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Government is Stalling Clean Energy Innovations

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Greek Prime Minister Alexis Tsipras (2nd-R) and other delegates attend the inaugural session of the COP 21 United Nations conference on climate change, on November 30, 2015 at Le Bourget, on the outskirts of the French capital Paris. Photograph by Eric Feferberg — AFP via Getty Images

As world leaders convene this month for the Paris Climate Conference (COP21), advocates for greater government intervention in the global energy markets need to recognize the vital role that energy provides to human development and the ultimate well-being of millions around the world.

When addressing the use of fossil fuels in particular, words too often outpace and distort reality—that is, these fuels are and will continue to be the lifeblood of a modern society. First and foremost, affordable, reliable, and abundant energy improves the quality of life for everyone: It keeps the premature baby alive in the incubator; it provides access to clean, affordable drinking water; and it allows parents living paycheck to paycheck to feed their families and have proper healthcare.

Duplicating these conditions in underdeveloped regions of the world should be the mission of all leaders, both public and private. But it’s a mission that can only be realized in present time and for the foreseeable future through the use of fossil fuels—fuels that currently provide 87% of our domestic energy supply, in big part, because of private sector innovation.

Without basic agreement on this imperative, there can be no reasonable outcome. The thought of forging a comprehensive global strategy that condemns most of the world’s population to a paucity of energy supply simply cannot be tolerated, and it certainly will not happen. It’s naivety at best to believe so. Secondly, to suggest that the U.S. should “lead by example” and forge a program to drastically limit our use of fossil fuels is reckless posturing. Any strategy or program must be dedicated to improving people’s lives. Preventing people access to energy sources abundantly available today would have the opposite effect.

There are some who feel the government needs to impose a carbon tax on energy companies in order to spur the private sector to invest more heavily in the research and development of renewables. While this thinking may be well intentioned, it lends itself to government subsidizing and mandating inefficient alternatives. Such a tax would do much more harm than any good.

We need only to look back to the Great Recession in 2008 for examples of private-sector solutions that emerged without government mandates. During this timeframe, we experienced a massive reduction in economic activity, resulting in a noticeable—but not overwhelming—decrease in carbon dioxide emissions. However, this dramatic economic downturn also caused severe hardship for many Americans, a hardship that far surpassed the commensurate reductions in CO2.

If fossil fuel use were to be restricted as demanded by some in favor of government-preferred alternatives, you could undoubtedly expect far worse economic and societal struggles. Substituting capitalism with government intervention to solve any problem is a recipe for corruption and disaster. Moreover, such an approach would harm individuals such actions intended to help—the least fortunate among us. Government intervention—picking winners and losers in the marketplace—has consistently proven government’s penchant for picking losers.

Another change we saw during this same timeframe was the development of shale natural gas. This private sector innovation—a tectonic shift accomplished with no government help—led to a reduction in CO2 emissions while reducing energy costs for consumers and creating high-paying jobs. Private sector innovation, American ingenuity, and a spirit of entrepreneurism have led to some of the greatest advances we all enjoy. After all, I do not recall a tax or outright ban on typewriters leading to the development of the personal computer. As we move forward, let’s have a constructive debate and carefully consider what choices will make people’s lives better and what assets will be most impactful.

The private sector can—and is—investing heavily in energy alternatives that will provide us with a robust energy future. And while the government should encourage such innovation, it must get out of the way so that these innovative alternatives can develop in line with market demand—not mandate.

 

Charlie Drevna is a senior fellow at the Institute for Energy Research. He was formerly president of the American Fuel and Petrochemical Manufacturers.