The nation’s energy debate is a nonstarter.
While most people, according to the polls, believe we need to do something to slow global warming, there is no agreement on how. And, just as importantly, our reliance on the market is making it impossible to address the problem. As The New York Times makes clear, the high upfront costs of renewables places them at a disadvantage in the marketplace.
Even as many politicians, environmentalists and consumers want renewable energy and reduced dependence on fossil fuels, a growing number of projects are being canceled or delayed because governments are unwilling to add even small amounts to consumers’ electricity bills.
Deals to buy renewable power have been scuttled or slowed in states including Florida, Idaho and Kentucky as well as Virginia. By the end of the third quarter, year-to-date installations of new wind power dropped 72 percent from 2009 levels, according to the American Wind Energy Association, a trade group.
The Times explains that
Electricity generated from wind or sun still generally costs more — and sometimes a lot more — than the power squeezed from coal or natural gas. Prices for fossil fuels have dropped in part because the recession has reduced demand. In the case of natural gas, newer drilling techniques have opened the possibility of vast new supplies for years to come.
Left undiscussed is the infrastructure of incentives that supports the oil and natural gas businesses, with government subsidies for exploration and drilling dwarfing the small change provided to the green energy sector.
Government policy can address this — first, by ending the tax breaks given to gas and oil companies, plugging loopholes and then by shifting the money to green programs in the form of consumer credits and development subsidies for green companies.
The cost to society of burning one gallon of fossil fuel needs to be reflected in the price we pay at the pump, which is not happening now. An increase in the national gas tax, with the proceeds going to green investment (along with state level taxes that would pay for roads and mass transit) is good public policy that will save us money in the long run by preventing the costly impacts of climate change and other pollution-related problems.
Basically, we must use energy tax policy as a carrot and stick to alter the competitive field in the energy business.
