Posted in Environment by Steven Hayward
...and fortunately there's an endless supply of non-renewable energy sources to be had, so all is well!
God bless fossil fuels.
Ohio Voter: The point is not that "all is well," but rather that the energy problem is not so simplistic as many liberals (strongly) suggest. It would do us good to acknowledge the difficulties and sacrifices entailed in a large-scale energy switch -- if we are going to endure one.
Fossil fuels are not sacred, nor is the use of them a "conservative position." The conservative position centers around, as it should, sustainability -- as Hayward says. We know that we can't stay on fossil fuels forever, and no serious person is suggesting that we do. However, prudence must guide policy. Duh.
I suspect the utility of an employer-based system is that the body of employees of a given firm make viable actuarial pools. They contain few who are elderly, disabled, or chronically ill and the factors of self-selection which bring them together are not strongly correlated with the state of their health.
The problem you get with having voluntary associations vend insurance (the Knights of Columbus has been offered as a possibility) is that you run the risk of corrupting the institutional mission of the organization by leaving it laden with a mass of people who joined only for the insurance (Aside from the fact that the pools are self selected).
I think if you are concerned that market pricing errs in the inter-temporal rationing of fuels, you might advocate phasing in a supplementary tax on petroleum. That would constrain consumption, promote substitution of alternatives, and have knock-on effects on R & D expenditures. Might work more reliably than having a public agency allocating investment capital and attempting to pick winners. You do not have to finance it through public sector borrowing, either.
Well, I'm on record in detail about the superiority of a straight carbon tax to cap and trade or other centralized schemes (see: http://www.aei.org/outlook/26286), but keep in mind that Europe has had very high energy taxes for decades now. So if a "price on carbon" is all that is needed to stimulate an energy revolution, Europe should be awash in alternative fuels and renewable energy. They aren't. What alternative energy they have (such as Germany's ludicrous solar power sector) has required huge direct subsidies (in Germany, up to 45 cents a kilowatt hour for solar) rather than just a higher fossil fuel price. Even a higher fossil fuel price can't "level the playing field" unless the price is set so high that no even Europeans are willing to go there.
1. I am not sure there is a good theoretical answer to what would be an optimal excise. The answer could conceivably be higher than there set.
2. The governments of France and Belgium have invested quite heavily in nuclear energy. Are their administered constraints on alternatives and is the price subsidiized? It may be that renewable energy is rendered uneconomic by subventions in other subsectors.
3. Technology is dynamic. When I last had to do some study in resource economics, there had been an enormous decline in the cost of producing wind power over the previous twenty years.
4. Prices (of fossil fuels) are dynamic as well, as the events of the last 3 years should have taught us as well.
5. Geographical and environmental factors affect what is economical. Europe has no desert and (proportionately) not nearly as much steppeland as is the case in North America. Both will affect the economy of solar and wind power.
All great questions. Number 2: Greens don't consider nuclear to be "renewable" energy; in fact, Germany's mad dash to solar was something the Green Party insisted on as part of the effort to phase out of nuclear power entirely--a decision that is gradually being reversed. Yes, France and Belgium both subsidize nuclear power to a large extent; like here, it is expensive electricity (but not as expensive as wind and solar). 3. The cost of wind power technology has fallen, but is still a lot higher than conventional power because its intermittency means that backup generation power (usually gas) has to be on standby to assure grid reliability. In practice this means you have to install about 3x the amount of generating capacity to assure 1x amount of reliable electricity. And without the subsidies and tax credits, almost no one would buy new wind power installations these days. 4. The natural gas price range probably stabilized with the huge discovery of unconventional gas (it was more volatile than oil from 1995-2005); oil at $90 to 110 a barrel would make our trillion barrels of shale profitably recoverable, which probably sets a long-term upper bound on oil prices for an intermediate term.
While driving down the beautiful California coast line on Highway 1 from Half Moon Bay to Capitola on Friday and looking at the homes built on the edge of the sea cliffs along that route, I asked my 16 year old son which one of the owners of the houses will allow Wind Turbines to be built in the ocean in front of their ocean view. His answer. Not one. If you think there is a limit to fossil fuels wait until you see the limit of renewable energy. Especially the limit that AGored would have on his $9 million ocean front property view in Southern California. Liberalism is a mental illness.
Is it happens, Cowgirl, I;m about 100 miles south of you on Highway 1, where the great local controversy is ferocious NIMBY opposition to putting up a new cell tower--*even if it is disguised to look like a native tree*, and even though the community badly needs expanded cell service. I can only imagine how crazy people would be over the proposal to put up windmills. Come to think of it, I shall start proposing this.
Please keep me up to date on your proposal. Pictures of the renewable energy crowd losing it when their front yards are picked for the "renewable energy " wind turbine farms will be priceless.
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