The Roving Eye: Energy, Blackmail and Memorial Day

Freeman Dyson gives a take on global warming and energy policy, in the form of a book review of William Nordhaus' "A Question of Balance". Written in Dyson's usual clear and concise style, it spells out conclusions for the layman and policy maker. Being an old modeling wonk, I'd like to know more about Nordhaus' DICE simulation that underlies the comparisons, but the lessons are pretty clear: The only clear policy winner out there, other than getting lucky with technology fixes for cheap energy, is a carbon tax. Direct government regulation is an economic catastrophe, and the more arbitrary and heavy-handed the worse. Al Gore's prescription comes out as a tens of trillions disaster, no surprise from someone who doesn't seem to have grip on either economics or engineering. If we're to get lucky with technology fixes, the best way to improve our chances is a carbon tax that creates a reliable incentive for inventors and investors. The current ethanol subsidy/tariff fiasco stands as an example of the outcome when winners are picked by political fiat.

Meanwhile, what's happening with the price we currently paying for energy? We're handing a cool trillion dollars a year to OPEC, according to an article by Bob Zubrin, whose work I've reviewed here. Not only is that crippling to our economy, but a good fraction of the money goes to prop up regimes pursuing policies inimical to our welfare, such as promoting socialism and Islamism. So while we're talking about a carbon tax, we should be discussing an additional levy on imported petroleum and gas. Meanwhile, go full bore after tar sands, oil shale, and - yes - drill offshore and in ANWR. If the right can get around the need for carbon taxes, it's time for the left to quit whinging about doing what we need to survive a transitional period. Reduce impact, but drill and dig. Those who oppose are effectively voting for more tombstones in our military cemeteries. There's only so long that the citizenry are going to put up with blackmail by those who happen to live on top a pool of oil, but add little value and often seek our harm, a fact likely obscured by the political battles of the moment. We can fix the problem by sweat and innovation, starting now, or by force later.

As we start the summer holiday season, and remember those who sacrificed for our freedom, it's also good to recall how good Americans have it. We live in a style beyond the dreams of our ancestors, and are not - yet - in a mortal struggle for survival. We're in a season when politicians of every stripe are incented to convince us we have bad problems that only they can solve. That's a siren song well worth ignoring. When political interests give us an ethanol fiasco, or prove unable to face simple actuarial realities, it's fair to ask what confidence we should have that government can fix the energy (or any other) mess with regulation and prescription. The best Memorial Day gift the government and politicians could give the American people is to get out of the way.