This Morning’s Interview with Jerry Taylor at the Cato Institute
I just interviewed Jerry Taylor of the Cato Institute for my next book, Renewable Energy – Following the Money. This was a wonderfully engaging talk of about 90 minutes with a brilliant person, which I have time only to summarize here.
In one way, I can say that there were no real surprises. Jerry calmly explained that clean energy either becomes affordable, and capitalists invest, or it’s not, and it sits on the sidelines. And given the fact that Cato’s mission statement is the forwarding of Libertarianism, how can anyone be shocked by that position?
The interesting part, of course, whether you’re a Libertarian or a Communist, is understanding the damage that fossil fuels are doing, and using government protection of the people to step in and make a difference. Libertarians believe in minimal government, though they acknowledge its role in protecting individual’s rights. E.g., I have no more right to pollute the air over your house than I do to throw my garbage in your front yard.
So, with all this philosophic agreement in place, why is the Cato Institute so bearish on renewable energy? First, it’s about pinning down the damage. They seem to believe that the externalities of oil and coal are minimal, as compared to most of the reports I’ve read. Jerry says, for instance, that the recent report from the Harvard Medical School estimating the health and environmental damage of oil and coal at $700 billion annually was “a bad study.” Also, though he acknowledges that industrial activities are causing global climate change, he thinks that the effects of this will be minimal, and not felt until far in the future. In addition, he finds it even harder to know who is benefiting and who is suffering.
Really? Do we have to split hairs here? What’s the matter with looking at this and concluding the obvious, like the oil companies are the most profitable industry on Earth, and the other seven billion of us are suffering. Not so fast, says Jerry. The developing countries near the equator are likely to be hit hardest by global warming, but they have also benefited the most from industrialization.
I don’t know, Jerry. I enjoyed the conversation, but this sounds like sophistry to me.
Here I go, about to say the same things I’ve said countless times before. When I began MY push toward more RE, it was mostly to become more independent especially from utilities, to be more ready when fossil fuels began running out and/or becoming suddenly more expensive. We know petroleum will be the first fossil fuel to become depleted so my biggest focus has been reducing my needs for petroleum. I’ve cut abt 60% of my annual use since the 1970s.
My other “agendas” were to avoid as much coal and nuke responsibility as possible, since each of those represent huge threats, full of nasty history including in my own family. Not just talking about global warming. We’ve had huge coal-related and nuke-related catastrophies in my lifetime, and I’m only 57. I certainly expect we’ll see more, whether or not associated with climate change.
To achieve my objectives of reducing my own use of and association with oil, coal and nuke, I’ve pushed myself, my household and business to use far less conventional energy. Accomplished most of my 50% household cuts in last 2 homes via efficiency and lifestyle changes. Also applied some RE, namely daylighting, solar heating and cooling, solar water heating and a little PV. In other words, new RE energy supply was the minority of what I did.
We should think of this as positive, since most people can’t afford a lot of RE. Conservation and substantially better energy efficiency are WAY CHEAPER than all kinds of RE except daylighting. And by learning and applying as much conservation and efficiency as possible, I’ve lowered substantially how much RE I need. As my best example, I was able to buy 75% less RE equipment for my off-grid office (in Nov 2001) because I cut my office electricity use by almost 80% first! Overall transition done with conservation and efficiency first cost 50% less than doing RE first. Only half that cost related to the solar.
Don’t be shocked, but I am also libertarian, so I understand CATO. Libertarianism is an American thing. A very strong part of our Constitution is about individual rights and responsibilities, also INDEPENDENCE and liberty. We are not independent when we depend on governments, utilities and corporations to do stuff for us. I derive a substantial amount of pride and pleasure by doing as much stuff for myself as I can. I installed my own off-grid PV system, which not only made me feel good, but also taught me a lot which now helps me in my energy consulting biz. Similarly, I designed and installed my last 2 passive solar additions (last 2 houses got those). Didn’t design or install my 1st solar water heating system at last house, but I did design all and installed 50% of the solar water heating system on my current house. All this made me a happier person in the doing as well as the enjoyment of using solar energy whether heat or light or electricity. I KNOW each of my solar systems, from drawings and calcs to nuts, bolts and wires.
Sure our nation is full of subsidies nowdays, especially the energy industry. But this isn’t a necessity. We didn’t begin to use conventional energy because of subsidies. And most of us don’t become energy guzzlers because of subsidies. These are cultural matters as much as anything. It was a cultural shift in my own mind which pushed me toward less fossil fuels, toward more conservation, efficiency and RE.
If we want an American culture of independence (aka “less dependence”), cleaner and safer environment, less guilt from being responsible for so much pollution, waste, climate change et al, then we as individuals have many capabilities and opportunities to make substantial progress toward those goals. Not necessary to aim for zero emissions or 100% conversions to RE. Things take time. Just start with 25% or 33% or 50%. The more you achieve, the more you learn and the more confidence you gain. At least that’s my own story.
Actually, I agree with Mr. Taylor that the Harvard Medical School study was likely “a bad study”. It was clearly biased. But that doesn’t change the fact that there are externalities that cost our society. Ergo, Mr. Taylor should have an alternative study, with a defensible methodology, that produces an alternative NUMBER.
All the hair-splitting in the world doesn’t change the fact that there IS damage being done by the fossil industry, and that damage is socialized. Ergo, if you wanted a proper free market reaction to renewable energy – which doesn’t have socialized damages, there should either be an appropriate burden (tax) on fossil fuels equal to its socialized externalities, or there should be a benefit (subsidy) paid to the renewable energy for offsetting that externality.
Any other stance is not honest libertarianism, it’s corrupt pandering to the fossil fuel industry.
Mr Taylor effectively proves himself to be a liar and a fraud by attempting to brush off the externalities AT LARGE, because he doesn’t like a rather extreme specific number given by one study.
As for the case of benefit vs damage, that’s easy. Once you determine an agreed upon damage from the externalities, you can then factor in a “opportunity cost” of the anticipated economic growth, and see where the numbers lead. For example: if you recognize that without fossil fuels China’s economy would likely grow only ~5%/year, rather than it’s current ~10%/year, you can take the currently calculated burden for China’s economy and reduce that damage by the expected difference in growth between an all-renewable/nuclear option vs their current fossil dominant option. The difference in growth will likely be ~400 billion/year in China’s case, obviously far less in other cases… In OUR case, the difference would likely be less than 50 billion/year.
Again, by refusing to engage in actual numbers, and just brushing everything aside, Mr Taylor is advocating that we socialize the damage of fossil fuels – turning him into a fossil fuel lobbyist, and NOT an honest economic libertarian.