A Free-Market Energy Blog

Horwitz vs. Kiesling on Climate (social science matters too)

By Robert Bradley Jr. -- October 3, 2023

” … we have to acknowledge that property rights in climate *cannot* be defined fully and we thus have to find some shared institution for governing the climate commons and managing emissions.” (Kiesling)

“One can think humans are causing the planet to warm but logically and humanely conclude that we should do nothing about it.” (Horwitz)

Lynne Kiesling is an electricity specialist who describes herself as working in the classical liberal tradition. Problem is, she refuses to define what classical liberalism or a free market is in regard to electricity. She instead endorses central government planning for the wholesale grid, among other Statist proposals. [1] In so doing, she ignores how the traditions she espouses argue against her positions (Hayek on central planning, Coase on transaction costs, Public Choice on politicization, etc.).

How can an alleged classical liberal believe there cannot be effective private property rights to the grid? [2] How does she square her views about “market failure” to her “synthetic theory of regulation“? If only she could elaborate rather than obfuscate and then disengage….

Channeling Horwitz

Kiesling recently wrote on Substack: “To set this stage I’m channeling the wisdom and insight of my dear, departed friend and excellent economist Steve Horwitz. Steve’s been gone for two years and I miss him every day.” This is part of her charm offensive to the wider free market community. [3]

But does she take Horwitz to heart? Not when it comes to climate change and public policy.

Kiesling as Climate Activist

One problem with Kiesling as a “classical liberal” is her uncritical acceptance of climate alarmism and lack of criticism toward government-forced energy transformation (“low-carbon solutions,” in her politically correct language). It undergirds her activism in electricity away from the reliables to the unreliables (the virtual power plant) where batteries and her “real time pricing” (read: governmental rationing) come in. She is a “woman of system,” a technocrat, when it comes to one of America’s most essential industries.

So what does she think of carbon dioxide (CO2) emissions? In hushed tones, she assumes that CO2 is a pollutant, a negative externality, creating a global commons problem. Her views came out in response to a post by Tyler Cowen, Green energy vs. green jobs, summarizing his Bloomberg column, We Need Green Energy. We Don’t Need Green Jobs. (April 14, 2021).

Here is our exchange:

Kiesling: Tyler [Cowen] is right. The focus should be on innovation that makes green energy cheap. If green energy creates value, then the jobs will follow. But the value creation has to come first.

Bradley Energy density and intermittency pretty much doom so-called green energy. The world, for most of history, was 100% ‘green’ energy. Then came mineral energies and progress. https://www.aier.org/article/w-s-jevons-1865-on-the-limits-to-renewables/

Kiesling: First, we have to acknowledge that property rights in climate *cannot* be defined fully and we thus have to find some shared institution for governing the climate commons and managing emissions (read Ostrom). All forms of internalizing that external cost will be imperfect and involve rent-seeking, so we have to be creative and design mechanisms that manage the physical, economic, & political tradeoffs. By failing to do so, we’ve ended up with RPS & other policies that create even more deadweight loss than a simple emissions tax would.

Second, the production costs decline & increased energy efficiency for renewables in the past decade has been astounding, and that’s what’s driven investment. You should look at the LCOE analysis I shared with Anna below, and there’s more recent research on wind: look at the experience curves they estimate. https://onlinelibrary.wiley.com/doi/10.1002/wene.398 Your focus on the PTC can’t explain that change; it’s small and it started in 1992, so can’t be causal for recent changes. RPS might play a role by increasing demand.

Like you, I’m opposed to subsidies & command-&-control regulation; unlike you, I put weight on the value of the varied attributes of different energy resources.

Bradley: Thanks for this explanation. We disagree on many points here, beginning with the premise that CO2 is a clear pollutant necessitating global government mitigation. And perhaps ending with Public Choice on the futility of nearly 200 sovereign governments addressing the alleged problem. Market adaptation to weather/climate change is the simple, best, and really only ‘climate policy.’ There is much more–I will address it in a future post at MasterResource.

I see no avenue for classical liberals to take other than to challenge the forced transformation from dense, reliable mineral energies to economically inferior/eco-negative dilute, intermittent resources. Classical liberals should also challenge climate doom/exaggeration that totally rejects the global lukewarming, truth-is-in-the-middle view.

She did not respond further (her typical style–assert vaguely and disengage).

Any classical liberal or intellectually inclined person should not assume the climate emergency but debate it. Judith Curry, not only Elinor Ostrom, should be Lynne’s role model and mentor in this area. [4] This debate should not be ducked to be politically correct or relevant. Check the statistics about extreme events provided by Lomborg, Pielke Jr., and others. Do consider the benefits of carbon dioxide emissions and increasing atmospheric concentrations.

So why is global climate a “commons problem”? And how in the world can nearly 200 sovereign governments be expected to approach anything like the examples of an Ostrom “commons problem.” [4]

Steve Horwitz to the Rescue

If Lynne Kiesling is serious about the economics and politics of climate change, she should directly confront the check list of the late “excellent economist” (her words), Steve Horwitz. Starting with Point 4 on his list:

4. What are the costs of global warming?

5. What are the benefits of global warming?

6. Do the benefits outweigh the costs or do the costs outweigh the benefits?

7. If the costs outweigh the benefits, what sorts of policies are appropriate?

8. What are the costs of the policies designed to reduce the costs of global warming?

He warned about climate policy:

So if in our attempt to reduce the effects of global warming we slow economic growth so far as to impoverish more people, or we give powers to governments that are likely to be used in ways having little to do with global warming, we have to consider those results in the total costs and benefits of using policy to combat global warming. This is a question of social science that is no less important than the scientific questions I began with.

to conclude:

“[I]t is perfectly possible to accept the science of global warming but reject the policies most often put forward to combat it,” Horwitz concluded. “One can think humans are causing the planet to warm but logically and humanely conclude that we should do nothing about it.”

Lynne has bragged about her “synthetic theory” of electricity regulation. If she has put serious thought into a “synthetic” view of global government and CO2 emissions, she should tell us all about it. And not walk back to the dugout at two strikes.


[1] Kiesling’s implicit endorsement of the wind/solar takeover of the grid has led to the problems that she now wishes to cure with the “virtual power plant:” open-ended wind, solar, and batteries on the supply side are complemented by smart meters in the home to ration demand via price or another metric. Obviously, a free market would bypass such statism-on-stilts with, most likely, two-part pricing to handle ‘peakiness’ in an obligation-to-serve capacity.

[2] Kiesling argues rather astoundingly: “… the grid is a common pool resource in which it is literally—literally—impossible to define and enforce property rights.”

[3] Lynne has complained that my criticisms of her policy positions and evasion is “grotesque” and “has lurched from your more typical passive aggressiveness to outright aggressiveness.” Such psycho-analytics is ad hominem to a greater degree than my criticisms. So I go on the record by noting that her “charm offensive” has camouflaged her Statism from a lot of classical liberals who would otherwise know better or ask her serious questions. I will leave the psycho-analysis of her in this regard to others.

[4] A future post will contrast Ostrom’s criteria for a “commons problem” with anthropogenic climate change.

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