Thursday, August 02, 2007

Subsidies, Incentives, and Costs

There were two articles in the NYTimes Mobile Edition that caught my eye today relating to energy, sustainable development, and economics. The first, Energy Bill Aids the Expansion Plans of Atomic Power Plants, comments on the "hidden" provision on the current energy bill for federally guaranteed loans for the construction of nuclear power plants, and the second, Brazil, Alarmed, Reconsiders Policy on Climate Change addresses Brazil's changing attitude toward climate change responsibility (image at top-right taken from NYTimes article).

Governments are poor choosers of winning technologies. While market failures are signs that governments may need to step in to rectify the failures (regulating land use patterns to lessen traffic congestion for example), there is scant evidence that command-and-control economies work. As with the current ethanol craze, which is more of a way to create jobs in the corn belt states and help large agri-businesses (pardon the anti-corporate tone) than a way to lessen our GHG emissions and our dependence on foreign sources of energy, choosing to provide government backing for technologies can be a slippery slope. Yet again, the obvious and more cost effective solution is to reduce the amount of energy we're using in the first place. Source reduction. Building more nuclear power plants and developing different fuel sources for the same addictions do not solve the problem of inefficient buildings and auto-centric development patterns.

Brazil's "realization" that they are a part of a larger global community is not much of a shocker. OK, I am not a Brazilian political leader, but it seems pretty obvious that actions they take affect their population and the rest of the planet. When developing countries point their collective fingers (I could not help it) at the developed northern hemisphere and say that it's their responsibility to take action and "make it right", they have a point. At the same time, ignoring their own contribution to the global problem of climate change is ignorant and myopic. Why not invest in currently available technologies that democratize energy and "leap frog" the dirty first industrial revolution?

Non sequitur...Now that Rupert Murdoch owns Dow Jones, will we be FOX-ified?

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