Defending Big Government - Or Why We Can’t Leave Energy Innovation to Markets
Marc Gunther, the excellent Fortune magazine and GreenBiz.com writer and fellow blogger at the Energy Collective, published a piece last week skeptical of the Obama Administration’s new push to support the commercialization of advanced batteries in the United States and help accelerate the day when efficient plug-in hybrid electric vehicles are rolling off American assembly lines and parked in a driveway near you. At issue is $2.4 billion in new funding made available by the U.S. Department of Energy to support advanced battery commercialization and manufacturing.
Gunther quotes a Wall Street Journal article that shares his skepticism of this new funding, which will (in their words) “annoint” new technological and corporate “winners” — something the Journal clearly sees as an unnecessary intrusion of government on free markets. Gunther agrees, writing:
“They’ve got a point, though, don’t they? One unhappy result of all the bank bailouts of the fall is that $2.4 billion doesn’t seem like much–hey, Citi alone has collected north of $45 billion, last time I checked–but a billion here, a billion there, and you’re starting to talk real money. And if electric cars are going to be as big a business as a lot of people think, then why government investment should be needed at all? Particularly since we have a climate change bill making its way through Congress that will, at long last, if all goes well, put a price on carbon emissions–thereby giving low-carbon energy sources what they desperately need, which is a fighting chance to compete with fossil fuels on something resembling a level playing field. I thought the whole idea behind cap-and-trade (which I strongly favor) is to capture the externalized cost of global warming pollutants, and then let the market figure out how best to reduce greenhouse gas emissions: regulation that would have a light touch but a profound impact.
But no–with Waxman-Markey, CAFE standards, biofuels mandates, subsidies for “green jobs” and the like–the administration is giving us a belt and a couple of pairs of suspenders, too. Much as I admire Steven Chu, the energy secretary, do we really want to entrust him and his staff to decide which battery technologies are likely to succeed and which companies can most wisely spend that $2.4 billion?”
And as much as I respect Marc Gunther, I quickly took issue with this pretty classic set of objections to government involvement in technological development. I wrote this response, which Gunther dubbed “Defending Big Government,” and was happy to post at his personal blog and at GreenBiz. It has now been syndicated at The Energy Collective and at Reuters as well. Here it is for Breakthrough readers:
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Marc Gunther, the excellent Fortune magazine and GreenBiz.com writer and fellow blogger at the Energy Collective, published a piece last week skeptical of the Obama Administration's new push to support the commercialization of advanced batteries in the United States and help accelerate the day when efficient plug-in hybrid electric vehicles are rolling off American assembly lines and parked in a driveway near you. At issue is $2.4 billion in new funding made available by the U.S. Department of Energy to support advanced battery commercialization and manufacturing.
Gunther quotes a Wall Street Journal article that shares his skepticism of this new funding, which will (in their words) "annoint" new technological and corporate "winners" -- something the Journal clearly sees as an unnecessary intrusion of government on free markets. Gunther agrees, writing:
"They've got a point, though, don't they? One unhappy result of all the bank bailouts of the fall is that $2.4 billion doesn't seem like much--hey, Citi alone has collected north of $45 billion, last time I checked--but a billion here, a billion there, and you're starting to talk real money. And if electric cars are going to be as big a business as a lot of people think, then why government investment should be needed at all? Particularly since we have a climate change bill making its way through Congress that will, at long last, if all goes well, put a price on carbon emissions--thereby giving low-carbon energy sources what they desperately need, which is a fighting chance to compete with fossil fuels on something resembling a level playing field. I thought the whole idea behind cap-and-trade (which I strongly favor) is to capture the externalized cost of global warming pollutants, and then let the market figure out how best to reduce greenhouse gas emissions: regulation that would have a light touch but a profound impact.
But no--with Waxman-Markey, CAFE standards, biofuels mandates, subsidies for "green jobs" and the like--the administration is giving us a belt and a couple of pairs of suspenders, too. Much as I admire Steven Chu, the energy secretary, do we really want to entrust him and his staff to decide which battery technologies are likely to succeed and which companies can most wisely spend that $2.4 billion?"
And as much as
I respect Marc Gunther, I quickly took issue with this pretty classic set of objections to government involvement in technological development. I wrote this response, which Gunther dubbed "Defending Big Government," and was happy to post at
his personal blog and at
GreenBiz. It has now been syndicated at
The Energy Collective and at
Reuters as well. Here it is for Breakthrough readers:
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