Why Not Use the Money to Support Alternative Energy
There are three reasons that this is a bad idea.
1. It gives credence to the “they'll take the money and run.” crowd.
2. It puts the government in the position of having to pick winners and losers. The government is not designed for this and does a very bad job of it. In this area I can give two examples.
Ethanol from corn is not a very good deal. The net energy production from corn is very small. However, that does not keep Midwestern law makers from promoting subsidies for this ineffective solution.
Hybrid buyers get a subsidy for buying these cars. That means I can trade in my 30 mile per gallon Miata and get a 25 mile per gallon 250+ horsepower Honda Accord hybrid and get a check from you the taxpayer for doing so.
3. It is unnecessary. Imagine the following. I am going to make you my regional sales director in my air-conditioning company. I will give you the choice of two regions. For the first I will give you technical assistance to provide the best and most efficient product on the market and generous subsidies for your customers or I will give you none of that. In the first case your territory is the Arctic Circle; in the second case your territory is Arizona. Of course, you are going to choose Arizona because you are choosing the one thing that is essential to the sale of your product; a market.
Raising fossil fuel prices creates a predictable and sustainable market for every form of alternative energy. Even if/when oil prices fall the price to the consumer will be high enough to make alternative energy or just plain conservation attractive.
Is solar better than wind? How do they compete with ethanol? The preeminent arbiter of these kinds of questions will make the call: the market.
There used to be an ad by BASF on television that said, “We don’t make the rug. We make the rug softer.” An energy tax doesn’t make alternative energy. It makes alternative energy competitive.
1. It gives credence to the “they'll take the money and run.” crowd.
2. It puts the government in the position of having to pick winners and losers. The government is not designed for this and does a very bad job of it. In this area I can give two examples.
Ethanol from corn is not a very good deal. The net energy production from corn is very small. However, that does not keep Midwestern law makers from promoting subsidies for this ineffective solution.
Hybrid buyers get a subsidy for buying these cars. That means I can trade in my 30 mile per gallon Miata and get a 25 mile per gallon 250+ horsepower Honda Accord hybrid and get a check from you the taxpayer for doing so.
3. It is unnecessary. Imagine the following. I am going to make you my regional sales director in my air-conditioning company. I will give you the choice of two regions. For the first I will give you technical assistance to provide the best and most efficient product on the market and generous subsidies for your customers or I will give you none of that. In the first case your territory is the Arctic Circle; in the second case your territory is Arizona. Of course, you are going to choose Arizona because you are choosing the one thing that is essential to the sale of your product; a market.
Raising fossil fuel prices creates a predictable and sustainable market for every form of alternative energy. Even if/when oil prices fall the price to the consumer will be high enough to make alternative energy or just plain conservation attractive.
Is solar better than wind? How do they compete with ethanol? The preeminent arbiter of these kinds of questions will make the call: the market.
There used to be an ad by BASF on television that said, “We don’t make the rug. We make the rug softer.” An energy tax doesn’t make alternative energy. It makes alternative energy competitive.
posted by Geoff Berg | 6:29 PM
4 Comments:
i agree
Corrections: Add an "s" on "put" in "It put the government".
Delet the first "the" in "from the you the taxpayer".
Delete the "my" in "to make you my a regional sales director".
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