The New Dirty Word in Green Energy
There’s a new dirty word in green energy: rent seeking.
Rent seeking, for those who missed the bank bailouts, is the act of manipulating the market or regulatory structure in order to earn profit.
The criticism has been leveled at every major player in the sector in the past month.
Exelon and other power companies bail on the U.S. Chamber of Commerce over its opposition to climate change legislation – rent seeking.
George Soros announces plans to invest $1 billion of his money in the sector and also give $10 milllion a year to establish a think tank called the Climate Policy Initiative – rent seeking.
T. Boone Pickens advocates for natural gas and wind power, both areas in which he has considerable investments… you get the picture.
Is this a fair criticism?
Certainly, cap and trade as currently conceived will not be hurt by companies and investors lobbying for legislation more favorable to them.
The benefits of the cap and trade system, as opposed to, say, a carbon tax, is that the way in which the allowances are allocated has no impact on the total emissions or the total cost of the program, according to Harvard’s Robert Stavins.
Or, in the words of The Atlantic’sConor Clarke, “A cap and trade bill that gives all the permits to Donald Trump will be just as effective in reducing emissions” as a more equitable method.
But, Sayanythingblog protests, why are those who lobby the government to create demand for their green technologies any better than oil companies who lobby to open up new land for drilling so they can use new pumping technologies?
I suppose you’d have to first accept that global warming is real and oil contributes to its accleration.
Then it becomes clear that government isn’t artificially creating demand for green technology so much as it is fully accounting for the costs of fossil fuels. The playing field suddenly tilts in favor of green energy.
With the emissions levels preordained by the cap, companies can fight for a piece of the pie without hurting the system.
It sounds like a model of capitalism: individual greed leading to collective good. Let’s hope it works out that way.