From Realitybase ("And stay out of my damn yard!"):
Now I remember why I started this blog: To push back against public policy ideologies that are flatly contradicted by real world facts and/or which proponents will not quantify, test against alternatives, or accept accountability for results. Hence the subtitle to this blog: "The trouble with people is not that they don't know but that they know so much that ain't so." So far, I haven't changed the world—or the proprietors of Environmental Economics. Here's a good example of what pragmatic, problem-solvers are up against.
Yesterday, Environmental Economics posted The case for cap-and-trade (or a carbon tax) in 2009. I posted the following comment, starting by quoting the only reference in the post to policies not involving attempts to achieve policy goals by manipulating price signals.
"[F]orcing electric utilities and other entities that buy energy to purchase a mix of energy without appropriate price signals is not a good idea."
Why not? We've done a lot of this in the last 35 years or so, including the requirement that utilities buy electricity from co-generation projects at "avoided cost." The amazing achievements of the Clean Air Act and State analogs all resulted from command and control regulations with nary a price signal. Surely, you're not proposing to replace tried and true methods with an untested method without at least a comparative discussion. Or are you?
One of the proprietors, John Whitehead, responded this morning.
Roger,
The forced demand will increase the price of renewable energy. The decreased demand for dirty nonrenewable energy will decrease its price. The prices are moving in the opposite direction of where they need to go to provide the appropriate signals to energy consumers about the full social costs of the energy sources. Consumers will want to buy less green energy and more dirty energy. I don't know how all that would play out since it is not exactly textbook theory but there are some definite inefficiencies in that scenario.
And a sarcastic answer to your question: Yes, i'm suggesting we have no discussion. I'm that sort of dick.
And that's why we started a blog (with open comments). To limit discussion!
"To limit discussion." And yet in the sidebar is this invitation, which I now assume is meant only to offer talking points to those who already agree with their ideology, not to engage skeptics. [pointing to our "Answer Desk" link]...
On the substance of Whitehead's response (in which he quotes himself in italics) I continue to find it astonishing that educated people will propose big changes in government policy affecting us all while admitting they "don't know how all that would play out" and that there are some "definite inefficiencies" in their proposals.
Roger misreads the post and, I think, doesn't understand sarcasm. The definite inefficiencies are due to the RPS which might drive the price of renewable energy up and nonrenewable energy down -- exactly the opposite directions that we wish them to go.
In response to the original comment [and, folks, sorry that I don't have time to respond in depth to every comment in a timely manner ... I'm not a paid blogger]: command and control regulations have been shown to be less cost-effective than economic incentive-based policies such as taxes and cap-and-trade. This is why most economists prefer using incentives instead of standards.
More from Realitybase:
My public policy proposal (and yours) should be tested in a process that completely and accurately describes the problem to be addressed, considers all possible solutions (especially those that have been tested in the real world), identifies all significant costs, benefits, and collateral effects, and commits to quantified predictions for which we should be held accountable. But you may disagree with that.
Cap-and-trade has been tested in the real world (e.g., see the EPA's Acid Rain Program). The research has been conducted ... and recently summarize here: Review of Environmental Economics and Policy, Winter 2009.
Note to readers: I rarely, if ever, say anything that has not been in the literature. I'm not that creative. Yet, I'm too lazy to provide references to the literature in my posts.
