Economist goes over to the dark side
Some facts to hang your hat on: Good governance might save the day. Bad governance could just make things worse.
I generally agree with Galbraith’s opinions. However, there is always a reasonable probability that some of his opinions are wrong (as is true of anybody’s opinions, including my own). He’s quoted in David’s post:
“Planning” is a word that too many in this debate are trying to avoid, fearful, perhaps, of its Soviet overtones. But the reality of climate change is that central planning is essential, and on a grand scale.
History has a bad habit of repeating itself. In the past that was unavoidable because we had no way to record history so future generations would learn from others’ mistakes. We don’t have that excuse now. Ignoring history in today’s information age can’t be blamed on ignorance.
I don’t believe that Galbraith is calling for centralized planning on the scale of the former Soviet Union, or old-guard communist China, or present-day Cuba. We have seen, and recorded, the reality of what too much government central planning can do to people’s lives. If by central planning he means developing ways to direct the power of the free market to promote environmental benignity, great. But I’m not sure that is what he means. His call for central planning “on a grand scale” combined with the following statement found in an article by Galbraith (posted by Colin White) …
… has got me to wondering. It looks like he has been hanging out in the peak oil forums with the survivalists.
He talks about the importance of mandates.
Mandates force the pace of technical change, lower unit costs, and help businesses with their own plans for technical transitions.
Yeah, but let’s look at a real-world, real-time example of how well this idea is working out. The mandates for biofuels have poured billions upon billions of tax dollars (or more specifically, money loaned to us by China and Japan) down the national toilet (our car gas tanks). As discussed here untold times, contrary to standard talking points, these two agrofuels have no chance of bringing us energy security or of building a bridge to new biofuel technology. They are being used by politicians to buy votes.
Galbraith can argue his brand of economics as well as the next economist, but I doubt he has had time to keep up with the details of all topics. He may be unaware of how big the agrofuel debacle is and how bad it is going to get, both from a biodiversity standpoint and an economic one. He has probably never heard the argument that you should not destroy the planet’s carbon sinks and biosphere (by converting them into agrofuel monocrops) in an attempt to save them from global warming.
So the real test will be whether national decisions are made and enforced.
But what if the decisions turn out to be stupid, like corn subsidies, corn ethanol, cane ethanol, and biodiesel mandates (fuels that are helping destroy the last of the wild orangutans and are expanding soy and cane production into the Cerrado)? That is the heart of the problem with central control. A bad idea in the market dies and takes its investors with it. A bad idea in a bureaucracy can continue to suck money for decades.
It would start with tens of billions of dollars in research to determine what is feasible, what is socially tolerable, and at what cost … What then? Which new technologies would get taken up and how quickly?
Tens of billions of dollars into research is an idea I support. But this idea has a fatal weak link. Social tolerance and cost effectiveness can’t be determined in a lab. They can only be tested in a free market.
Mandatory changeovers in technology would follow.
Hold it. Recall what happened when the bureaucrats in California decided they could legislate into existence new technology called electric cars? Toyota tried to sell the RAV4EV, GM the EV1, Ford and Honda dipped their toes as well. Comments will soon follow parroting the various conspiracy theories explaining why those cars failed, but the bottom line is that the cost of the expensive battery technology available at the time has not gone down, but has actually tripled in the past few years. Who could have predicted that a two-seat, $40,000 car that could only move 100 miles a day would not be snapped up by hordes of consumers when they could buy, say, a five-person Ford Escort that cost $12,000 and could move 1,440 miles in one day, if the driver could stay awake for 24 hours.
Now extrapolate this attempt to legislate technology on a national scale.
Then along came the Prius. This car is the first example of what the free market can do when there is a consumer demand for a more environmentally benign product, and it could be the tip of the iceberg. Toyota couldn’t keep up with demand, yet the government gave me $3,000 worth of Chinese loan money for buying one that I was going to buy anyway.
Fuel efficiency, building efficiency, urban density, transportation modes, and requirements for renewable energy must all be part of the mix.
There are a number of ideas out there to increase personal-transport fuel efficiency by creating level playing fields for competitors in the free market. This is what government is supposed to do (trust busting, revenue-neutral carbon or fuel taxes, and so on).
But none of this will matter if we don’t stop using coal to make electricity. Put a price on carbon for electricity generation, remove government subsidies, and let the market find the best solution within the rules set up by the government.
The government is subsidizing the building of gigantic McMansions with mortgage tax breaks; yet another example of environmental degradation (urban sprawl, consumption of Canadian old growth forests, and energy use) exacerbated by government subsidies. It does not matter how much insulation you stuff into one of these comical displays of status. They will use far more energy in manufacture, maintenance, and use than a small home. End the government subsidies.
Housing codes where I live already stuff tremendous amounts of insulation into walls and ceilings and call for very high U values on all doors and windows. Gas furnaces are already 95 percent efficient. Mandated by government, the double-pane windows use twice as much glass and keep moisture out of the space between the panes by sealing them off from the atmosphere. But because nature abhors a vacuum as much as it does a pressure vessel, the seals in these windows will all fail someday and will have to be replaced.
And to ice the cake, because everybody wants windows, lots of windows, my local government has changed the rules, saying you can have all the windows you want as long as they have the allowable U value — which, given enough of them, could essentially nullify the extra insulation requirements. But this is just an example of government bending to give its citizens what they want, and it is also an example of the limits of government to mandate global-warming measures.
How do you end urban sprawl? Beats me. Make a game with rules and a level playing field and let the free market loose on the problem. Maybe remove some government-funded infrastructure outside a given radius of urban centers. Stop subsidizing the commutes.
Finally there was this pearl:
Of course, planning can be authoritarian, and planners make mistakes. Much of what goes into a national plan, especially at first, may be wasted. But so what?
So what? If my few examples of government bungling “on a grand scale” aren’t enough to give you pause, what will? A grander scale of bungling? And how long do you let them bungle? Ethanol subsidies are going into their fourth decade.
Let’s not make the same mistake the citizens of New Orleans made — counting solely on our government in its present degraded state of competency to protect them from a natural disaster. Frankly, I don’t think the politicians we have in office today are up to the challenge of global warming. If we can’t find a way to put higher caliber people into office, or at least to find a way to give better direction to those who are supposed to be giving direction, we are screwed. But that’s just my opinion, and none of those people would stoop to read my posts anyway.