Topic: Energy
In Defense of a "Green" Stimulus Federal government has few, but mighty, obligations laid out in the Constitution. Part of its duty to "provide for the general welfare" should be to assure energy security and long-term sustainability. A "green" stimulus can help make a lasting shift toward renewable energy and energy efficiency.by Justin
(libertarian)
Saturday, January 17, 2009
Federal government has spread its tentacles far too deeply into our society and economy, but there are some areas where government has a duty to encourage moves in certain directions. Federal action is justified when it is directed at security and long-term sustainability. Indeed, the Constitution directs our government to "provide for the general welfare," meaning to assure the well-being of the general populace. I believe at this juncture it is appropriate for our federal government to spend taxpayer money in the form of a "green" stimulus, to help transition our energy paradigm from one of inefficiency and fossil fuel dependence to one of energy efficiency and renewable energy. It is not enough to rely on market forces, especially considering the current turmoil.
A common charge against our government is that it "throws money" at things, with varying results. While this is often true, in some cases federal funding is beneficial. Consider funding of scientific research. Medical or drug research is motivated by industry profits, but there is little incentive in the market to understand our natural world. Understanding our natural world (physics, astronomy, biology, etc.) is beneficial to humankind and the environment which we depend on. While I am generally opposed to much of our military activity, it is well known that military research and development has given us many of our most valuable technologies such as the Global Positioning System. Market forces and business interests do not always provide the opportunity for society to advance, as short-term profits and stock portfolios are generally at odds with holistic sustainability. Business interests too often have a case of myopia and are not working in the interest of "the general welfare."
Considering the absence of long-term vision and sustainability in the business world, the federal government should embark on a massive initiative to "green" our society and economy. The current climate of economic uncertainty, job losses, and geopolitical unrest is a good time to prod this kind of change. We know that fossil fuels are finite. We depend on other parts of the world, including the tinderbox of the Middle East, to run our transportation economy, and we cannot come close to satisfying our demand by domestic production. Coal is plentiful but still finite, and current extraction by "mountaintop removal" literally lays waste to huge areas of pristine environment. We are aware of all the negative consequences of fossil fuel dependence, so it is foolish to continue the status quo. But waiting on the market to cause a lasting shift will not be sufficient. The price of oil skyrocketed in recent years, which did cause us to reduce consumption and look to better efficiency, but look how quickly the price of oil dropped in 2008. This volatility is not a reliable catalyst for fundamental change. The change to efficiency and renewable energy sources will take decades to complete, and we cannot be left scrambling for a fix down the road.
By making large investments in a paradigm of renewable energy produced at home, we can spur the creation of jobs while gradually reducing toxic pollution and land degradation. Imagine the confidence that will build in this nation when we are producing most of our own energy. Imagine not having to spend billions of dollars securing and protecting oil infrastructure around the world. In the U.S.A there is a strong sense of "rugged individualism" or self-reliance, yet as a nation we have steadily moved away from this. If the government is going to spend massive amounts of money, let it be in the effort to regain our self-reliance. Let's put people to work in developing and maintaining solar, wind, geothermal, biomass, wave and tidal energy.
The other side of this "green" coin is energy efficiency. In the realm of development and construction, the normal business model seems to favor the cheapest possible starting cost in terms of materials and design. This means that efficiency is not a primary concern, which translates into more energy use and higher operating costs. With government measures such as incentives, grants, and possible regulations we can bypass this unsustainable practice while increasing demand for materials and services that provide efficiency. This would reduce our energy consumption and possibly alleviate some of the pain of high, volatile fossil fuel prices during the transition. It would ideally become a trend and eventually the norm to do things this way. There are current incentives for efficiency, but a massive increase in this, along with President Obama using the bully pulpit to promote efficiency, would help to bring us out of our wasteful, unsustainable mode of energy consumption. From what I understand, part of Obama's "green" stimulus would be to make government buildings and operations much more efficient. This, along with current organizations promoting efficiency, would provide a model for future projects.
In essence, I am saying that federal government should provide a jolt in the direction of renewable energy and efficiency. The technology is there; it just needs help being delivered. Once this paradigm takes hold, business in renewables and efficiency will become self-sustaining. In the current economic meltdown we are doing some soul-searching, as the business giants of yesterday find themselves face down in the dirt. A rebirth is coming and it needs to be prodded in the direction of long-term sustainability and energy security.
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Posted By: Jake, the champion of the constitution
Date: 2009-01-18 02:04:39
Dear Justin -
Welcome to the Chart! I was looking forward to this since you replied in one of my last pieces. Without having read this, I've actually unknowingly wrote a rebuttal to this, and it should appear next week at the Chart. Let me also add that with all the talk about Obama's upcoming term and job creation schemes, and the lassitude of the last 30 years in doing anything of substance to cut foreign oil dependence, I agree this is a worthy debate topic.
Well, where we agree is that green energy is great, foreign dependence is bad, but this is probably pretty common. Where I stray a little bit is to what extent we should go to not harvest the earth's resources. One popular topic with Palin last year was drilling in Alaska - since the choice to me is American soldiers' lives or some Alaskan wilderness, I choose our soldiers.
I will leave you with a thought, and hopefully will remember to return and post a link to my rebuttal, which will elaborate the below som. You wrote:
"In essence, I am saying that federal government should provide a jolt in the direction of renewable energy and efficiency."
I think another way to translate this is to replace "federal government" with "taxpayers." Then the green industries really become "tax-eaters" which historically speaking does not have a high success rate.
Here's how I would phrase it:
""In essence, I am saying that investors should provide a jolt in the direction of renewable energy and efficiency."
Paradoxically to your proposal, this would come about only if citizens to save, and would definitely NOT occur through government spending. Now, you could say that in general Americans have very low savings, and you would be correct. What do you think?
Welcome to the Chart. I find your article well written and interesting though I respectfully take issue with some of your positions.
Demand for anything, created by government by taking from one and giving to another is not demand at all. Those jobs, products and services, with few exceptions, create no wealth and succeed only in corrupting the “market” encouraging further dependence upon more socialistic spending. Can we say “Bailout”?
If we look at, as examples, education and health care, we find the Federal government intruding into areas where it has “questionable” Constitutional authority. The result is that we have 2 service sectors, receiving 50% of their funding from the government, consuming around 40% of the largest GDP in the world, while relieving us of our freedoms and providing declining quality and availability of service.
It is obvious that we have already corrupted the energy sector through trillions of dollars of subsidies and “incentives” (including military services) while at the same time offsetting those perks with fines, taxes and penalties. It should be clear what the result of “more of the same” will be. Can we say “Bailout?”
We can also look at the ethanol debacle to get some direction of where we’re heading, I’ve posted three articles to Nolan Chart as follows:
The Futility of Ethanol http://www.nolanchart.com/article2817.html
I have several acquaintances that are investing in alternative energy for their residences because 1) they wish to be self-sufficient and 2) they will take advantage of tax incentives. I look at it a different way. I see thousands if not millions doing the same, running their meters backwards, forcing the utilities to purchase gobs of energy when they don’t need it, only to face shortages when they do. What has been accomplished?
When government embarks on a mission, I tend to evaluate the mission with 3 questions;
What is the problem or grievance?
What is the solution?
Who decides?
Usually answering these three questions (especially the 3rd one) muddies the water rather quickly. This may be why environmentalists and wildlife advocates have stalled millions (billions?) of dollars in green “investments” while they conduct a turf war.
In a nutshell, maybe we should “un-corrupt” a sector rather than adulterate it further.
"Where I stray a little bit is to what extent we should go to not harvest the earth's resources. One popular topic with Palin last year was drilling in Alaska - since the choice to me is American soldiers' lives or some Alaskan wilderness, I choose our soldiers."
A couple of years ago I ran the numbers on ANWR using data from the US Geological Survey and Dept. of Energy. Basically, when the ANWR field is ready to produce after ten years of development, it s daily production would only knock a few percentage points off the amount of oil we import (currently about 65%).
This is a tricky issue. I'm in favor or offshore drilling as impacts are much less, but I don't think any amount of domestic production would offset dependence on any Middle Eastern country.
"I think another way to translate this is to replace "federal government" with "taxpayers." Then the green industries really become "tax-eaters" which historically speaking does not have a high success rate."
I guess I didn't make clear in my article that the green stimulus should be temporary. Yes, for a time they would be tax-eaters but federal government should not permanently prop up any industry, as it has done for oil and coal for decades. Heck, maybe just ending all forms of assistance and special priveleges to the fossil fuel industry would be enough for a proper energy paradigm transition.
Regarding your contention that this should be done through investing.....that would be ideal (and it's happening to some degree) but Ithe current investment model seems to be obsessed with a succession of quick profits which does not jibe with the interest of long-term sustainability and energy security.
I think energy security is the issue that trumps all others and will ultimately decide our "general welfare.". In this regard I believe our government has a responsibility as I described in the article, instead of continuing global oil conquests and laying waste to mountain ranges.
Chuck, thanks for the response. You make some good points. However, I don't envision a green stimulus the same as the financial bailout or education and health care spending. The financial bailout appears to be an effort to prop up the status quo (large banks and financial SOP), while a green stimulus would be to CHANGE to the status quo. As I said above, energy security is the issue that trumps all others.....even (temporarily) wealth creation.
I agree that our government's record in the past decade on energy has been poor. It has coddled the fossil fuel industry (status quo) and is ripe with graft. I completely agree that recent efforts aimed at ethanol are ridiculous. It's a giveway to another behemoth that pervades our lives--the corn industry.
What I say in my article does assume that our federal government will work for the good of the populace. What's clear is that we will have to transition away from fossil fuels as well as use energy more efficiently. I argue that the federal government has a responsibility to foster this transition in the interest of making it less painful.
Posted By: Walt Thiessen
Date: 2009-01-19 09:29:08
With respect, I must disagree with your constitutional interpretation. The phrase ""provide for the general welfare" comes from the preamble of the Constitution. It does not come from the body of the document. Therefore, while it may be a general expression of intention, it is by no means a granting of power.
If we wrongfully accept the idea that the preamble empowers the government to "provide for the general welfare" then there can be no unconstitutional laws, because all laws can be justified as being intended for that purpose no matter how tyrannical they might be.
Walt, point taken. It's likely that the Constitution has no specific clause for assuring energy security and long-term sustainability. Jefferson also thought that it would take 300 generations to populate the the U.S.. It only took 3 generations. Point being, there are some things the founders did not and could not foresee. What are we supposed to do? I do not feel that we can just let "the market" fix everything.
We can do a lot by anulling the marriage of government and industry, erasing the ties that bind, ending tax breaks for fossil fuel, etc. We can also do a lot with a temporary infusion of funds to something we will eventually have to do, now or in years to come.
Posted By: Walt Thiessen
Date: 2009-01-19 10:49:48
Justin: To the contrary, the founders did anticipate the possibility that circumstances might arise they had never considered. They provided for that contingency by providing a perfectly good method for changing the Constitution. It's called the amendment process. See Article V. Any approach that intentionally ignores the amendment process is inherently disrespectful to the Constitution.
So, in your view, would a green stimulus in the form of incentives, grants, projects, etc. for efficiency and renewable energy be disrespectful to the Constitution? Is there currently nothing that provides a basis for energy security and sustainability? Seems to me like it's part of national security.
Posted By: Walt Thiessen
Date: 2009-01-19 12:16:46
Since you are trying to be respectful to the Constitution (and I commend you for that), let me answer this question two ways.
First, as far as the Federal government is concerned, where is the authority in the Constitution for the actions you describe? If you can cite such authority, then we can consider the specifics more carefully. Personally, I've found that more than 95% of the Federal government as it is currently configured violates its Constitutionally mandated privileges, but I'm sure we could debate that.
The second answer I'd give you is to ask you why this can't be handled on a state and local basis? Personally, I think the whole idea of a "green stimulus" is terribly misguided. I get sick to my stomach due to the bastardization of reason and logic that gets used to justify anthropormorphic global warming, etc. as a way to fight pollution. There's a much more direct solution, one which the greenies are unwilling to take because it doesn't get them as much Federal power to use to dominate the lives of others and surrepticiously steal their money from them in the name of doing good.
Sorry about the length of that last sentence. Anyway, to be specific, what I'm talking about is treating pollution as what it really is...a violation of some individuals's rights. Viewed that way, pollution, like blowing cigarette smoke in someone's face, becomes a personal assault rather than a vague "violation of the rights of society."
If people don't want to breathe sulphur dioxide, for example, treat it as the property violation that it is...the violation of one's body, of one's ability to breathe clean air.
Instead, what the greenies do is moronically buy into the idea that the only solution is to regulate the dumping of sulphur dioxide into the atmosphere. The net result is that sulphur emissions are reduced but not eliminated, and this crazy result happens at tremendous taxpayer expense.
The expense should actually be born by the owners of the polluting company. Some argue that they'll merely try to pass the costs along to the consumer, and that's true, that's what they'll try to do. But once you eliminate all the crazy regulations that are currently in place, you create an environment (no pun intended) where the market can actually encourage companies to find ways to cut costs where pollution stoppage is concerned, because it gives them greater profits compared to their competitors, thereby allowing them to lower their prices and grab a larger market share. In other words, a truly free market (as opposed to the highly regulated market we currently "enjoy") can truly do the job, provided that the government is truly doing its proper job...defending the rights of individuals.
I'm sure you have lots of thing to attend to, so the discussion is appreicated. I admit to not having looked for specific Consititutional authority to stimulate a transformation of our energy paradigm. However, since we will have to transform our energy paradigm eventually, and since it seems like a matter of national security, I assumed that federal government could take action to stimulate this. I suppose Constitutional authority is a matter of how loosely one interprets it (ideally verified by the judicial branch).
Regarding state and local levels, the more progressive ones are doing it already. But some energy infrastructure is on a national scale and federal government simply must be involved. A diversity of renewable energies should lead to decentralization as each area utilizes the resources best suited. It would save taxpayer money in the long run to make federal buildings energy efficient while providing an example. Like it or not, federal government is a bully pulpit. Like it or not, federal government has a vast amount of resources for this thing I'm talking about.
Regarding pollution, I'm of the opinion that clean air and clean water are public assets and government has an obligation to protect those public assets. The system is not perfect, but I don't think property rights is the answer.
Bet you're wondering how I ended up in the Libertarian camp. Environmental protection is one of the few areas where I feel government should be involved.
Posted By: Walt Thiessen
Date: 2009-01-19 16:24:38
Actually, the more progressive state and local governments are NOT dealing with the issue. They're regulating rather than dealing with property rights violations. That's why their costs are high and their results are mixed at best (and that evaluation is very generous).
The point isn't to have a bully pulpit. The point is to have positive results. Bully pulpits tend to produce negative, largely undesirable results, not positive results because their purpose is to bully. The results are usually far more expensive than they should be.
In my earlier reply, I was not comparing the green stimulus to a bailout.. My point rather, was that what we are seeing today as "bailouts" are the result of long term government intrusions that began innocently enough as "incentives" such as what you are calling the "green stimulus".
I submit that the mess in education and health care also began, many years ago, innocently enough as "incentives" and will certainly end as a "bailout" or socialization as has recently occured in the financial sector.
Posted By: Jake, the champion of the constitution
Date: 2009-01-20 05:04:19
Dear Justin -
After reading your defenses, I must say that we would have been in about 100% agreement about 2 years ago. In a way, in Pt 2 to the Browner article I wrote, we still are, its just we are going about it differently - check out what I wrote about Peace and the Environment here http://www.nolanchart.com/article5797.html
Here is the article I was referring to in my first response - actually the entire thing is a rebuttal of gov't stimuli in general, although I specifically mention green tech at one point.
Also, in the Hazlitt link in that article, what he has to say in chapters 15-17 on subsidies is heavily based on the teachings of Bastiat in "The Law", have you read this? Reading Walt's responses reminded me of it. Its in my bib. http://www.nolanchart.com/article5069.html
On the size of the ANWR reserves, I am not going to claim that this is authentic - I don't know - but its worth a listen and a read. If you can prove it false I would be interested, though I am tempted to go to Alaska myself. :)
http://www.reformation.org/energy-non-crisis.html
and google video search for "energy non crisis lindsey williams"
Hey have you read The End of Oil by Paul Roberts? Its a great read on alt techs.
I read your article on Peace and Environment, and would certainly take issue with some of your statements but the comments section is pretty full already. I'll just say this: it's unfortunate that the issue of climate change has to be subjected to the politics of government policy and all the vitriol and spin that goes with it.
I looked briefly at your link regarding the "Energy Non Crisis" and didn't find much that would be subject to disproving. It just seems like a persuasive writing book, not really an objective analysis of the facts.
I wrote the following in a discussion forum in 2003. Unless our consumption and/or importation has changed significantly, which I don't think is the case, this analysis would still hold today.
"USGS and DOE estimate a mean production capacity in ANWR of about 1.2 million barrels per day. This would satisfy 5.8% of a 20.5 million bpd demand for 25 years, which would lessen our yearly imports of oil from 65% (or 13.3 million bpd) to about 58-60% (11.9-12.36 million bpd). (assuming steady rates of demand and importation)"
I work in the oil industry doing regulatory/environmental consulting and still I don't think it's prudent to intrude on wildlife sanctuaries to chase every last drop of oil.
I've heard about "The End of Oil" but haven't read it. I did read a very informative book called "A Thousand Barrels a Second" which begins by taking you through this nation's history of energy use (beginning with whale oil) and the concept of "break point" where an energy source becomes too expensive to remain viable. Interesting and useful read written by a respected energy analyst.
Justin, not to put too fine a point on it, but the Government has a horrible record of doing anything right, as far as trying to do R&D, or guide technology a priori. Government sponsored "green initiatives" will be horrific dead ends, except for the people who enrich themselves with tax money thereby. Anybody remember the "backward bike" that D.O.T. sponsored in the '70s? Two years and a million bucks or so to make a rear-wheel-steered "safe motorcycle". Completely ignoring the fact that a motorcycle steered by the rear wheel is so divergently unstable as to be unrideable, as anybody that had actually ridden a motorcycle could have told them
Military R&D is done mostly by private enterprise, not the military. The military may write a request for some sort of technology, but it only goes so far as to specify the desired performance, not the design or technology to be used. I myself have read and responded to, (working for private enterprises), a good many of these specs, and won a few contracts in my time. This process utilizes the spur of competition in the private sector to the good of all.
NASA, on the other hand, has evolved so as to be it's own research activity, and has become a bureaucratic nightmare, spawning the likes of James Hansen, (the global warming alarmist).
Private initiative and investment will create "green energy" alternatives IF they show signs of being more cost-effective. So far, they aren't even close. Windmills and ethanol only exist because of subsidies, put in place to benefit favored Congressional "clients". There's very little if any "new tech" being created by these activities, either. Refinements to what was previously known, maybe, but no new concepts at all. (I'm a greasy-fingernail mechanical penguineer, and have followed these closely). Adding to these subsidies will do nothing but enrich these clients more. The energy density of wind and alcohol just cannot come close to competing with petroleum fuels.
I will refute myself by granting you that, if the reports coming out of the D.o.E. are correct, our Federally funded NUCLEAR labs may have worked out a reactor design that is totally encapsulated so as to be safe from any form of terrorist, and cheap enough and small enough that every town of 20,000 or more could have one or more, obviating the need for the "grid". THAT might be a step forward, and in THAT case I will applaud Government research. However, I've had enough to do with Livermore and Los Alamos to recognize that they are both subject to the key thing that drives private research, which is to say that they produce results, or starve. So I kinda consider them a special case, perhaps the exception that proves the rule.
hi justin, nice article. i might be nice if we actually charged say the oil and gas interests for using the public land. ten year leases at about two dollars an acre is not market value. royalty breaks and failures to collect are common place. if it is a market then lets get the taxpayer his due on that end instead of donating the rent to the corporations. if it is not a market, then we certainly need what you call for. we always seem to be dwelling on, let's not make the taxpayer subsidize this "new" industry, when we have been enriching the "old" industries forever. i am for a totally free market, if that isn't probable, then if a dollar spent by the taxpayer to the green issues is a dollar less to the oil corps, then i am for it. i don't see why we should "discount" the green and then ignore the billions of green money going to private industry, it doesn't pan out. i think the greenhouse bull is the same issue, should we protest regulations for co2 on the one hand and then ignore polluters on the other because it is a "business interest"? we need to have the same rules for all.
I know how the military accomplishes its R&D objectives. Private enterprise does the deed but the fact remains that billions of federal dollars make it happen.
I agree that government in many cases is inefficient and produces poor results. Space exploration should definitely be done by private enterprise as well, but I think the government desires control of space for weapons purposes. I disagree with your characterization of James Hansen.
Windmills and other renweble energy sources do not exist "only because" of subsidies, and constant refinement continues to bring the cost down toward the level of fossil fuels. Besides, if we incorporate the true cost of using fossil fuels (military protection, tax breaks, environmental and infrastructure damage, health effects) that alone might be enough to hit a "break point" that transitions us to renewables. I'm well aware of the energy per unit issue too.
Gene, thanks for the comment. I fully agree that we should transfer all special favors, tax breaks, etc. from fossil fuels to renewables. This should be a temporary measure with the end goal of a truly free market -- no propping up of any industry by government. While we're at it, let's not hide the true costs of using fossil fuels.
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