Good morning, California, and welcome to this week’s edition of Golden Blues. On tap today is a green boondoggle; later this week we’ll cover a blue one.
Governor Jerry Brown is in Paris working to encourage provincial leaders from other nations to sign a memorandum “promising to reduce greenhouse gas emissions 80 percent below 1990 levels by 2030.” Brown will predictably point to California’s recent passage of SB350, which requires California to “boost renewable energy use to 50%” over the next couple of decades, as an example of Californian “leadership” on the global climate issue.
Moreover, Brown has the support of what Joel Kotkin calls the “tech oligarchy-“ those Silicon Valley billionaires whose ascendancy has not only transformed the American economy and society, but also promises a generally liberal funding base for various social and environmental issues. Various tech oligarchs, including Jeff Bezos, Mark Zuckerberg, Bill Gates, Jack Ma, and Richard Branson, have teamed up to establish the “Breakthrough Energy Coalition,” an organization committed to saving the planet by encouraging wind, solar, and hydroelectric energy development. Read: subsidies for green energy companies and favorable positions for their (expensively-generated) power in public utilities markets.
Don’t get me wrong, I’m a big fan of government investments in technology and support for infant industries, up to and including measures that would make Murray Rothbard and Friedrich Hayek roll over in their graves. Hamiltonian economics– which is how we should be pursuing energy and climate policy nowadays- dictates nothing less.
But what Brown and the oligarchs are doing now is a counterproductive abuse of Hamiltonian economics- they are subsidizing industries that don’t work, will always be expensive and inefficient simply due to the physics behind them, and empirically have not been proven to do much to reduce carbon emissions and fight climate change. Ironically, the technologies that Brown and the oligarchs have been particularly hostile to- natural gas fracking and nuclear energy- have been the ones that have brought carbon emissions down in the past decades. Climate and energy policy should be focused instead on these, so that California’s efforts to curb emissions actually have some real results, while providing cheap and abundant energy for California’s middle and working classes.
Let’s look at an example from the 19th Century. Suppose American politicians, seeking a communications revolution, had opted to subsidize the Pony Express system- after all, it worked well enough!- instead of investing in transcontinental telegraph lines. Or better yet, what if, in seeking a transportation revolution, they had invested in canals and stagecoaches at the expense of railroads? What would have happened had dedication the wrong technologies dictated American investment policy?
Unfortunately, that’s exactly what’s happening now, with the California elite’s focus on “green” energy as the savior against climate change. Technologies that make a few rich, well-placed individuals feel good about their consciences are too inefficient to do much good in saving the planet and, to make matters worse, drive up energy prices for everybody. Just look at utilities in Los Angeles.
Subsidies for green energy are inimical to the interests of the Californian middle and working classes, and should be opposed by California Republicans at all levels of government.
That said, the Democrats are trying to address a very real issue- climate change-California Republicans would do well to put out a positive program seeking to resolve it, rather than simply opposing the boondoggle plans the ruling Democrats propose. Investments in nuclear energy and fracking could be a great solution, one friendly to the dream of a low-cost, higher-wage living for the upwardly mobile California middle and working classes.