Guideposts for Energy Policy in 2013

Christopher Hankin photo

This blog was originally posted on the DESSC website.

With the Paul Ryan announcement this weekend, the partisan messaging on energy policy ratcheted up further.   To recall what 2013 should be about on energy policy, I spent lunch glancing again at two recent documents: Senator Murkowski’s June 5th speech at GWU, and an ITIF report also from June.

The Senator notesthat our fundamental goals should be to make energy “as abundant, affordable, clean, diverse, and secure as possible.”   She then describes six characteristics that she believes should be kept in mind in developing policies to achieve these goals.   Her description of these characteristics deserve reading in their entirely, but my cliff notes version is:

  1. The committee process matters;
  2. The policies should be balanced;
  3. There are hard decisions to be made on the federal government’s role;
  4. The policies should pay for themselves;
  5. The price of energy shouldn’t increase; and,
  6. There should be a Senate floor debate. 

 

A particularly interesting comment on #2 is this: “To find success, we will need to pair legislation that increases oil and gas production on federal lands with legislation focused on innovation.”

The ITIF report is the one authored by Matthew Stepp and Rob Atkinson, entitled “Green Mercantilism: Threat to the Clean Energy Economy.” Again, I recommend a thorough reading, but the paragraph I’ll highlight here is this,

 “If the goal is to create a global energy system that is largely carbon free, continual dependence on subsidies, whether domestic and legitimate or foreign and mercantilist, is not the way. Driving innovation is. While green mercantilist practices may boost short-term deployment, these practices reduce the incentives and ability of firms, especially more innovative ones in the United States and other leading nations, to invest in fundamentally better clean energy technologies. As a result, a global clean energy industry propped up by green mercantilist policies may not only produce near-term growth in lower-quality, higher-cost technologies that cannot compete with fossil fuels without sustained government subsidies, it also makes it much more difficult to develop more advanced and competitive alternatives.”

In sum, we can’t subsidize ourselves to a clean energy economy.  We can innovate our way there, and Senator Murkowski has offered ideas for an appropriate policy construct.

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