Chapter 2

http://world.honda.com/news/2006/4060108FCX/

This is an article about the new fuel cell vehicle (FCV) that Honda is planning to produce in the near future. The FCX is a sedan that uses hydrogen as fuel, which closely resembles the Honda Civic. Compared to fossil fuels, hydrogen is completely pollution free and offers total comfort for our ozone. Basically, the fuel cell engine takes oxygen and hydrogen, and uses them to create electricity and water, so the only damage it would make in our habitat will be streaks of water on our roads. One key point is that due to the removal of the huge chunky combustion engines, fuel cell cars can be much smaller or much roomier inside. Lastly, Honda is planning to introduce the Home Energy Station, which is a home energy station that supplies fuel cell electricity to both vehicles and home.

Economically, I think this is great news, due to the fact that we're using up fossil fuels quite rapidly. Gasoline, in my opinion, is very much an inelastic product right now, as 99.9% of cars use it. However, the supply is going lower and lower each month, thus jacking up the prices very quick. If it was plotted into a supply and demand curve, you will see that prices will keep on rising as supply decrease and demand increase. This is why companies like Honda are pushing research on new technologies and alternatives. If more innovative ideas like fuel cell come up in the future, gas would change from an inelastic product to a more elastic product. This means, the demand and quantity exchange of gas would change dramatically in any change in price.

Another important point is that switching to fuel cell would solve a lot of energy problems. Because of the abundance of hydrogen and oxygen in our atmosphere, its supply is almost infinite. Not to mention how clean our air would become with the reduction of greenhouse gases. According to the article, the Home Energy Station would cut energy costs by as much as 50%. It means BC Hydro no longer have to disrupt the ecosystems of rivers with their hydroelectric power stations. It is a big step forward towards a cleaner environment.

On the other hand, the changing of technology could effect the economy of a lot of countries that depend on the export of fossil fuels, especially those in the middle east. This change would hurt both the market of fossil fuels, and the market of conventional automobiles. Eventually, if fuel cell prevails, the demand for nowadays cars and oil will go down, and their quantity exchange will join them. Furthermore, manufacturers will continue to shift the supply curve to the left and make room for FCVs until gasoline cars no longer exist. It will be like betamax all over again...

As I have said before in my other blog, technologies like these deserve our support as they would greatly decrease the effects of our pollution on the environment. Global warming is a growing threat towards society and it would be until something is done to reverse the damages. You know... like The Day After Tomorrow. Do you really want to migrate to Mexico?