“In a 2014 ‘EV Everywhere Grand Challenge’ study, the US Department of Energy finds that the current battery cost is $325 per kWh. At a battery cost of $325 per kWh, the price of oil would need to exceed $350 per barrel before the electric vehicle was cheaper to operate.”

– Covert, Greenstone, and Knittel. “Will We Ever Stop Using Fossil Fuels?” Journal of Economic Perspectives (30(1), 2016): p. 132.

In the marketplace for ideas, economists are always selling. We see a situation that everyone knows is imperfect, point out the exorbitant costs and likely mistakes on the road to Nirvana, assure our audience that in any case the market can likely manage things better than government. And we hope someone accepts our research and clients retain our consulting services.…

“Price controls cause shortages, and government allocation exacerbates it. This was learned the hard way during the 1970s, particularly with oil, thanks to Republican President Richard Nixon.”

George Melloan’s review of Jane Mayer’s Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (Wall Street Journal, January 15, 2016) criticized her foray into energy and energy policy:

Ms. Mayer might herself benefit from an economics course. She writes that Richard Nixon imposed economic controls on oil and gas in 1971 to “address the energy crisis.” The Nixon price controls helped to cause the energy crisis.

Intrigued, I bought Dark Money to see exactly what she said.  Here is the passage from Mayer (p. 91) referenced by Melloan:

The fossil fuel industry’s fondest wishes were also fulfilled.

Previous posts at MasterResource have documented the lack of open intellectual inquiry at Resources for the Future (RFF) regarding the physical science of climate change and the case for government-led transformation of energy sources.

A third post yesterday documented RFF’s buy-in to resource pessimism and gapism (more government intervention in place of price and allocation decontrol) in the pivotal 1970s.

Trends can change. They should change. RFF as a scholarly organization should:

1. Recognize the physical science of climate change as highly unsettled and thus open to contrary public policy positions.

Implication: Consider ‘global lukewarming” as a base case for economic analysis.

2. Recognize the benefits, the positive externalities, associated with the anthropogenic influence on climate.

Implication: Open a research program on the benefits of carbon dioxide emissions/concentrations, not only costs, as has been the case with RFF’s analytics to date.

“Your paper inspired me to re-review some of the congressional testimony of the renewable interests to see whether the litmus test of success was a cost target or more generally, competitiveness and market penetration. I think it is clearly the latter.”

“Imagine the coach of a football team justifying a perennial losing record by telling the administration that his players are getting bigger and faster …. Surely the administration would respond—’yes, we know the general trend and our participation in it. But we want real victories, not moral victories’.”

– Letter from Robert Bradley to Dallas Burtraw, January 1999.

It was arguably the very top intellectual research paper to justify past and continuing U.S. government support for renewable energies at the time of its publication (1999). I had a chance to rebut, working at Enron (as director, public policy analysis) that was a financial supporter of Resources for the Future (RFF), as well as a business leader in renewables.…