Nearly everyone agrees that reducing U.S. dependence on foreign sources of energy is a good idea. But—the enthusiasm of technogeeks notwithstanding—producing hydrogen-powered cars may not be the best way to achieve that, according to a new study by two English researchers. Although replacing gas-powered U.S. automobiles with hydrogen-powered ones might slow global warming, generating the necessary hydrogen would require building either a million new wind turbines (enough to cover half of California) or a thousand additional nuclear-power plants. Neither approach is at all likely, but a recent analysis of Japan's energy-security policy suggests that maybe the United States should take a hard look at the nuclear option. According to a report published by the Baker Institute for Public Policy, at Rice University, 77 percent of Japan's energy needs were met by oil in 1973, when OPEC turned off the oil spigot and caused an energy crisis. Seeing the handwriting on the wall, the Japanese government worked rapidly to expand the country's nuclear capacity (it also developed programs aimed at substituting natural gas and coal for oil). The effort worked: by 2002 only 52 percent of Japan's energy came from oil—and whereas oil consumption in neighboring China and South Korea has more than doubled since the late 1980s, Japan's has been relatively stable. In the event of another oil crunch, Japan's investment in nuclear energy is likely to pay significant dividends. According to the Baker Institute's model, if the price of oil rose by 25 percent, Japan's nuclear capacity would save roughly $20 billion in GDP.
—"The Arithmetic of Renewable Energy," Andrew Oswald and Jim Oswald, Accountancy; "The Role of Nuclear Power in Enhancing Japan's Energy Security," James A. Baker III Institute for Public Policy, Rice University
To the roll of highway perils—drunks, cell phones, teenagers—can be added one more: the insured. A new study suggests that requiring insurance coverage may lead drivers to take a cavalier attitude toward road safety. Economists from Columbia University and Harvard Law School's Olin Center for Law, Economics, and Business examined the effects of the compulsory-insurance laws and no-fault insurance systems that were gradually adopted in the United States from 1970 to 1998. (Under no-fault systems each driver's insurance pays for the damages that he or she inflicts, though all states give drivers some exposure to lawsuits for negligence. Under older, fault-based systems, the at-fault driver pays all the damages.) Forty-five states now have compulsory insurance, and fourteen have no-fault systems. The researchers found that relaxation of liability is correlated with a 10 percent increase in traffic deaths (or about 4,000 dead travelers a year). Uninsured drivers tend to drive more carefully (after all, they themselves have to pay for accidents): for every one percent decrease in the number of uninsured drivers, the number of fatalities increases by two percent. Despite the "moral hazard" posed by insurance, the authors concede that compulsory and no-fault systems aren't all bad: though more people may die, the victims' families are far better remunerated than in the past.