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October 02, 2007

Gotta Have The Cap!

I highly recommend Dave Roberts' comments on Nordhaus and Shellinger's critique of the environmental movement. I'm not so deeply immersed in that world as to have a particularly sophisticated take on all this, but I'm pleased to see that I agree with Roberts, and as such, feel much safer about my opinion.

In short, N&S argue that the environmental movement is too pessimistic, and too focused on solutions that require pain, like a carbon tax. What we need is more happy talk, and more public investment in disruptive -- which is to say, visionary -- energy research. In its weak form, this argument is right, but banal. Indeed, we're already getting a lot of that talk about the green economy, and the Apollo Alliance, and all the rest. In its strong form, it's wrong and dangerous. Public investment is great. But if you offer folks the easy, but insufficient, solution, and stop talking about the harder, but more necessary, steps, what you'll get is the easy, painless solution. And not only is a well-conducted public investment program likely to prove insufficient, but it's not likely to exist at all. Roberts explains:

In practice, "alternative energy" subsidies have overwhelmingly gone to things like corn ethanol, nuclear energy, "clean coal," and hydrogen; the way things are going we can expect liquid coal to hop on the bandwagon as well.

Those are not the investments I'd make, but I don't get to decide. Neither does Greenpeace or NRDC; neither do S&N. Congress decides, and Congress is heavily subject to the very power dynamics that have kept fossil fuels on top for so long. Perhaps green groups know this, and know that a massive push for public investment would likely be co-opted in ways that do more harm than good. Even a Congress acting in good faith is unlikely to prove particularly adept at selecting the technologies that will "break through."

Targeted subsidies are simply too easily converted into pork. It's one of those times when government failure likely exceeds market failure. And, in any case, you're going to get them one way or the other. But in the context of a larger bill, they can play an important role, becoming the pork which'll help grease a cap-and-trade plan so it can slip through Congress. Enact the subsidies on their own and you'll get nothing -- neither a really good public investment program, nor a carbon limit. They need to be part of the overall bill. But at the end of the day, everyone knows what the center of the policy agenda is, and you're not going to fool business into overlooking the carbon cap by talking about the subsidy program. Try, and you're liable to lose the cap, as business repurposes your rhetoric to argue that the subsidies are sufficient, and should be tried first.

October 2, 2007 in Energy | Permalink


I agree with all this, but let's not give up on convincing Congress to provide R&D funding to promising technologies, rather than to pork-projects.

Posted by: mk | Oct 2, 2007 4:42:36 PM

John Edwards has a very nice plan that caps carbon and uses fees paid for CO2 credits to fund green energy invesments. A balanced carrot and stick approach - you gotta have both.

Posted by: Robin Ozretich | Oct 2, 2007 6:16:34 PM

You can see this with people's choices. They only do what is easiest from the list of things that have any impact.


Posted by: Gore/Edwards 08 | Oct 2, 2007 6:27:41 PM

Anyone who argues we ought to forget about conservation and focus on new technological breakthroughs needs to explain his fallback plan if no breakthroughs materialize.

In general, though, Nordhaus and Shellinger strike me as carping pundits -- people who achieve notoriety by undercutting the big thrust the movement is making, playing on members' anxieties that they may be doing it wrong. It seems especially stupid to be arguing at this moment that the US's environmental movement is pursuing the wrong strategies -- at a moment when environmental concern has staged a stunning and abrupt reversal of its decline, and when measures which seemed out of the question 5 years ago (including a carbon tax) are suddenly on the table again. I would argue that in fact the environmental movement is doing a lot of things right, and that's why anyone is even willing to pay enough attention to a "counterintuitive" environmental argument like S&N's.

Posted by: brooksfoe | Oct 3, 2007 3:33:59 AM

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