New Approaches on Energy and the Environment: Policy Advice for the President, Richard D. Morgenstern and Paul R. Portney, Editors, Resources for the Future, Washington, DC, 2004
I am a fan of materials provided by Resources for the Future, and this book was right in line with my reasons for trusting RfF. My goal was to beef up the energy side of my Energy and Environmental Economics course. Policy discussions of energy and environment can tend towards the hysterical, at least from an economic perspective. Doom and gloom dominates the Worldwatch Institute and makes for tiring reading. These tracts remind me of the (very) old joke, what’s the difference between an environmentalist and a watermelon? One is green on the outside and red on the inside, the other is green on the outside and red on the inside. Furthermore, environmentalists can tell you what they’re against, but not what they’re for.
On the other pole, free market environmentalism is not enough for many who are drawn to energy and environment. RfF can be counted on for a more temperate perspective than either of the poles, without falling prey to Harry Truman’s lament for a one-armed economist, in place of “On the one-hand, on the other hand”. The writers present what they are for. However, the modesty of the majority of the proposals did make me yearn for some less obvious suggestions. And there is a tendency to soft-peddle the cost of government solutions.
Part I centers on Energy and Climate. I was more interested in energy proposals aside from climate change, with the plethora of climate change writings. Two energy proposals are “Slaking Our Thirst for Oil,” by Ian Parry and Joel Darmstadter, and “Stimulating Renewable Energy: A “Green Power” Initiative,” by Darmstadter. The first proposal came up short, as the authors call for a modest tax on oil, perhaps with a reduction in the income tax to overcome the political liability of any tax increase, along with somewhat greater use of the Strategic Petroleum Reserve. The authors prefer these changes to an emphasis on greater supply. It wasn’t what I had in mind for such a headline issue.
I did appreciate the “Green Power Initiative”, the Renewable Portfolio Standard. Here, the strength of the RfF approach comes through. After setting forth this program, which is the type of program that is sufficiently new that it might not make it into the typical textbook, Darmstedter raises concerns and then allays those concerns. Why not rely on a voluntary program? For example, consumers can opt for contributing to “green power,” but it is well known that voluntary contributions to a public good are subject to free rider problems. Nor would electric utilities necessarily invest in something of uncertain duration. And private R & D is also subject to free-rider problems, unless it can be protected by patent or copyright. So the market alone is not likely to solve the problem, although here free market environmentalists might suggest that RfF does not take a hard enough look at the imperfections of government, which could lead to greater inefficiency if the program is subject to political pressure—what renewables qualify-- and inefficient operation—size of staff, salaries, and who gets the jobs.
Climate change proposals were the usual variety--a carbon-emissions cap, emissions trading and support for R & D, and a carbon tax, offset by a reduction in other taxes.
The other parts of the book address “Environment, Health, and Safety,” “Natural Resources,” and “Information Decision Frameworks”. Burtraw and Karen Palmer propose, in “Cleaning Up Power Plant Emissions”, focusing on particulates, and on a multiple pollutant approach. Road pricing and pay-as-you go car insurance are proposals that are typical of the proposals that are occasional in today’s public policy, and might be worthy of a gradual increase in their use. Kate Probst encourages more efficient use of Superfund dollars, while Kris Wernstedt similarly endorses a more forgiving approach to cleanup of contaminated properties known as brownfields. Of the Natural Resource proposals, I found only “Zoning the Oceans” to fit with my interests, a bolder idea than most in this book of restricting certain portions of the ocean to certain uses, such as ecosystem management or marine reserves. I do not typically associate proposals on space missions and antibiotic resources as the types of natural resources in most courses. The final section on Information Decision Frameworks is the most mundane, although the call is legitimate. James Boyd and Leonard Shabman want more water data collected, Spencer Bahnhof wants a Bureau of Environmental Information, and so on.
In all, I found the book useful as a classroom complement to what you get in textbooks, by advocating approaches not yet adopted. The four page synopses were sufficient for conveying the proposal. The modesty of the proposals is appropriate given the modesty of environmental policies in recent years. More radical proposals might be DOA. Still, do not expect scintillating reading if you read the book for your personal use, as someone comfortable with the RfF approach will say “Duh” at the various applications of emissions trading approaches, emissions taxes, and relatively benign government intervention.
