Over the past few years there has been an obvious rise in talk of going “green:” environmental awareness, reducing carbon footprints, sustainability, conserving energy and looking for alternative energy sources. And this week has been a great one for such talk.
The first article I noticed this week was an op-ed piece in the New York Times by the notorious Al Gore. After a brief lecture on the climate crisis, he arrives at his point: We can solve the climate crisis, economic crisis and energy security crisis in “exactly the same steps.” The basic logic here is that through “large and rapid investments in a jobs-intensive infrastructure initiative” we can begin to save the planet, save our economy, and reduce our dependence on foreign oil. He then lays out 5 steps we should take to carryout his plan. One of the more aggressive points is a “unified national smart grid” of power lines placed underground that we will all connect our electric cars to, effectively sharing energy amongst all. How utopian. It might be significant to note that Al Gore has refused Obama’s offer to become the next “Climate Czar.”
The next article I found was from The Economist warning of a “Global Green New Deal” that would be shoved down our throats by Obama and the Democrats. They explain that massive government spending and subsidies are the wrong way to go green, citing the ethanol subsidies in America that caused a misallocation of investment (creating a boom-bust and driving up food prices) and solar subsidies in Germany “one of the world’s most sunless countries.” Yet, despite these warnings, The Economist grants that there is a “case for giving the economy a boost through government spending.” Further, they congratulate Obama for planning to introduce a cap-and-trade system on carbon emissions.
Then, I noticed an article on the Huffington Post by Tom Friedman arguing that we need an “overwhelming force” to bring us into the green revolution. And that “the Cheney line – let’s let the market work” will not work because we have too many “legacy subsidies and tax incentives for dirty fossil fuels. The whole thing is totally skewed. This market has been gamed from the beginning. If we’re going to game the market let’s at least game it so that clean fuels are on an equal footing with the dirty fuels.”
Then, you have the T. Boone Pickens approach, whose California proposition 10 was rejected probably based on the large increases in public debt. Pickens’ approach is basically to use hybrid-electric cars, natural gas (which we produce here in the USA) in large trucks, and we populate the plains from west Texas to North Dakota with windmills to generate our electricity.
It should also be noted that both Friedman and Pickens have appeared in several interviews with a variety of media, including (ahem, Scott) The Daily Show with Jon Stewart this week, discussing these very ideas. And these recent discussions are only the beginning. A simple google search of “green economy” or “green jobs” reveals the iceberg of information beneath. Other outlets such as Wired magazine have been promoting green everything for a while now. A search of perpetual motion machines will result all sorts of gadgets and miracle contraptions. The public interest is certainly out there.
The really interesting take-away from all this is that even though some of these ideas seem diametrically opposed, they all come from the same premise: We can reduce our dependence on foreign oil, save the environment and our economy all with the same steps, as Al Gore says. And more importantly, saving the planet does not imply killing our economy. Berry foraging in hemp loincloths in the mountains is not part of the deal anymore. The hippies have lost, it seems (and I was so looking forward to wearing my new hemp loincloth).
So, it seems that the crux of the argument comes down to the old government intervention vs. market forces. When phrased like that it sounds like a no-brainer: let the market work. However, I think there is something to be said about reversing the momentum behind “Big Oil.” The reality is that there is a huge infrastructural competitive advantage behind oil and huge governmental preference for oil thanks to lobbying. What’s the scenery like on the drive down I-10 from Houston to Beaumont? How many natural gas or bio-diesel filling stations have you seen lately in your area? Does your car even run on natural gas or bio-diesel? Can you convert your car? How much more does a hybrid cost compared to a gasoline version of the same car? In my area the answer is none of the above, but I can drive a quarter mile and find 10 gas stations. How will the market ever reverse that? Is the government the only whale in the sea that can cause a big enough wave to get all these little fish swimming in the right direction?
I can also see argument for investing in the kind of concrete that Scott mentioned in one of his posts. Instead of investing in unnecessary strip malls, we should invest in things that are profitable and create real jobs (not to mention cool jobs like windmill technicians and solar roofing experts). Could we also reverse our trade imbalances by becoming the world leader in green technology? I can also see the very serious danger in the government trying to prop up technologies that are doomed to fail just because they are deemed “green.”
So, I will leave the discussion here. As I alluded, I think this is a great way to visualize the lassaiz-faire vs. government intervention argument? Is it best to leave it to the market to decide? Or is our market so un-free that we NEED the government to intervene? Does the oil industry have such a ferocious grip on our economy that we need something equally huge to stop it?I hope that my fellow bloggers will help me out on this issue, and I’m pretty sure they will.