Politics & Policy

Economics in Reverse

Making energy so expensive that you will become carbon-free.

In order to decrease carbon emissions by 33 percent, we would have to remove every existing car and truck from the road (yes, that includes your hybrid), ground every airplane, and shut down every gas station in the United States. In order to bump up from there to a 73-percent decrease in emissions, we would have to shut down most of our electrical grid, with the exception of areas supplied only by nuclear plants, windmills, and dams.

No computers, no lights, no cars, no air conditioning. We’ve entered the third world already, and we’re still not anywhere near the 90-percent reductions that some respected climate scientists say we need immediately in order to save the planet.

So why is it considered anything but a big joke when former Vice President Al Gore asks millions to pledge “to demand that my country join an international treaty within the next 2 years that cuts global warming pollution by 90% in developed countries and by more than half worldwide in time for the next generation to inherit a healthy earth”?

Instead of the appropriate laughter, we hear ecstatic plaudits from news reporters, evidently too busy copying press releases about Gore’s Live Earth concerts to look anything up. Last week, Gore must have become the first man in history to receive the epithets “Eco-crusader” and “Environmental Guru” in a single mainstream-news article. These adjectives were applied uncritically by the Agence France-Presse, considered by some people to be a serious news source.

Green Hail Mary

Short of killing everyone, there is nothing the U.S. government can do to bring anything close to 90-percent carbon-emissions reductions within a generation. And as long as political opposition remains against nuclear- and hydroelectric-power generation, there is exactly one realistic way to reduce carbon emissions significantly: An inventor will find an economically viable way of producing and distributing all the electricity we need, carbon-free.

This is, to some degree, the Bush administration’s approach — to subsidize or at least wait for such a discovery. The New York Times derided this last August 5 as the “Hail Mary” solution, but it is also the only solution, short of economic collapse, that can achieve anything like 90-percent carbon reductions.

Historically, carbon emissions in the United States decline only in years of economic hardship, and even then only slightly. The last two such years were 2001, when the stock market underwent a major correction and New York City was paralyzed by a terrorist attack, and 1991, another recession year (see figure one). Even with the economic pain we suffered in those years, the nation reduced carbon emissions by just above or below one percent, and in both cases the tiny reductions were more than made up for by increases in the following year or two. As a rule, we emit less when have less, produce less, and employ fewer people. And as our population and economy grow, so does our demand for energy.

In the future, someone will make a lot of money by coming up with a practical and cheap alternative fuel. This will happen when a new source of energy becomes cheaper than what we have right now. In the meantime, incremental measures such as forced ethanol use, government-efficiency standards, and carbon caps have a completely negligible effect on carbon emissions. They do have the effect, however, of causing pain for consumers. The caps will drive up everyone’s electrical bill, as well as the cost of everything that it requires energy to produce or deliver. Meanwhile, new government standards are already making electrical appliances unaffordable and worse in quality, and they will only continue to do so.

Then again, perhaps the whole idea is to cause pain. That is the only way to interpret Senate Environment and Public Works Chairwoman Barbara Boxer’s statement to a conference call of reporters on Friday. Boxer has proposed a bill with goals not unlike Gore’s — to require an 80-percent carbon-emissions reduction by 2050.

“I’ve been in these conversations with this administration, and their claim is that technology can solve this problem (global warming) without controls on carbon emissions,” said Boxer. “But everyone has told us, including business leaders, that to drive the investment in these technologies that are going to solve our global-warming challenge, we need to have clear limits on carbon pollution.”

We normally think of higher prices as a byproduct of well-meaning-but-misguided environmental policy, but this is just the opposite. Boxer is arguing that we must make carbon-based energy artificially expensive now, in order to drive an artificial demand for competing environmentally friendly technologies.

The reasoning is that certain business leaders are unwilling to invest in discovering viable alternative technologies because they don’t want to shoulder the risk. Therefore, rather than be surpassed by speculators in a free market, they go to Boxer and others in government to drive up the price of carbon-based energy for all of us, in order to make it less competitive. Other winners include certain companies — such as DuPont — that are holding millions in carbon credits that will suddenly become very valuable if the U.S. government gets involved in a cap-and-trade scheme.

The only ones to lose out in this arrangement are people who use electricity or gasoline, or have to buy consumer products like cars and appliances. Keep that in mind the next time you hear a Democratic politician invoke the image of a single mother who can’t afford to pay her health-care bills.

 – David Freddoso is a political reporter for Evans and Novak Inside Report.


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