products and services? There are a lot of venture dollars going into the renewable and green energy segment so the greed factor is forming. But can that be enough of a driving factor without consumers clamoring for energy efficiency? And can all of this be done in a vacuum without considering the built-in institutional resistance to change?

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3 thoughts on “Killing the energy pain with Capitalism

  1. Capitalism will bring about the change, if it is allowed to flourish. If the government gets involved it will only stifle the best and the brightest who will find other areas to use their knowledge and hard work. At least that’s the way it’s always been. Think of the people who were ahead of the curve and installed solar/wind to supplement their homes. The payback curve just shifted in their favor. They’ve just reaped a great return on their investment. Now the others can follow. http://www.bentpage.wordpress.com.

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  2. At the core of capitalism is an insatiable greed for money and not a desire to decrease the production of greenhouse gases. When a handful of companies and organizations have a choke hold on a critical resource such as oil, it is in their best interest to either artificially increase prices to squeeze as much profit as possible or decrease prices to increase demand. For those in California, they felt the full brunt of unchecked energy companies earlier this decade when electric prices went through the roof. Spurring innovation in alternative energy is critical but it has to go hand in hand with managing oil companies’ greed and reducing demand of inefficient energy options.

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