Thursday, November 19, 2009

Tom Friedman on being a clean-energy hawk

Tom Friedman frequently writes about clean energy. Here he argues that
the best way to launch E.T. [energy technology] is to set a fixed, long-term price on carbon — combine it with the Obama team’s impressive stimulus for green-tech — and then let the free market and innovation do the rest.
Most of the column is about why it's in our financial and political interests to invest in clean energy.
What happens [otherwise] is that the price of oil goes through the roof … The petro-dictators in Iran, Venezuela and Russia … get richer.
I tend to agree with Friedman. But making his case an economic one requires that he justify interfering with the markets. If it's so obvious that developing clean energy is a financial win, why isn't the free market already doing it? Are the people who want to make money so dumb that they don't see what he sees? Why do we need a carbon tax at all?

Perhaps one could argue that profitability is too far in the future, that only those with very deep pockets can afford to invest in clean energy now, and that if we don't the Chinese will—and will leave us in the dust when the time for clean energy arrives. But he hasn't made that point. Or perhaps he can argue that the free market is too short-sighted to see as far ahead as is necessary to invest in clean energy—and that the necessary development will take so long that when we need it we will not have the time to develop it. But he hasn't made that case either.

Appealing to the power of the free market to develop the technology if only it is subsidized by government tax policy somehow doesn't seem like a completely cogent argument.

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