The Economist, a weekly newspaper, wrote an article entitled “Green,easy and wrong” – and I think it is preposterous. I realize I am taking a big stab here, and might well destroy any shred of credibility by coming out against such a well regarded publication. Yet, I’m surprised that the Economist came out so strongly, and frankly, inarticulately against what is a critical investment by the United States’ government.
Please read the article and come back to get my thoughts.
It is precisely because the United States has two huge problems – an economy that is sickly at best (doomed at worst) and an environmental (and energy) predicament that should be disconcerting if not alarming – that this country’s government should do everything in its power to align a pathway to success for both issues.
The article uses illogical and incomplete reasoning. Highlighting subsidy failures without recognizing that lessons have been learned in all cases is ridiculously myopic and self-serving (if the author feels that the United States and other energy importers should increasingly rely on a system that places energy exporters in a position of strength). Subsidies are stimulating, and our energy and capital intensive industries like telecommunications have always required governments’ balance sheets and legislation to justify enormous outlays. While there is always some slack and inefficiency there is no better way to develop technologies and stimulate economies of scale then by offering financial incentive.
It is equally ridiculous to assert that because “Green and Economic Prosperity” sounds very compelling that legitimate investors are going to get caught up in the hype and expose themselves to a get rich quick scheme that might well collapse. Investing the “green energy economy” will be expensive, trying and often times economically painful on the short term. Smart legislation and investment will address critical constraints by developing an infrastructure of grids, human capital (a workforce), and basic technologies that are needed for engineers, inventors and entrepreneurs to tap into. The entrepreneurs and investors that will succeed and avoid being burned by hype are those that recognize that this is an industry of “decades and billions” and that any corrections and investments made now will pay large dividends later.
Regarding government fiscal intervention here is the bottom line: Taxes are going to be necessary to wean polluting technologies off of the fallacy of the commons (Climate Change, Pollution, using unsustainable “solutions”), and subsidies, targets and standards are needed to stimulate the use of sustainable systems and technologies that have not yet matured enough to be cost competitive without transparency.
Libertarians… I understand your frustration, if you live off-grid, then more power to you, but you must remember that the rest of the country does not, and places like NYC and San Francisco will need continue to import energy from elsewhere for the foreseeable future.
I’m sure there are some Economist loving free market captialists (I feel a bit like Judas myself) ready to tear into me… lets hear it.