The threshold question we should all be asking is whether it is the government’s role to pick ‘winners and losers’ for the energy industry in America.
Take for example the slew of government subsidized businesses that have filed for bankruptcy. First it was Solyndra, then Beacon Power, and most recently, Abound Solar. Together, these businesses have spent over $639 million taxpayer dollars. The more the government tries to micro-manage, the worse it seems to get. To be fair, will 100% of businesses succeed? No of course not, but let’s face it; the government’s climate change policy resembles more of a natural disaster than a success story.
During President Obama first term, the stimulus package set aside over $50 billion for “green energy.” The Department of Energy has spent $26 billion on green jobs since 2009, which, according to the Institute for Energy Research, resulted in a whopping 2,308 jobs. At $11.25 million taxpayer dollars per job, that’s hardly a great return on investment.
According to IER, “Clearly, in terms of ‘bang for the buck,’ government programs that coddle renewable energy are losers. In terms of jobs, the losers are the American workers who would otherwise be gainfully employed but for the tremendous waste of taxpayer dollars on the administration’s obsession with ‘green energy.’”
The Solyndra debacle is an excellent example of failed government intervention. Solyndra demonstrates that the government doesn’t have the expertise to pick winning companies in the fast-moving alternative energy space, especially at the commercialization level.
Assuming the Obama administration is completely well intentioned, the efforts to combat carbon emissions must be analyzed from a 30,000-foot level. CO2 emissions are a worldwide issue, and a proactive approach requires a globalized response. Attempts to reduce carbon emissions by gutting U.S. manufacturing capabilities is not only unwise, it is akin to “unilateral disarmament.” Such moves, no-matter how well intentioned, weaken, not strengthen our economy because they have served only to reduce American’s ability to compete globally.
According to the EPA, China is the number one producer of CO2 emissions in the world. Largely unregulated, China shows no willingness to slow or reverse this trend whereas goods and products manufactured here at home are the product of stringent environmental regulations.
Consumers will ultimately decide what products they are willing to buy, and how much they’re willing to pay for it. When economists discuss “the market” or “private markets” they are simply alluding to “Consumer Choice.” If conservation efforts like home weatherization make economic sense by reducing a heating or air conditioning bill, then it will occur. If renewable energy can be produced cheaply and effectively, no doubt more people would choose it.
That’s not to say the federal government doesn’t have a role to play because it does. That role is actually essential. The federal government must provide a level playing field for all market participants. A role that encourages, not stifles, economic competition.
2008 Global CO2 Emissions from Fossil Fuel Combustion and some Industrial Processes (million metric tons of CO2)
Source: National CO2 Emissions from Fossil-Fuel Burning, Cement Manufacture, and Gas Flaring: 1751-2008.