The Obama administration has released its Clean Power Plan (CPP), which calls for the United States to have 20% of its energy from renewable sources. Previously, we lined out all the reasons why the CPP will increase energy costs for all Americans and cause jobs to be lost. We also explained how renewable energy, especially wind power, is incredibly inefficient.
The response from the environmentalists is the following: it doesn’t matter if we lose a ton of jobs or if these policies cause low and middle income families across the nation to struggle to pay their electric bill, the fact is we need to switch to renewable sources now. If not now, when?
But what the above argument ignores is that it doesn’t matter if the government mandates something, a technology does not become more efficient and less expensive by the government forcing people to use it. We mentioned earlier how California, which already mandates 33% of energy sources to be from renewables, has energy bills four times as that as the rest of the nation.
If the government is forcing people to use your product, you have no incentive to make it better. Why would you waste money on improving your product when people have to buy it anyway? You would use your money to hire lobbyists to make sure the government is choosing your company over the others.
We support the use of all energy sources, provided it is voluntary and not mandated by government subsidies that only incentivize crony capitalism and corruption. Finding more efficient and clean sources of energy is incredibly important, but only private companies innovating under the pressure of market forces will truly find innovative and affordable ways of doing it.