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Category — Green Energy (fallacies of)

Fossil Fuels Improve the Planet

[Editor's Note: For the next several days, Master Resource will publish a series of posts with excerpts from Alex Epstein's book, Fossil Fuels Improve the Planet.]

“Humans have the untapped potential to radically improve life on earth by using technology, not to “save” the planet but to improve it for human purposes.”

The basic question underlying our energy policy debates is this: Should we be free to generate more and more energy using fossil fuels? Or should we restrict and progressively outlaw fossil fuels as “dirty energy”?

I believe that if we look at the big picture, the facts are clear. If we want a healthy, livable environment, then we must be free to use fossil fuels. Why? Because for the foreseeable future, fossil fuels provide the key to a great environment: abundant, affordable, reliable energy.

We’re taught in school that the key to a great environment is to minimize our “impact” on it. We think of our environment as something that starts out healthy and that we humans mess up. Not so. Nature does not give us a healthy environment to live in; until the fossil-fueled industrial revolution of the last two centuries, human beings lived in an environment that was low on useful resources and high on danger. [1]

Today’s industrialized environment is the cleanest, healthiest in history. If you want to see what “dirty” looks like, go to a country that is still living in “natural,” pre-industrial times. Try choking on the natural smoke of a natural open fire burning natural wood or animal dung—the kind of air pollution that has been almost eliminated by modern, centralized power plants. Try getting your water from a local brook that is naturally infested with the natural germs of all the local animals—the once-perennial threat that modern, fossil-fuel-powered water purification systems eliminate. Try coping with the dramatic temperature and weather swings that occur in nearly any climate—a threat that fossil-fuel powered air-conditioning, heating, and construction have made extremely rare.

We live in an environment where the air we breathe and the water we drink and the food we eat will not make us sick, and where we can cope with the often hostile climate of nature. That is a huge achievement—an achievement that lives or dies with the mass-production of energy. We can live this way only by getting high-powered machines to do the vast majority of our physical work for us. [2] [Read more →]

August 27, 2013   Comments Off

San Francisco’s ‘Green’ Energy Plan: Back-Door Coercion, Front-Door Costs

“I don’t think it’s the right thing to do to foist onto consumers … 20 to 30 percent higher energy rates in an opt-out program. If people want to spend more money … to buy green energy … that is terrific…. But to coerce them into doing it in an opt-out program … is the wrong approach.”

-   Mark Farrell, San Francisco Supervisor, 2012 (quoted below)

Thousands of San Francisco residents may be sucked into a green energy plan that will raise their electricity rates 77 percent without their knowledge or consent. Beginning next spring, half of the city’s 375,000 residential ratepayers will automatically be enrolled in CleanPowerSF – unless they take action to opt out of the program. Eventually the entire city will be enrolled in the program unless they choose to opt out.

Here is the sales pitch of CleanPowerSF:

Currently, you don’t have a choice in how PG&E selects your power. Your PG&E electricity is generated from a portfolio that includes carbon-emitting and nuclear energy sources like natural gas and nuclear power. CleanPowerSF will generate your electricity from a 100% renewable electricity portfolio. CleanPowerSF’s energy mixture will utilize resources like solar, wind, biogas and geothermal power, effectively the cleanest energy available in the United States.

City officials are hoping at least 90,000 households will choose to remain in the program — despite paying an average $18 more each month. That could be a safe bet, because many liberal, wealthy San Franciscans will embrace the opportunity to boast that their power is coming from a clean, green, renewable energy source.

Many residents, perhaps tens of thousands, who could not care less where their energy comes from may be stuck with a 23 percent total rate hike (the 77 percent commodity-charge increase averaged down by unchanged items such as transmission). They would be unaware of the change and not know about their option to get out of it–thanks to CleanPowerSF’s “Do nothing, and you will receive cleaner energy; it’s that simple” siren song. [Read more →]

November 26, 2012   4 Comments

Debating Greenpeace on “Green Energy”

On Thursday, October 13, 2011, I participated in a debate (on behalf of my Center for Industrial Progress) against a Greenpeace representative on the topic, “Green Energy: Economic Savior or Economic Suicide?”  Sponsored by CFACT, the event took place at the University of Texas at Austin, and was streamed on the Web. (The full debate will be produced professionally for general release, but for now a 90% complete version of the Livestream is available here. Also, my talk at Texas A&M on the same subject is available here.)
 
The debate covered a wide range of topics, including:
  • The economics of solar and wind.
  • The “green” opposition to nuclear power.
  • A free-market, individual rights approach to pollution.
  • Free-markets vs. central planning in energy.
  • The true meaning of “green energy.”
My opening statement (which was unfortunately not captured on tape) presented my take on these issues. [Read more →]

October 25, 2011   7 Comments

Behind the ‘Green Jobs’ Curtain: Economic Fallacies and Counterfacts

“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

- Henry Hazlitt, “The Lesson,” Economics in One Lesson. (1946, et seq.)

Solyndra’s impending liquidation, replete with 1,100 layoffs and U.S. taxpayer liabilities in excess of a half billion dollars, has put so-called green jobs initiative of the Obama Administration in negative light.

But make no mistake: recent loan guarantees from the U.S. Department of Energy to new solar projects to beat a September 30th funding cutoff is business-as-usual as the foes of oil, gas, and coal desperately seek business traction for an uneconomic energy.

From Climate Alarmism to ‘Green’ Jobs

With unemployment on the rise and new jobs scarce, politicians are keen to create employment, at least the visible kind that they can sum up for the public. And so yesteryear’s talk about addressing global warming (remember cap-and-trade?) has taken the back seat to policies geared towards restarting the sluggish economy.

Indeed, more Americans have grown skeptical about potential threats posed by climate change. According to a recent Pew Research poll, fewer Americans believe that global warming is a real threat than they did five years ago. A similar poll found that the top two priorities for Americans were the economy and jobs, while global warming ranked dead last.

So now, the sales pitch for forced energy transformation revolves around catch phrases such as the “renewable energy economy,” “green jobs,” and “leading the world in clean energy technologies.” In short, environmental policies have been rebranded as job creators.

What is a ‘Green’ Job?

Our report, The Dirty Secret Behind Clean Jobsreveals numerous flaws with this approach. The definition of “green jobs” is vague; green job subsidies are based on flawed economic principles; and assumptions for job growth are inaccurate or downright false.

One is the shifting definition of what is a ‘green’ job. Is a green job a new job that has been created by a new environmental initiative? Or when an existing job has been made more environmentally friendly? Maybe both?

And what exactly is ‘green’ and not ‘green’? Often this term itself is based on dubious assumptions about economics, environmental impacts, etc. Indeed, some green initiatives have turned out to be more damaging to the environment than the status quo.

For example, ethanol is seen as a renewable fuel; and thus, those involved in its manufacture have green jobs. But according to a recent report published by the EPA, refining ethanol can actually emit more greenhouse gases than gasoline. Green jobs are not always green. [Read more →]

October 6, 2011   3 Comments

“Green Job” Fallacies (Part II: What is a ‘Green’ Job?)

Even if there were a usable model to analyze job creation, we are left with the problem of identifying which jobs are actually “green.”  A renewable project can result in the employment of technical personnel trained to specialize in operating or maintaining its technology (whom we presume are green), as well as additional bartenders who will help the workers to enjoy their evenings (harder to classify as green).

The matter is important because any type of governmental or private spending might open up slots for bartenders.  Renewable technologies, however, have been viewed as the foundation for a massive increase in skilled workers whose human capital will provide them with higher lifelong earnings.

Two recent studies point up that the choice of definitions can affect estimates of the green workforce, and show that an extremely small fraction of jobs defined as green are in renewables.

Brookings Study: Bus Drivers, Trashmen “Green’

The Brookings Institution recently estimated 2.7 million jobs associated with the “clean economy.”  The categories include “Agricultural and Natural Resources Conservation” (18.9 %), “Regulation and Compliance” (5.3%), “Energy and Resource Efficiency” (31.0%), and “Greenhouse Gas Reduction, Environmental Management, and Recycling” (39.6%).[1]

The clean economy expands its bounds by creative classification.  Thus we find that energy efficiency includes 350,000 people in public mass transit, mostly bus drivers, and environmental management includes 386,000 people in waste management, formerly known as trash disposal.

The researchers chose not to use an alternative definition that would have been far more helpful to most readers:  how many clean jobs have (or will) come into being as a result of recent and proposed energy, environmental and climate regulations?  (And, of course, how many others will vanish.) [Read more →]

September 29, 2011   7 Comments

“Green Job” Fallacies (Part I: First Principles)

[Ed. note: The following is excerpted from Dr. Michaels's recent testimony before the Subcommittee on Water and Power. Part II tomorrow will examine how green jobs are defined by their proponents.]

It is rapidly becoming apparent that renewable energy is failing to produce the promise of painless prosperity embodied in “green jobs” that will simultaneously decrease unemployment rates and reduce pollution.  Begin with some principles:

1.  The proper goal of energy policy is to support the efficient provision of energy. 

The lower the cost of energy to the economy, all else equal, the higher will be job creation and economic growth outside of the energy sector.  Raising energy costs by forcing the use of uneconomic technologies that create more job slots will have exactly the opposite effect.  Put simply, more workers in energy reduce the production of non-energy goods and services.

2.  Any analysis of job creation by green energy must consider the simultaneous effect of job destruction.  

Policies that raise the cost of energy to households and businesses must leave them with fewer funds to spend elsewhere.  Such policies include the spending of tax revenues to support green activities instead of other government purchases or returning the funds to taxpayers.  To a first approximation the net effect of such programs on employment will be zero.  This is particularly important here because the new job slots are often visible, while the losses are dispersed among the thousands of goods and services that households and businesses will spend less on.  Jobs that cost more to create will generally have higher costs in terms of lost jobs elsewhere.

3.  Double counting of jobs and unrealistic assumptions about labor markets. [Read more →]

September 28, 2011   10 Comments

The False Promise of Green Energy (new Cato book packs a punch)

By Andrew P. Morriss, William T. Bogart, Roger E. Meiners, Andrew D. Dorchak

“This new work [289 pages] offers an outstanding, nearly unprecedented evaluation of claims by green energy and green jobs proponents that we can improve the economy and the environment, almost risk free, by spending billions of dollars on what are ultimately false promises.”

Energy affects everything we do. The late Julian Simon coined the term “the master resource” to describe energy’s crucial role in our economy. Nearly half of energy we use is used indirectly in the production of food, medicines, and consumer goods.

This is important because anything that increases the price of energy will also increase the prices of goods that use energy indirectly. Thus, if energy costs were to increase because of forced use of more expensive renewable energy, not only would the price of electricity rise, but so would the price of food, medicines, and consumer goods, such as cotton t-shirts. Those price increases would disproportionately affect the poorest.

The False Promise of Green Energy looks at the realities of energy production and use in the United States and the rest of the world versus the promises of green jobs’ advocates. The data in our book strongly suggests that green-job proponents have been peddling an unrealistic vision of energy production and use and are suggesting measures that will require either dramatically increasing the cost of energy or significantly cutting its use.

Either and both would reduce living standards. The impacts globally would be even worse, as increasing energy use generally, and increasing use of electricity in particular, is an important way to improve the quality of life for people in developing economies.

Picking Losers

The best way to encourage development of new technologies is not for the government to select some favored ones and subsidize them. Governments love to do this, because it allows politicians to hand out money to special interests. [Read more →]

February 25, 2011   14 Comments