Another left-coast leftist apostle of Al Gore is having his day of fame. Henry Waxman and ilk will command physics and economics to accomplish impossible goals. Americans will pay the price while China et al laugh all the way to the bank.
Cap-and-trade theologians love to invoke markets: Merely put a price on carbon, they say, and the invisible hand will shoo us toward an eco-friendly future. Of course Congress has its own ideas.
Take the climate bill just offered by House powers Henry Waxman of California and Ed Markey of Massachusetts. The 648-page “discussion draft” ducks the most important policy questions about what Democrat Ben Cardin calls “the most significant revenue-generating proposal of our time” — namely, how the tax will be levied and the proceeds spent. But it does find space to impose thousands of new environmental regulations on the entire economy, all separate from cap and trade.
Right off, the bill mandates that 25% of U.S. electricity come from wind, solar, geothermal or biomass by 2025. Sorry, nuclear doesn’t count. This kind of renewable portfolio standard directly contradicts the putative flexibility of cap and trade, which is supposed to allow businesses to reduce CO2 how and where it is least expensive. But Democrats aren’t about to let the details of their own policies stand in the way of magical thinking.
Despite political favoritism and billions in subsidies, wind still only accounts for about 1% of U.S. net electric generation, and solar all of one-hundredth of 1%. So now the liberal solution is simply to force people to buy them, a la the ethanol mandate. Yet it will be difficult for renewables to ever reach 25%, given their inherent limitations (intermittency) and, ironically, green opposition (no new power lines). That won’t stop Congress from punishing utilities that fail to meet an impossible goal.
via Henry Waxman’s Climate Bill Imposes Environmental Regulations on the Entire Economy – WSJ.com.
Our upcoming discussions of the science of alternative energy will necessarily encompass economics.
Tom Motherway, tom@renohayek.com