|
The False Promise of Green Energy - Video Dailymotiondailymotion.com2011년 4월 25일 - 89분 Purchase BookRenewable energies such as wind, solar, and biomass, along with energy-efficiency ... |
By Andrew P. Morriss, William T. Bogart, Roger E. Meiners, Andrew D. Dorchak
“This new work [289 pages] offers an outstanding, nearly unprecedented evaluation of claims by green energy and green jobs proponents that we can improve the economy and the environment, almost risk free, by spending billions of dollars on what are ultimately false promises.”
Energy affects everything we do. The late Julian Simon coined the term “the master resource” to describe energy’s crucial role in our economy. Nearly half of energy we use is used indirectly in the production of food, medicines, and consumer goods.
This is important because anything that increases the price of energy will also increase the prices of goods that use energy indirectly. Thus, if energy costs were to increase because of forced use of more expensive renewable energy, not only would the price of electricity rise, but so would the price of food, medicines, and consumer goods, such as cotton t-shirts. Those price increases would disproportionately affect the poorest.
The False Promise of Green Energy looks at the realities of energy production and use in the United States and the rest of the world versus the promises of green jobs’ advocates. The data in our book strongly suggests that green-job proponents have been peddling an unrealistic vision of energy production and use and are suggesting measures that will require either dramatically increasing the cost of energy or significantly cutting its use.
Either and both would reduce living standards. The impacts globally would be even worse, as increasing energy use generally, and increasing use of electricity in particular, is an important way to improve the quality of life for people in developing economies.
Picking Losers
The best way to encourage development of new technologies is not for the government to select some favored ones and subsidize them. Governments love to do this, because it allows politicians to hand out money to special interests.
Remember the Synfuels Corporation? Congress and President Jimmy Carter wanted to spend $100 billion (which a sum back then!) to synthetically produce liquid fuels from coal to replace oil. The project was unsuccessful, and President Ronald Reagan pulled the plug shortly after taking office.
Instead of letting Congress choose the next technology, we should leave that to market competition. When governments choose technologies, they often fail for three reasons.
First, government decision makers are insulated from market signals. Without having to respond to price changes, decision makers can’t learn the important lessons about how they work.
Second, the public resources governments make available are so addictive that firms reorient themselves away from producing to meet market demand toward pleasing the government decision makers who allocate funds. Every dollar spent on campaign contributions is unproductive of energy. But because those dollars yield reliable results of more subsidies and special treatment, while money invested in technology is risky, firms rationally invest in lobbying instead of R&D.
Third, government decision makers own only those successes (and failures) that happen between now and the next election. Worrying about the economics of solar power in 2030 is well past the time horizon of anyone in government today. No one in office now is likely to be held responsible for their decisions today 15 years from now when the results are in and the bill comes due.
Markets, on the other hand, price in the future. If a company is making a big bet on solar technology, its stock price will reflect that. If solar seems like a good bet, the stock price will rise. If not, it will fall. Today’s executives can be held accountable for that decision.
Wasted Money, Bad Energy
The costs of the green energy programs proposed by the interest groups described in The False Promise of Green Energy are staggering. The federal government committed $62 billion in direct spending and $20 billion in tax incentives to green jobs programs as part of the 2009 stimulus bill. And keep in mind that this money is all borrowed and must be repaid with interest.
Worse, the price tag is open ended. Even the proponents are reluctant to give firm cost estimates since one can, of course, add or subtract pieces of a program that can encompass many things. For example, the premier report from the United Nations that endorses massive moves to “green energy” as we abandon coal, natural gas, oil, and nuclear energy admits: “No one knows how much a full-fledged green transition will cost, but needed investment will likely be in the hundreds of billions, and possibly trillions, of dollars. It is still not clear at this point where such high volumes of investment capital will come from, or how it can be generated in a relatively short period of time.”
The scale of social and economic change that could be imposed is immense. To take just one example, the worldwide production of cement in 2007 was 2.77 billion metric tons. Cement is ubiquitous in modern society. Yet, as the UN report admits, the “cement industry will only become sustainable if the building industry finds completely new ways to create and use cement or eventually figures out how to replace it altogether.”
Green energy advocates propose equally dramatic shifts in energy production technologies, building practices, and transportation. These calls for dramatic changes in every aspect of modern life are wrapped in a bright, shiny package in the green jobs literature, promising not only a revolution in our relationship with the environment but to employ millions in high paying, satisfying jobs. Despite the new green packaging, these calls for creating a new society through central planning are as old as human history.
The failure of the twentieth century’s utopian experiments suggests caution in undertaking such widespread transformations of society. The master resource requires a free market path, not a road to serfdom.
———————
Andrew P. Morriss is the D. Paul Jones Jr. and Charlene Jones Chairholder in Law and a professor of business at the University of Alabama.
William T. Bogart is president of Maryville College and previously served as a member of the economics faculty at Case Western Reserve University.
Roger E. Meiners is the Goolsby Distinguished Professor of Economics and Law at the University of Texas at Arlington.
Andrew D. Dorchak is head of reference at the Case Western University School of Law’s Judge Ben C. Green Law Library.
http://www.masterresource.org/2011/02/false-promise-green-energy-cato/
The False Promise of Green Energy
Book Title: | The False Promise of Green Energy | ||
Author: | Roger E. Meiners, Andrew Morriss, William T. Bogart, Andrew Dorchak | ||
Published: | February 16, 2011 | ||
Price: | $16.14 (Hardcover) | ||
Pages: | 224 | ||
Reviewer: | Pierre Desrochers | ||
Affiliation: | University of Toronto | ||
This book review appeared in the Spring 2012 issue of The Independent Review |
One of the main ways by which the Obama administration was to heal the planet, cool down the climate, and lower rising sea levels while increasing America’s energy independence, reducing its carbon footprint, and dragging it out of the economic recession was through the creation of millions of well-paid, abundant, stable, unionized (with full benefits), healthy, environmentally beneficial, and geographically dispersed “green jobs.” After all, as visionaries ranging from Anthony Van Jones to the staffers of the United Nations Environment Program have long argued, nature offers us renewable energy in abundance because the sun shines, the wind blows, the tides roll, and we live on a molten rock. Only private-sector greed, stupidity, inertia, and vested interest in old-fashioned ways blocked our road to ecotopia. From Germany and Spain to California and Texas, “constructive government partnerships” fortunately channeled much green (typically a few hundred thousand dollars per job “created or saved”) toward green-job proposals. True, minor hurdles such as overturning the laws of physics and economics needed to be overcome, but what could environmental pioneers and elected officials fail to accomplish with access to other people’s money?
Try as they might, however, none of these pioneers succeeded in converting the Green Job Kool-Aid into an affordable, convenient, and reliable energy drink, and the government’s “green venture capitalists” failed to discover profitable free-range, grass-fed unicorn producers. As has been obvious since coal-powered steam engines displaced windmills, a modern economy cannot be built on a foundation of countless little distant, costly, intermittent, unreliable, and low-density power sources. Among other problems, even in some allegedly desirable locations the sun shines and the wind blows only about 10 percent of the time. Wind might be free, but the construction, installation, and maintenance of wind turbines are not. Locations with abundant (yet far from being sufficient or reliable) wind are often frequented by charismatic migratory birds (who are there for the free ride) and far from urban markets, thus mandating both massive increases in transmission and production capacity because the longer electricity travels, the more of it is lost along the way. Giant batteries to store the power produced when it is not needed do not exist, so additional back-up fossil-fueled or hydropowered generation that can be ramped up or shut down quickly also needs to be built or called on. Biofuel crops, for their part, typically require more power to produce than they deliver, cannot be transported through pipelines, and often damage engines designed with fossil fuels in mind. As if all this were not enough, manufacturing the mechanical components of a green economy turned out to be cheaper in places such as coal-powered China, and the recent development of shale gas is proving to be a game changer of historic proportion in energy markets (and is thus fought energetically by anyone with a vested interested in wind, solar, and biomass power generation).
Because of such unavoidable realities, in all jurisdictions where substantial amounts of public money were spent to increase wind, biomass, and solar capacity, energy bills have soared, “fuel poverty” has become a permanent fixture of policy debates, and green jobs are increasingly acknowledged to be unsustainable con jobs that will vanish as soon as the bad political power trips that led to their creation come to an end.
As the backlash against green snake-oil peddlers mounts, so does the number of intelligent critical discussions of the topic. Among the latest in this genre is a work by the economists and legal scholars Andrew Morriss, William Bogart, Roger Meiners, and Andrew Dorchak, The False Promise of Green Energy. These authors provide an accessible and sufficiently comprehensive survey of the perennial technical problems and uneconomic character of solar- and wind-power generation, biomass-derived fuels, battery-powered cars, and rail mass transit, and they mince no words in describing what can be seen when they lift the green veil under which special interests—corporations, politicians, and environmentalists—have long concealed themselves while securing taxpayer-funded subsidies. They also document how, long before self-described “green visions” came along, market incentives were spontaneously fostering the development of the ever more efficient use of costly inputs in all economic sectors so that very few green bills were left lying on the energy sidewalk in the first place.
The book’s real value, however, lies in the authors’ application of basic political economy concepts to their subject—from opportunity costs and rent seeking to the Bootlegger-and-Baptist framework and the inherent opposition between the maximization of human welfare and the creation of artificial jobs through government fiat. Like other economists before them, they observe that pouring taxed and borrowed money into green-job schemes destroys more jobs than it creates. To their credit, they are blunter than most critics. My favorite one-liners from the book are: “[O]ne man’s (bio)fuel is some child’s meal” (p. 68); “[S]elective technological optimism in the green jobs literature is so omnipresent that there is almost no bad news anywhere except related to fossil fuels” (p. 97); in the eyes of green visionaries, what makes a job truly “green” is the “inefficient use of labor within a production process” (p. 149); and green-energy proposals typically rely on “bad data used in poor quality models designed with flawed assumptions about economics producing unreliable analysis upon which unsupported recommendations are based” (p. 198). Indeed, the authors argue, the fact that the green-jobs literature “contains so many basic economic errors is not accidental but reveals that it is built on a thinly concealed hostility to market-ordered societies, a hostility that strongly influences its policy recommendations” (p. 124). Their unmistakable conclusion is that “green energy proponents have been peddling an unrealistic vision of energy production and use and are suggesting measures that will require either dramatically increasing the cost of energy or significantly cutting its use” (p. 6). Either of these requirements implies a drastic reduction in standards of living and, in light of currently available technologies, an insurmountable obstacle to the development of the economies in which the world’s poorest people live and work.
The False Promise of Green Energy is a welcome contribution to more sensible public discussions of energy policy. Although I would normally be suspicious of its capacity to reach a broad audience, perhaps the problems inherent to green jobs have become so visible on domestic energy bills that more people will now be willing to plow through such serious material. Indeed, the book was discussed on a local (Toronto) radio talk show and mentioned to me by some acquaintances at my local dog park while I was preparing this review! Readers of this journal would be well advised to emulate my neighbors and familiarize themselves with this material.
http://www.independent.org/publications/tir/article.asp?a=876
|