April 9, 2009

Notes on the Green Economy and Demosclerosis

Chris Hayes' exposé of how the paper industry has been abusing the alternative fuel tax credit has been making the Internet rounds lately, and with good reason: it provides a cautionary tale of how environmental regulations, however well-meaning, can be perverted by private interests. I've been trying to compose my thoughts on the matter, because I think it points to some really important things we need as a country to think about as we start to develop a response to climate change. In lieu of a proper response, however, let me throw out some points for consideration:
  1. Of all alternative energy sources, biofuels is the most problematic -- as environmentalists, for one, have been arguing for years. In fact, I dare say support for biofuels is stronger among greenwashers than among actual greens.
  2. The denialist right typically seizes on biofuels debacles such as this one and blows it up as emblematic of climate change policy in general; likewise with efforts by utilities and corporations to lard up cap-and-trade plans with offsets and free pollution credits. (See, for example, Will Wilkinson here and here.)
  3. There's a tinge of disingenuousness to right-wing arguments about the green economy, for three reasons:
    1. Right-wingers tend to think that climate change is not that big a deal, anyway, so they attack any effort to deal with the problem, regardless of the merits;
    2. They tend to view all government intervention in the economy as bad, so even economically sound ideas like a carbon tax (or cap-and-trade with auctioned credits) are opposed;
    3. They tend to not give regulatory capture issues with the fossil fuel industry the same level of scrutiny.
  4. That said, regulatory capture of the green economy is a legitimate issue -- put simply, climate change is too important to be left to the vagaries of interest-group politics.
  5. There's reason to despair of a really effective climate bill getting through Congress; demosclerosis is as endemic today as it has ever been. (The Waxman-Markey bill that debuted recently is, altogether, pretty good, as David Roberts notes; but its passage is far from a sure thing.)
  6. Some principles, however, can be derived from this episode for use as the debate heats up over a climate change bill:
    1. Better to tax pollution than to subsidize clean energy.
    2. Better to subsidize energy efficiency than to subsidize alternative energy sources.
    3. Better to subsidize alternative energy with clear benefits (solar, wind, geothermal) than those with dubious benefits (biofuels, "clean coal").
    4. Remember that the point of all this is to keep the planet from warming to catastrophic levels -- other goals (economic recovery, new jobs) are all secondary.
    5. The rules of good government are not suspended for the green economy; we should fear the rise of Big Wind just as we do Big Oil. (Of course, the worst offender, Big Biofuels, is also Big Ag, the product of decades of misguided agricultural subsidies; see point (a).)
    6. At the same time, changing the incentives to burn fossil fuels will inevitably mean that folks will learn to make a profit in that new environment. And that's OK; in fact, it should be encouraged. But it shouldn't be the goal.

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