COMMENTARY
A self-reliant Hawai'i — but at what cost?
By Christopher Grandy
An Oct. 23 Island Voices commentary argued that we should pursue self-reliance in energy and food. The tone of the piece, written by Mike Fitzgerald, president and CEO of Enterprise Honolulu, and Adm. Robert Kihune, chairman of the Economic Development Alliance of Hawai'i, suggested that Hawai'i is in imminent peril and that we must immediately take steps to reduce our risk of a decline in our standard of living.
Yet such a policy would dramatically raise the cost of living in Hawai'i, so taking self-reliance seriously should also generate some hard questions from Hawai'i's people.
Self-reliance in energy and food will not come cheap. Presumably we import oil and food because this is the least expensive means of acquiring these products. Becoming self-reliant will therefore cost more. Looked at the other way, every day Hawai'i residents reap a large "savings" by not being self-reliant.
How much are we willing to pay for self-reliance? Twenty percent more? Fifty percent more? Surely self-reliance is not infinitely valuable. How much, then, is it worth?
We could increase the pace of moving toward renewable energy sources, but this too would come with higher costs. How much more should we pay to speed up the pace? And what will we get if we do so?
Hawai'i residents are already engaged in increasing our energy efficiency and in looking for alternative transportation solutions. How much faster do we need to move, and how much will it cost? These are questions that residents need to answer before accepting a policy of self-reliance.
Advocates of self-reliance apparently envision a catastrophic event that will cut our cross-ocean supply lines. But we have felt a few large impacts recently without significant disruption: the 9/11 terrorist attacks, national recession, and the natural disasters of Hurricanes Katrina and Rita. Where was the devastation to Hawai'i's economy?
Markets reacted to these events. Prices of critical resources rose for a time, encouraging conservation by buyers and production by sellers, and then prices receded a few weeks later. This seems a pretty impressive record of sensible response.
Similar effects seem to be at work in the longer run. The argument for self-reliance would be more powerful if people failed to respond to prices. But people do respond. For example, in the face of sustained higher gasoline prices in recent months, sales of SUVs have fallen and interest in hybrid-drive vehicles has surged.
The hope that self-reliance will generate new economic activity in Hawai'i also raises questions. Land and water are in short supply here, so from whose activities will these resources be redirected?
While external disasters can disrupt supply lines to Hawai'i, we should also consider the implications of catastrophes within the state. Self-reliance in energy and food would make us more vulnerable to another Hurricane 'Iwa or Iniki. Abandoning supply and transportation linkages in the pursuit of self-sufficiency would magnify the economic damage of natural disasters in Hawai'i.
Fitzgerald and Kihune do us a service in pointing to the risks of relying on outside markets. But risks lie everywhere, no matter what we do. Moreover, it appears that people respond to price signals in the face of disruptions and shortages. The real question is whether something more is necessary — something like a massive realignment of our economy.
But those of us — and it is all of us — who will have to pay should be asking about the additional costs and the value of what we will get in return.
Christopher Grandy is an associate professor in the Public Administration Program at the University of Hawai'i. The views expressed here are his own. He wrote this commentary for The Advertiser.