Friday, July 18, 2008
Windy
For conservatives and free-marketeers generally, the great lurking question within the climate change has long been this:
Are we debating one specific environmental hazard?
Or is "climate change" a new rationalization for fastening on the US a program of government economic controls that would never otherwise be accepted?
Al Gore's speech yesterday will rightly feed suspicions that the latter is true.
The tone and message of the speech are all command-and-control and utter disregard of market mechanisms.
Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses.
And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America.
And there's enough soil in Nebraska to grow the entire world's supply of pineapples. The issue as ever is price and opportunity cost - and that's an issue to which Gore shows himself entirely indifferent.
[T]e sharp cost reductions now beginning to take place in solar, wind, and geothermal power - coupled with the recent dramatic price increases for oil and coal - have radically changed the economics of energy.
Emphasize the word "beginning." It remains true that electricity from solar, wind, and geothermal costs at least twice as much as nuclear-generated electricity. Yet nuclear, far and away the most economical option for reducing carbon emissions gets not a mention in Gore's speech. Much of environmentalism is a game of bait and switch: we're sold a specific problem (climate change) - and then offered not a response to that problem, but an entire alternative way of life that the environmentalists never explicitly defend because they rightly fear that it would not pass muster if defended on the merits.
When demand for oil and coal increases, their price goes up. When demand for solar cells increases, the price often comes down.
When we send money to foreign countries to buy nearly 70 percent of the oil we use every day, they build new skyscrapers and we lose jobs. When we spend that money building solar arrays and windmills, we build competitive industries and gain jobs here at home.
Lurking behind those two paragraphs is a massive program of command substitution, subsidies, and utterly hypothetical cost reductions.
We could further increase the value and efficiency of a Unified National Grid by helping our struggling auto giants switch to the manufacture of plug-in electric cars. An electric vehicle fleet would sharply reduce the cost of driving a car, reduce pollution, and increase the flexibility of our electricity grid.
More subsidies, more commands. Maybe plug-in cars are the answer. Maybe they are not - maybe the answer is steady incremental improvements in existing car design. I don't know. Neither does Gore. If the price of oil stays high, markets will spontaneously work their way toward the most cost-effective answer. I'm with Gore on the carbon tax. A carbon tax would create a new economic reality within which markets could operate by market logic. But here he goes far beyond markets to advocate central economic planning for energy production and energy consumption, ie, everything.
This is offered as new thinking. In reality, it's an old and costly error dressed this time in new green clothes.
07/18 07:27 AM
