Other knol debates
Final Reply
Cato Embraces Humanity's Self-Destruction
Jerry Taylor asserts that if I don't respond in detail to each and every one of his points, then I must be conceding that point. Yes, it's a silly argument, since Jerry throws too much nonsense on the floor for anybody to clean up. But let's apply Jerry's argument to his "rebuttal."
Jerry refused to respond to my most important assertion that, if he won't spell out his greenhouse gas targets and timetables for achieving then, "he is embracing unrestricted greenhouse gas emissions, and those interested in avoiding catastrophic climate impacts will need to look elsewhere than Cato." Jerry and Cato offer the world no hope for averting the impacts that the world's top scientists spell out in their most recent multi-year synthesis of the latest scientific literature.
And so I can only assume that Jerry thinks the preferred path for the world is losing 70% or more of the world's species, widespread desertification, loss of the inland glaciers that provide water to a billion people, and significant, ever-accelerating, and irreversible sea level rise.
In general there is little point in debating with people hell-bent on denying the overwhelming scientific understanding and enormous body of observational evidence about the threat of catastrophic climate change.
The reason I press this central point is that only by accepting what science tells us can we understand how deeply and quickly we must reduce emissions. I (and others) have written very extensively on the subject of how a cap-and-trade system cannot jumpstart the transition to a different transportation system fast enough to save the planet (or to avert the consequences of peak oil) -- see here and here.
Jerry has tried to pretend that this debate is a narrowly about direct government subsidies for renewable energy. It is not. I have clearly stated that direct government subsidies for renewable energy are valuable to maintain and expand until a serious carbon price kicks in. So most of Jerry's arguments are aimed at a straw man that direct government subsidies for renewable energy are needed after we get greenhouse gas prices right. I don't argue that, and so most of Jerry's arguments are irrelevant.
This debate is in fact about what overall government action is needed to incentivize clean energy in order to avert catastrophic climate change. Yes, I stand by all of my unrebutted arguments on peak oil, but if you avert catastrophic climate change than you avert peak oil, so the peak oil argument is secondary. I would just say that Jerry never responded to the 2005 US Department of Energy study that makes clear you can't wait until oil prices reach absurd levels in order to act -- else you ensure more than a decade of severe economic misery, since changing out our transportation system simply can't happen as fast as prices can change. So again, Jerry embraces the wait until it's too late strategy.
Finally, for the record, let me correct some odd misstatements by Jerry: "Joe claims that there is no market alternative to oil in the transportation sector." That would be the exact opposite of what I have argued. We know what the alternatives are, and government's role is to accelerate them into the marketplace before the decade or longer price shock predicted by the Department of Energy -- and before we are stuck with yet more hundreds of billions of dollars in long-lasting energy infrastructure that makes avoiding catastrophic climate change all but impossible.
Jerry claims:
In the course of his rebuttal, Joe has rightly abandoned several of his initial arguments for renewable energy subsidies. To wit, he has dropped his contention that oil imports make us poorer; dropped his argument that subsidies are necessary to overcome embedded infrastructural advantages held by incumbent fossil fuel industries; and dropped his claim that renewable energy creates jobs and/or is, by definition, good for the macroeconomy. That’s all to the good – those are bad arguments. Since Joe has offered no defense of those arguments when pressed, we will likewise spend no further time on them.
No, no, and no.
Obviously our country's large and growing endemic trade deficits have made us relatively poorer than other countries. That is pretty straightforward economics. The oil states have ended up with trillions of dollars of our currency and that ultimately leads to a decline in the value of our currency relative to the rest of the world, making us relatively poorer. I would say, "Duh!" but the point seems lost on Jerry. As T. Boone Pickens and others warned, we are facing a multi-trillion dollar transfer of wealth to the oil states just over the next 10 years. The situation is untenable to everyone except Cato. So yes, avoiding this wealth transfer remains a major reason for action, but I have focused on global warming because it is an even more important reason for action.
The embedded infrastructural advantages held by incumbent fossil fuel industries is the subject of a literature so large I am stunned that Jerry is either unaware of it or blithely chooses to ignore it. In this country alone, the sunk cost of the electric grid and existing polluting power plants -- including those that have been grandfathered out of serious environmental compliance -- is probably $1 trillion. The sunk cost of the gasoline fueling infrastructure and the existing manufacturing capacity for inefficient vehicles is also $1 trillion. Also, Jerry never rebutted my point that existing polluting industries have gotten historically received far greater subsidies than renewables. So yes, overcoming historical advantages is yet another strong argument for the government jumpstarting the transition to a clean energy economy.
Jerry Taylor asserts that if I don't respond in detail to each and every one of his points, then I must be conceding that point. Yes, it's a silly argument, since Jerry throws too much nonsense on the floor for anybody to clean up. But let's apply Jerry's argument to his "rebuttal."
Jerry refused to respond to my most important assertion that, if he won't spell out his greenhouse gas targets and timetables for achieving then, "he is embracing unrestricted greenhouse gas emissions, and those interested in avoiding catastrophic climate impacts will need to look elsewhere than Cato." Jerry and Cato offer the world no hope for averting the impacts that the world's top scientists spell out in their most recent multi-year synthesis of the latest scientific literature.
And so I can only assume that Jerry thinks the preferred path for the world is losing 70% or more of the world's species, widespread desertification, loss of the inland glaciers that provide water to a billion people, and significant, ever-accelerating, and irreversible sea level rise.
In general there is little point in debating with people hell-bent on denying the overwhelming scientific understanding and enormous body of observational evidence about the threat of catastrophic climate change.
The reason I press this central point is that only by accepting what science tells us can we understand how deeply and quickly we must reduce emissions. I (and others) have written very extensively on the subject of how a cap-and-trade system cannot jumpstart the transition to a different transportation system fast enough to save the planet (or to avert the consequences of peak oil) -- see here and here.
Jerry has tried to pretend that this debate is a narrowly about direct government subsidies for renewable energy. It is not. I have clearly stated that direct government subsidies for renewable energy are valuable to maintain and expand until a serious carbon price kicks in. So most of Jerry's arguments are aimed at a straw man that direct government subsidies for renewable energy are needed after we get greenhouse gas prices right. I don't argue that, and so most of Jerry's arguments are irrelevant.
This debate is in fact about what overall government action is needed to incentivize clean energy in order to avert catastrophic climate change. Yes, I stand by all of my unrebutted arguments on peak oil, but if you avert catastrophic climate change than you avert peak oil, so the peak oil argument is secondary. I would just say that Jerry never responded to the 2005 US Department of Energy study that makes clear you can't wait until oil prices reach absurd levels in order to act -- else you ensure more than a decade of severe economic misery, since changing out our transportation system simply can't happen as fast as prices can change. So again, Jerry embraces the wait until it's too late strategy.
Finally, for the record, let me correct some odd misstatements by Jerry: "Joe claims that there is no market alternative to oil in the transportation sector." That would be the exact opposite of what I have argued. We know what the alternatives are, and government's role is to accelerate them into the marketplace before the decade or longer price shock predicted by the Department of Energy -- and before we are stuck with yet more hundreds of billions of dollars in long-lasting energy infrastructure that makes avoiding catastrophic climate change all but impossible.
Jerry claims:
In the course of his rebuttal, Joe has rightly abandoned several of his initial arguments for renewable energy subsidies. To wit, he has dropped his contention that oil imports make us poorer; dropped his argument that subsidies are necessary to overcome embedded infrastructural advantages held by incumbent fossil fuel industries; and dropped his claim that renewable energy creates jobs and/or is, by definition, good for the macroeconomy. That’s all to the good – those are bad arguments. Since Joe has offered no defense of those arguments when pressed, we will likewise spend no further time on them.
No, no, and no.
Obviously our country's large and growing endemic trade deficits have made us relatively poorer than other countries. That is pretty straightforward economics. The oil states have ended up with trillions of dollars of our currency and that ultimately leads to a decline in the value of our currency relative to the rest of the world, making us relatively poorer. I would say, "Duh!" but the point seems lost on Jerry. As T. Boone Pickens and others warned, we are facing a multi-trillion dollar transfer of wealth to the oil states just over the next 10 years. The situation is untenable to everyone except Cato. So yes, avoiding this wealth transfer remains a major reason for action, but I have focused on global warming because it is an even more important reason for action.
The embedded infrastructural advantages held by incumbent fossil fuel industries is the subject of a literature so large I am stunned that Jerry is either unaware of it or blithely chooses to ignore it. In this country alone, the sunk cost of the electric grid and existing polluting power plants -- including those that have been grandfathered out of serious environmental compliance -- is probably $1 trillion. The sunk cost of the gasoline fueling infrastructure and the existing manufacturing capacity for inefficient vehicles is also $1 trillion. Also, Jerry never rebutted my point that existing polluting industries have gotten historically received far greater subsidies than renewables. So yes, overcoming historical advantages is yet another strong argument for the government jumpstarting the transition to a clean energy economy.
Finally, it is patently obvious that renewable energy creates jobs, and since they do so in a manner that is sustainable, it is by definition good for a sustainable macroeconomy. What Jerry fails to understand because he doesn't believe the scientific understanding of global warming as detailed by the scientific literature and summarized by the IPCC is that we need to replace most of the energy infrastructure of the nation and the world with a clean energy infrastructure by mid-century. That means renewable energy and clean energy will be the biggest source of jobs in the coming decades. Government support for clean energy now can ensure that as the nation and the world begins to act seriously on global warming, we are exporting technology and creating jobs, rather than importing the technology and shedding jobs.
Rebuttal
Cato proposes a do-nothing energy and climate strategy
You can always count on Jerry to marshal the best flawed arguments for any libertarian argument, even one as patently indefensible as opposing government efforts to promote clean energy.
Averting catastrophic global warming is by far the most important reason to aggressively promote clean. To directly address Jerry's final point, the "prices" of carbon-emitting fossil fuels are grossly undervalued today and that potentially fatal market failure is indeed the central argument for government action. So let's start there.
Taylor and Cato do not view the problem as an urgent crisis. Indeed, they don't really see human-caused global warming as a problem necessitating much government action at all. Certainly they are entitled to ignore the science, but the rest of us cannot afford to. Taylor cites one paper claiming that the "latest IPCC report provides strong evidence that adaptation is a cheaper and better response than mitigation," but you shouldn't be surprised to learn that comes from Cato, not any actual climate scientists involved in the most thorough, multi-year analysis of the latest science. Taylor also cites a very out-of-date 2005 analysis by one economist on the marginal damage costs of carbon dioxide emissions. Both the economics and the science has long since passed that perspective by.
Let's go back just one year, to 2007, and review the latest IPCC report and what its authors said about it, which is precisely the opposite of what Cato claims. Last November, in its definitive scientific synthesis report, the Intergovernmental Panel on Climate Change (IPCC) issued its strongest call for immediate action to save humanity from the deadly consequences of unrestrained greenhouse gas emissions.
This report -- signed off by 130 nations including the U.S. and China -- slammed the door on any argument for delay and makes clear we must under no circumstances listen to those who urge that we wait and adapt, such as Jerry and the Cato crowd. As the New York Times put it:
Members of the panel said their review of the data led them to conclude as a group and individually that reductions in greenhouse gasses had to start immediately to avert a global climate disaster that could leave island states submerged and abandoned, African crop yields decreased by 50 percent, and cause over a 5 percent decrease in global gross domestic product.
... this summary was the first to acknowledge that the melting of the Greenland ice sheet from rising temperature [which would raise the oceans 23 feet] could result in sea-level rise over centuries rather than millennia.And the IPCC almost certainly underestimates the timing and severity of likely impacts because it ignores or downplays key amplifying feedbacks in the carbon cycle (see "Are Scientists Overestimating -- or Underestimating -- Climate Change" especially Part II and Part III). Indeed, IPCC head Rajendra Pachauri -- a scientist and economist -- admitted as much:
He said that since the panel began its work five years ago, scientists have recorded "much stronger trends in climate change," like a recent melting of polar ice that had not been predicted. "That means you better start with intervention much earlier."How much earlier? The normally understated Pachauri warns:
"If there's no action before 2012, that's too late. What we do in the next two to three years will determine our future. This is the defining moment."In short -- time's up!
To balance the bad news, the IPCC and its member governments agree on the good news -- action is very affordable:
In 2050, global average macro-economic costs for mitigation towards stabilisation between 710 and 445ppm CO2-eq are between a 1% gain and 5.5% decrease of global GDP. This corresponds to slowing average annual global GDP growth by less than 0.12 percentage points.But how is that possible? How can the world's leading governments and scientific experts agree that we can avoid catastrophe for such a small cost?
Because that's what the scientific and economic literature -- and real-world experience -- says:
Both bottom-up and top-down studies indicate that there is high agreement and much evidence of substantial economic potential for the mitigation of global GHG emissions over the coming decades that could offset the projected growth of global emissions or reduce emissions below current levels.In fact, the bottom up studies -- the ones that look technology by technology, which I believe are more credible -- have even better news:
Bottom-up studies suggest that mitigation opportunities with net negative costs have the potential to reduce emissions by around 6 GtCO2-eq/yr in 2030.Wow! A 20% reduction in global emissions might be possible in a quarter century with net economic benefits.
But don't we need new technologies? Of course, but we don't need -- and can't afford -- to sit on our hands when we have so many cost-effective existing technologies:
There is high agreement and much evidence that all stabilisation levels assessed can be achieved by deployment of a portfolio of technologies that are either currently available or expected to be commercialised in coming decades, assuming appropriate and effective incentives are in place for their development, acquisition, deployment and diffusion and addressing related barriers.Yes the IPCC says we need to do two things at once: aggressively deploy existing clean technology (with carbon prices, government incentives, and standards) and aggressively finish developing and commercializing key technologies and systems that are in the pipeline. Anyone who argues for just doing the latter is disputing a very broad consensus.
What do we risk if fail to act now?
Anthropogenic warming could lead to some impacts that are abrupt or irreversible, depending upon the rate and magnitude of the climate change. Partial loss of ice sheets on polar land could imply metres of sea level rise, major changes in coastlines and inundation of low-lying areas, with greatest effects in river deltas and low-lying islands. Such changes are projected to occur over millennial time scales, but more rapid sea level rise on century time scales cannot be excluded.In short, we risk that our top climatologists's warnings on sea level rise prove true. The best post-IPCC analysis suggests that on our current emissions path we are "most likely" facing 0.8 to 2.0 meters sea level rise by 2100 -- a rise that would then continue at 6 to 12 inches a decade or more for centuries. You simply don't "adapt" to that in any meaningful sense of the word, certainly the hundred million people who would be initially displaced by even one meter of sea level rise don't adapt to their homes being inundated -- any more than the citizens of New Orleans "adapted" to Hurricane Katrina. Mitigation, which is to say prevention, is the only moral strategy.
What else is coming? The IPCC explains
As global average temperature increase exceeds about 3.5 degrees C, model projections suggest significant extinctions (40-70% of species assessed) around the globe.Yet on our current emissions path, which exceeds the most pessimistic of the emissions scenarios the IPCC considered, total warming this century is poised to exceed 5°C. How do you "adapt" to losing more than half the species on the planet?
The IPCC's leading scientists are begging the world to act is now or risk destroying life on the Earth as we know it today.
So yes, the "prices" of carbon-emitting fossil fuels are grossly undervalued today and that potentially fatal market failure is indeed the central argument for government action. We urgently need a serious price on the emission of all greenhouse gases, but because we have dawdled for so long, we also need to aggressively push all forms of clean energy until a serious price kicks in.
Taylor keeps bringing up nuclear power because he thinks I oppose it. He obviously has never read my extensive writing on the technology strategy needed to avert catastrophic climate impacts. But nuclear power is a mature technology with a large market share that has been the beneficiary of some one hundred billion dollars in direct and indirect subsidies. A price for carbon dioxide will be incentive enough for nuclear power this century.
I'm glad Jerry (seems to) support a price for carbon dioxide. But, as I wrote, it could take years until carbon dioxide has a significant price that reflects its true cost to humanity. Until then, government incentives are critical. These incentives can be sunset over the next decade, but only if the next president and Congress act swiftly and decisively to get them in place right away.
Peak Oil
Let me briefly return to the oil issue. Jerry writes, "It's not altogether obvious to us that oil is becoming scarcer." It may not be obvious to Cato, but it is to everyone else.
In January, Jeroen van der Veer, chief executive officer of Royal Dutch/Shell, e-mailed his staff that the world will peak in conventional oil and gas within the decade. He wrote: "Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand." It used to be unheard of for oil executives to talk about limits to oil production. Now it happens all the time.
John Hess, chairman of Hess Corp., a global oil and mineral exploration company, said recently, "An oil crisis is coming in the next 10 years. It's not a matter of demand. It's not a matter of supplies. It's both." In October, Christophe de Margerie, CEO of French oil company Total S.A., said that production of even 100 million barrels a day by 2030 will be "difficult." In November, James Mulva, CEO of ConocoPhillips, the third biggest U.S. oil company, told a Wall Street conference: "I don't think we are going to see the supply going over 100 million barrels a day ... Where is all that going to come from?"
Even the normally staid International Energy Agency warned in July of an impending oil and gas supply crunch "with OPEC spare capacity declining to minimal levels by 2012."
Jerry doesn't seem to care if we have a permanent trillion-dollar deficit in the oil or a truly brutal price shock, which would be the all but inevitable outcome of embracing Cato's do nothing strategy. He argues:
Regardless, if and when oil begins to disappear -- or more accurately, if and when market actors believe the oil scarcity is on the horizon -- oil prices will go up accordingly and the market will adjust without any need for government assistance. So while "peak-oil" arguments come and go with the related booms and busts in oil markets, there is no need for a policy argument about oil depletion.Only one flaw in that laissez-fair argument: The "market" in oil consumption doesn't actually adjust quickly because our transportation system is 97% dependent on oil. You simply cannot change the transportation system or the fuel delivery system fast enough to avoid devastating economic impacts.
Replacing oil in the transportation sector requires strong government action two decades before a peak because of the time needed to replace vehicles and fuel infrastructure. That was the conclusion of a major study funded by the Department of Energy in 2005 -- yes, the Bush DOE -- on "Peaking of World Oil Production." The report notes:
"The world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary."The same central point is true about global warming. Act now, or face very harsh consequences. The global warming situation is, however, much worse than the peak oil situation, since when the climate changes, it does so irreversibly on a timescale of millennia.
Jerry ends by writing:
We return then to our original argument. To wit, we know that, as a general matter, free markets work better than socialism. We know that market allocation of goods and services leads to better economic outcomes than political allocation of the same. Only if there is a market failure -- that is, only if there is something peculiar about energy markets that makes prices "wrong" -- is there intellectual room for the argument that government intervention will improve efficiency. We are still waiting for that argument from Joe.Jerry says this with a very straight face in spite of recent events that should have ended forever the notion that the unfettered marketplace always knows best. In fact, the unfettered market has brought us to the worst economic crisis since the Great Depression. Had the federal government combined with the world's other major governments not acted quickly, the entire financial system would almost certainly have collapsed under the unrestrained greed of brand-name market actors who had, until now, been considered incredibly sophisticated.
For Jerry, Cato, and libertarians the choice is between some abstract free-market or socialism. For the rest of us, the choice is between catastrophic climate impacts and intelligent government-led investments in clean energy. I have again and again described the market failure. More importantly, so have our leading scientists. I agree with the world's leading climate scientists that we need to keep carbon dioxide concentrations at or below 450 parts per million, which means global emissions must peak around 2020-2025, and we need a 50% cut in global carbon dioxide emissions from current levels by mid-century. It also means this country (and all industrialized nations) must return to 1990 levels of emissions by 2020 and achieve an 80% cut by midcentury, which US politicians from Arnold Schwarzenegger to Barack Obama have embraced. I support such domestic action and international action, and I have repeatedly proposed both near-term and medium-term strategies to get there.
It is time for Jerry and Cato to stop dancing around this central issue. What carbon dioxide concentrations target does Jerry propose? What emissions target does Jerry propose for the nation and the world both by 2020 and 2050? What climate policies should the nation and the world adopt to achieve those targets? If he won't answer those questions, then he is embracing unrestricted greenhouse gas emissions, and those interested in avoiding catastrophic climate impacts will need to look elsewhere than Cato.
Opening Argument
The government must jumpstart the transition to a clean energy economy now
The nation faces two huge economic and national security problems that can be solved only through rapid deployment of clean energy. First, we have human-caused global warming from greenhouse gases such as carbon dioxide emissions from burning fossil fuels. On our current emissions path, we face sea level rise of tens of feet, widespread desertification, a worsening of tropical diseases and respiratory illnesses, and the loss of half or more of the species. The situation is dire:
"If there's no action before 2012, that's too late. What we do in the next two to three years will determine our future. This is the defining moment." Those are the words of Rajendra Pachauri, the head of the UN Intergovernmental Panel on Climate Change last November. And Pachauri is no alarmist. Indeed, the Bush administration successfully lobbied to install the engineer and economist as IPCC chair in 2002 after forcing out the outspoken Robert Watson.
Both presidential candidates support a cap on greenhouse gas emissions and a trading system that will establish a price for global warming pollution. But it could take years until carbon dioxide has a significant price that reflects its true cost to humanity. Until then, government incentives are critical to providing a level playing field. These incentives can be sunset over the next decade, but only if the next president and Congress act swiftly and decisively to get them in place right away.
Breaking our oil habit will pay off
Our addiction to oil is an urgent problem. The global economic slowdown has temporarily reduced oil prices, but the fundamental trend has become increasingly clear: Conventional oil production cannot keep up with demand much longer. Oil production is peaking. In January, Jeroen van der Veer, chief executive officer of Royal Dutch/Shell, e-mailed his staff that "Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand." The normally staid International Energy Agency warned in July of an impending oil and gas supply crunch "with OPEC spare capacity declining to minimal levels by 2012."
That's why even conservatives like billionaire oilman T. Boone Pickens are warning we must aggressively deploy renewable energy over the next decade or face an unprecedented multi-trillion dollar transfer of wealth from Americans to oil-producing countries, most of whom do not share our values. And that requires multi-year government clean energy incentives plus a major government-led effort to build the "green grid" needed to power the country with windpower from the Midwest and solar baseload (also known as concentrated solar thermal power) from the Southwest.
Old technologies are entrenched
At the same time, we'll need government incentives to jumpstart the transition to plug-in hybrid cars that can run on this clean electricity, in order to overcome the huge built-in advantages that come from the trillion-dollar a sunk cost of the existing infrastructure that supports gasoline-powered cars. We certainly need to keep pushing research and development of advanced biofuels, but for years if not decades to come, the price of biofuels is likely to be linked to the price of oil and so electricity is the only alternative fuel that can lead to energy independence and that can shield Americans from the brutal price spikes that are to come.
The other core clean energy strategy is an aggressive push on energy efficiency, including efficient lighting, heating, and cooling. The good news here is that efficiency is already five times cheaper than new power plants. That means accelerating efficient technologies into the marketplace does not so much require government incentives as it requires changing regulations to reward (rather than punish) utilities for promoting efficiency, as states like California have shown.
Renewable energy has been coming down in price for decades and in many markets is already competitive with or close to competitive with traditional, polluting energy. Yet those dirtier forms of energy have historically received much larger incentives and subsidies over the years. For instance, from 1948 to today, nuclear energy R&D exceeded $70 billion, whereas R&D for renewables was about $10 billion. And from 2002 to 2007, fossil fuels received almost $14 billion in electricity-related tax subsides, whereas renewables received under $3 billion.
Create jobs, or see them go elsewhere
Clean energy will be the greatest source of high-wage jobs in the coming decades, which can take us from economic recovery to economic prosperity. Sadly, the governments of countries like Germany, Japan, Denmark, and Spain have been incentivizing their clean-tech industries far more than we have, even though we were often the first to commercialize the technology, as in the case of solar photovoltaics. We must act now if we are to regain our leadership in these vital, fast-growing industries.
The clean-energy incentives needed to tackle the climate and peak oil problems can be sunset over the next decade. The fundamentals of the oil market ensure that we will be seeing $5 gasoline and higher within ten years. And once serious climate regulations establish a carbon dioxide price that reflects the damage it causes, the playing field between clean energy and dirty energy will leveled once and for all.
Rod Richardson
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Can we compromise? How about tax-cutting our way to a greener future?
Try this on for size: total tax freedom for all green energy sources, infrastructure and vehicles. Zero sales, income, or capital gains tax on stocks and dividends, in proportion to the percentage of a company's revenue that comes from green energy sources.
Now, seeing as it is closing in on 2:00 AM, I'm not going to make all possible arguments about this right now. Anyone interested can read more at http://www.GreenEner
But I will say this. Total tax freedom is utterly unlike any incentive that has been discussed in this debate so far. Even tax credits allow unprofitable companies to seem profitable. Tax freedom, however, cannot make the unprofitable profitable, so only real solutions will survive. And, if broadly applied, tax freedom will allow the market, not the government, to pick the specific winners.
There can be no doubt that tax freedom for green energy will supercharge investment in this vital area of entrepreneurship well beyond anything Joe or the President-elect has proposed, creating millions of new jobs. Obama's proposed $150 billion direct investment over ten years simply cannot compete with what the private sector can do if unleashed and properly motivated with low-or-no taxes. ExxonMobil itself will shift green in order to become tax free. And, by the way, this proposal would swiftly bring massive new debt and equity investment to the green-shifting auto industry, obviating the need for bailout, bankruptcy or socialist takeover.
Why Joe should love this is obvious. It is massively more effective than the incentives he has proposed, and does not cost a dime of federal spending upfront.
Why Jerry and Peter should love this goes to the heart of what Cato is about. Milton Friedman once said "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible." There are plenty of other arguments I could make about putting downward pressure on energy prices, etc. But this one is the clincher: it is a TAX CUT. As such, the net benefit to the economy from cutting taxes will be positive. Forget global warming, forget foreign oil dependency. Cutting taxes is a good thing to do, at all times, for whatever reason.
As such, it is different from incentives that rely on mandates, federal spending or "federal investment," tax credits, bold new initiatives to pick this or that particular winner. All of those have negative blow-back, none have the benefits of a broad tax cut.
One last thing. As a Cato donor for decades, I can't begin to express my dismay that you would extol the virtues of a carbon tax (or any tax hike). Or the unenforceable boondoggle that is cap-and-trade, a carbon tax by another name. Our economy is reeling from the 500% oil price rise of the last two years -- which may likely return if the economy attempts recovery -- and you want to make oil cost more? Do you want to bring on a depression?
But at least I am glad that you like the principle behind the carbon tax, which is that the best thing to do, if anything, is to adjust any price discrepancy between fossil fuels and clean energy. Because a green energy tax cut really amounts to the double negative of a carbon tax: it is a no-carbon tax cut. Same principle, superior result. Why? Tax cut.
John Gaskin
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Carbon Credits
Artur Landerzon Barrera Garcia
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In Hey
Wlodzimierz Holsztynski
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We would still have lamps in our ten store tall computers, breaking non-stop.
BTW, about the title, make it "10-story tall" (not "ten store tall" -- sorry for this error).
This "Jumpstarting the Transition to Clean Energy" knol by J.R. is pure demagogy, it makes no sense, it is just a bunch of grammatical constructions which sound oh-so-so-sophisticat
You can get the taste of how government operates from "Government wa(steful wa)ys":
http://knol.google.c
And, yes, private business would find ways to invest into sensible projects which would achieve their final goal some 40 years later. I will describe how. But it will not happen in the presence of an overgrown, stifling government. I'll describe the long range investments in my "Art of Agreement",
http://knol.google.c
Without the US government, we wouldn't have voice-over-ip, and the resultant collapse in voice communication fees.
i.e. The government has fostered some fantastic innovation in the last 50 years. In fact, if you go back to the early 1800s the government enable efficient production of arms by mandating standard interchangeable parts.
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hack
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Subsidizing... everyone?
Consider: instead of putting, say, $50B into a technology that competes with fossil fuels, in order to get it cost-effective, how about *withdrawing $50B of subsidies from the oil companies. What's the economic difference?
In addition taking current subsidies away from the oil industry isn't going to take away the advantages they've gained from past subsidies. The infrastructure the government has helped build for the petroleum industry is still going to be there and it will continue to be a large hurdle for green tech to match or overcome.
Still, taking away the federal subsidies currently given to the oil industry is pretty much a no-brainer. We just need to turn around and give that subsidy to green tech. Some of that money could continue going to oil companies if they're smart and willing to diversify into green power.
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Anonymous
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New technologies to end the petroleum age.
Interestingly, diesel power could make massive inroads, now that we have companies working on improved forms of biodiesel fuel that burn cleaner than petroleum diesel fuel but does not suffer the low-temperature problems that plague older biodiesel formulations. This could mean within 10-15 years the average car will be a plug-in hybrid backed by a small-displacement diesel engine, which means 90-100 mpg on diesel fuel could become practical reality.
smurf
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The World in 50 Years