“It is encouraging that eco-modernists ‘reject the planning fallacy of the 1950s.’ However, they still ’embrace a strong public role in addressing environmental problems and accelerating technological innovation.’ So their rejection of top-down development and innovation is only partial.”
The New York Times has published a remarkable article. Remarkable for the Times, that is. It has taken to task the United States and other developed countries for engaging in heavy-handed eco-imperialism.
The impetus for the article is a new infrastructure development bank being created by China that will begin operations at the end of the year. Such a bank could, as noted by the Times, rival the World Bank and other development banks controlled by the United States. Indeed, the Obama administration initially encouraged countries not to join the bank, arguing that it could undermine the World Bank. …
“The difficulty in getting people to participate in the federal weatherization program, even with significant incentives and strong encouragement, as well as the negative private and social rates of return realized, suggests that extent of the market failure, if it exists at all, is substantially overblown.”
Government intervention in the name of energy efficiency provisions often enjoys bipartisan support. Relying more on engineering than real-world economic analysis, proponents argue that there is an energy efficiency gap in which individuals and firms forego such investments that would provide both private and social benefits, the latter via negative externalities associated with energy use.
Government programs, it is argued, can eliminate this market failure. But like most government programs, the benefits of government-driven energy efficiency are often far less than promised.
Market vs. Government Decision-Making
Investing in energy efficiency can be beneficial. …