Why a green-pork blowout would do more harm than good
Can something good come from a U.S. splurge of climate pork that, in itself, would have no discernible effect on global climate or atmospheric carbon dioxide?
A probable answer is no. It would actually end up making our putative carbon challenge worse.
But Paul Krugman and others say a carbon tax is politically impossible, and that we should settle for President Obama’s “second-best” approach. The problem with subsidies and mandates is that they create vested interests in inefficient renewable energy. Warren Buffett already is collecting millions for what he admits is hopelessly cost-ineffective solar energy in California. State mandates for renewables favor in-state providers, discouraging competition that would lower costs.
Lobbies that form around such favors are quietly unfriendly to interstate power lines that would force expensive local energy to compete with cheaper renewables elsewhere. In Germany, where vast subsidies flow to wind and solar, coal has become the fuel of choice for utilities struggling to provide backup power. Result: German carbon-dioxide output is growing not shrinking.
Most glaring is the renewable lobby’s opposition to fracking—never mind that fracking, by displacing coal, has done more to reduce carbon output than renewables have. As for cap-and-trade, check out the Senate testimony two weeks ago by Joseph Mason, of LSU and the Wharton School, on how easily such schemes have succumbed to fraud and corruption.
A straight-up, revenue-neutral carbon tax clearly is our first-best policy, rewarding an infinite and unpredictable variety of innovations by which humans would satisfy their energy needs while releasing less carbon into the atmosphere.
Failing that, our second-best policy might well be to do nothing, skip the green pork bonanza, and hope that new energy technologies emerge out of the already-ample natural incentives to do so. Why? One thing that can be safely predicted is that renewable energy that becomes addicted to subsidies in order to survive will not meaningfully replace fossil energy that remains cheaper in real terms.
Now the new entrants in the climate policy derby: Robert Rubin and Henry Paulson. Impressive is the fanfare greeting the former Treasury secretaries and their splashy, economically focused climate lobby, the “Risky Business Project.” Unfortunately, they trod a well-worn path by trying to scare the American people into compliance.
Their emphasis on “extreme weather” is an especially tired piece of foolishness. Whatever the human impact on climate, the overwhelming reason storms are becoming more destructive is the simple fact that more people and property stand in their way.
Their unnaturally specific forecasts of rising sea levels and heat waves are based on the same speculative climate models that do such a poor job of explaining even the present and recent past—and whose limits the report doesn’t even mention in a footnote. The principals clearly want their assertions about the future to be taken as facts, not as extrapolations from simulations whose credibility they are wholly unprepared to defend.
Their assertion that the U.S. can shame China and India into giving up carbon energy is no more plausible in their mouths than in anybody else’s. But Mr. Paulson’s policy heart is in the right place—a carbon tax. He has explicitly rejected the climate cronyism of the Krugman-Obama school.
Sadly he and the passel of worthies behind his group (including Michael Bloomberg and hedge-fund impresario Tom Steyer ) colossally fumble their 15 minutes by adopting the hectoring, frighten-the-public approach that Al Gore, Bill McKibben and James Hansen have so reliably demonstrated leads nowhere, produces no results and ultimately discredits the cause.