Monday, June 23, 2008

Tom Friedman's Salvo

I've been harping on energy policy these past few weeks. One of my favorite writers, Tom Friedman has a nice opinion piece in the NYT and seems to take the same side of my argument, only with more elegance.

Here are some excerpts:

Regarding Bush's call for more drilling:

"It’s as if our addict-in-chief is saying to us: “C’mon guys, you know you
want a little more of the good stuff. One more hit, baby. Just one more toke on
the ole oil pipe. I promise, next year, we’ll all go straight. I’ll even put a
wind turbine on my presidential library. But for now, give me one more pop from
that drill, please, baby. Just one more transfusion of that sweet offshore

He reminds us that bill H.R. 6049 — “The Renewable Energy and Job Creation Act of 2008,” which extends for another eight years the investment tax credit for installing solar energy and extends for one year the production tax credit for producing wind power and for three years the credits for geothermal, wave energy and other renewables, is set to expire. Senate Republicans have blocked the bill six times. Why do we only give tax credits to oil companies??!?!?!?!

Regarding what Bush should say to the country:

“Oil is poisoning our climate and our geopolitics, and here is how we’re going
to break our addiction: We’re going to set a floor price of $4.50 a gallon for
gasoline and $100 a barrel for oil. And that floor price is going to trigger
massive investments in renewable energy — particularly wind, solar panels and
solar thermal. And we’re also going to go on a crash program to dramatically
increase energy efficiency, to drive conservation to a whole new level and to
build more nuclear power. And I want every Democrat and every Republican to join
me in this endeavor.”

I completely agree. Remember, the Department of Energy's own study found that drilling in ANWR would only decrease the price of oil by 75 cents per barrel. And a study by the Energy Information Administration found that drilling offshore in the Atlantic, Pacific, and Gulf of Mexico would have no significant impact on the price of oil.

Follow this link and send an electronic petition to congress to stop plans for more drilling on the coasts.


Don Martin said...

I know that in your and Friedman's lexicon "federal funding for alternative fuels" = "magic." It will solve all of our problems.

Supply and demand are words that have yet to enter that lexicon I am afraid....

But why has the magic not worked for the past few decades we have funded it? Why has the European magic not worked? Why has GM suddenly come closer to solving the problem than any of the money the government has made me give the magicians?

Because magic - sadly - isn't real.

We all know our government won't let that funding expire. The nanny state won't let that happen. Don't worry.

And they'll just keep on taking my money and spending it on magic.

Now you see it.

And - at least in my wallet - now you don't.

Don Martin said...

Although we may find common ground with Friedman's comment on nuclear energy. Do you agree with him on that point?

I also think the market is doing just fine supporting his floor for prices. He is getting that right now, and we don't need an invasive artifical construct. He is correct, though, that the high price will drive the market to find alternative fuels -- and that is happening now. It won't happen overnight, but it will happen a lot sooner that turning over the keys to the people who brought us the DMV.

Will said...

Don - I posted too late the last time this came up but referring to one of your older posts, how do you propose 'dealing w/ externalities like pollution.'

And I'll quote myself (sorry) -- it's astounding that given US corporate tax structure, legislative influence of lobbyists, etc, etc GM et al. get treated like the unfettered engines of ingenuity in this debate. GM takes your tax money too I'm sad to report and with the massive marketing budget, there's plenty of waste in the system. Their motivation is profit -- I have no problem with that -- but when pollution is not factored into the costs of production/consumption we have market failure.

Don Martin said...

We do not have a market failure.

First - They should not get tax breaks or subsidies or bail outs. I agree.

Second - They are giving what the people want. The people have yet to care about global warming and pollution to the point that it affects their purchasing decisions. They did not consider that externality to be a cost.

Now, some do.

Many more view the 300% increase in gasoline prices to be even more of a cost.

Thus, the market is responding to what the people want.

Third - Every time the market does not provide what YOU want, it does not mean the market failed.

Fourth - You hit the real problem involved with gasoline and that is the externality of pollution. There are many ways to respond.

1 - Friedman's idea -- tax the polluters, so they have to charge more or tax the people who buy their product. Not suprisingly, I don't like this idea -- mainly because it gives money to the government that it will spend on things we don't need (at best) or further entrench the nanny state (at worst).

I think the answer is information.

Unfortunately for people who believe global warming is a true threat to humankind, the average consumer is not the enlightened urban hemp wearing hipster who has all the answers if the man would just listen. The average consumer does not factor in the cost to their health/life when purchasing the product. Or, if she does, she does not consider it to be much of a cost, because -- like me -- she believes American companies will figure it out soon anyway (like always) so why should she put more cost on herself when the government puts enough cost on her as it is.

Now, devotees of the Goracle may shake their heads in dismay that Madame Consumer would be so stupid. And, as is typical of such devotees, they will step in to save stupid Americans from themselves by telling them what they can and cannot do -- and taking money from them so they can hire more people to tell them what to do.

So, snarkiness aside.

I could consider some pollution trading as a way to limit overall emissions of nasty things, but I honestly think it all will be solved by American companies in the next 5 years, and the next president will reap the benefits of something he did nothing to accomplish.

I would never support Friedman's taxes, because we have the same effect now, and we don't need to give the government any more money so it can start punishing me for eating Big macs like they do in Japan.

Don Martin said...

The latest issue of the Economist has a special section on Energy. It touts the carbon tax idea but also acknowledges the current market pretty much is replicating that tax. It also reviews all of the recent advances in greentech that will revolutionize our energy consumption over the next few years (plug-in cars; wind turbines; solar panels) with tremendous innovations primarily performed by evil American corporations who undoubtedly hire fat people.

Will said...

an externality - cost that is not born by producer or consumer but by third parties - is by definition a market failure. You are acknowledging that pollution is an externality but it may be too painful to use the term 'market failure.' The answer is information? I don't know what that means but is it that individuals should decide the degree of importance they place on externalities and incorporate them into their buying decisions?