Government intervention in the market should be the exception rather than the norm. Before government intervenes in any market there needs to be a clear justification based on whether there is a real market failure to be corrected and whether the benefits of regulation clearly exceed the costs. Promoting “green” energy ideology is not such a justification.
The results of such government intervention in the US to date have been disastrous. Hundreds of billions of dollars have been wasted on “green” energy boondoggles with no measurable benefits. Besides the EPA regulations attempting to impose the substitution of “green” energy for fossil fuels, the one constant has been the demand for government and ratepayer subsidies for all these schemes. These subsidies will have to increase per unit of substitution under the new energy price structure which has emerged over the last few years.
The market has now clearly signaled that fossil fuel energy will remain lower cost than “green” energy despite some reductions in green energy prices in recent decades. The difference has now widened enormously with the advent of $1.70 natural gas, $30 oil, and falling coal prices. Yet the proponents of “green” energy want to continue to disregard what the market is saying, and pump even more taxpayer and ratepayer dollars into “green” energy despite the vote of no-confidence by the market. As fossil fuels have plunged in price, the cost of subsidizing “green” energy per unit of such energy has increased enormously since the cost differential has greatly increased, and this will have to be subsidized by someone–usually primarily at the expense of less affluent ratepayers–in one way or another.
“Green” Energy Is Just Another Government Boondoggle
The time has come to recognize that “green” energy is an increasingly expensive and hopeless proposition and that energy market decisions should be largely left to the market wherever possible rather than to ever further government intervention. The recent history of direct government intervention has been one of waste and misdirected resources, and there is no reason to expect this not to continue. As discussed in my book, Environmentalism Gone Mad, most earlier investments in wind farms have ended in unsightly scrap heaps that taxpayers must then often pay to remove after the subsidies have run out. This seems likely to continue.
The Climate-Industrial Complex has long claimed that “green” energy is almost becoming competitive with fossil energy. It is now even more clear that it never will be. The recent low prices for natural gas and oil appear likely to continue for at least decades and possibly even longer due to the new technology for extracting natural gas and oil from shale rock. Productivity in producing fossil energy is actually more rapid than it is for “green” energy, so it is ever more doubtful that “green” energy costs can ever catch up even if their prices continue to slowly fall.
The inability of government to pick market winners and thus formulate good industrial policies is illustrated by Obama’s repeated claims that we could not drill our way out of energy dependence on overseas sources of oil. We are now well on our way to doing just that. He also claimed that “green” energy was the wave of the future, and that this was a reason to invest public and ratepayer resources in this “emerging” technology. There is now little doubt that it is just one more failed technology backed by government that cannot and will not be competitive in the market. If the market had been left to decide the issue, we would never have wasted so many hundreds of billions on it. And everyone except the wind and solar industries would have been better off for it.