Let's Not Think Big on Energy

Oh good. Big thinker Jeffrey Sachs, part-owner of the mess in post-Soviet Russia, and now director of the Earth Institute at Columbia University, wants President Obama to think big on energy.

What the disaster truly makes clear, however, is the inadequacy of the administration's own approach to overhauling America's energy system.

Yeah. Like government and its bribed-apologist experts have a clue "overhauling" anything, let alone America's energy system.

Sachs understands, at least, that the current Obama policy approach is flawed. The American people can see that it is a rat's nest of favors and subsidies to special interests. So that's why a bold plan is needed.

That is where the government - and the President - must come in: to promote, in a systematic and aggressive way, the best alternatives for clean energy and then to speed their adoption as they prove their economic and environmental merit.

Franky, Mr. Sachs, I doubt it. For all the talk about consensus and imminent disaster required massive government intervention, the fact is that we haven't a clue about the "best alternatives" or even the meaning of "clean energy." We don't know if CO2 concentration is a problem. We don't know what the climate is doing. And we don't know which technologies will be the winners.

The best thing to do, right now, as Iain Murray writes in National Review Online, is to stop the crony capitalism that induces companies like BP--"Beyond Petroleum"--to get cozy with the government. Look what happened after the Exxon Valdez spill.

After the Exxon Valdez spill, legislators and industry got together and agreed to a cap on damages in exchange for an increase in tax payments. Generally, damage caps create what is known as “moral hazard,” lessening the consequences — and thus increasing the likelihood — of a potentially damaging act.

Isn't that special! Special privileges and exemptions in return for tribute.

What we need to get us to the energy future is a lot of people trying different stuff. That's because nobody knows what the future will demand. Nobody knows what the best alternatives are. Sure, there are a ton of promising ideas out there. But who knows which are the good ideas and which are the good ideas that work.

Fortunately, we have a wonderful system for exploring the future and rewarding the people that get it right. It is called capitalism. Free enterprise capitalism, not government-corrupted crony capitalism.

Government's role is an important one. It is to play the role of impartial judge. When you get "people trying different stuff" you can be sure that they will make a ton of mistakes. Some of those mistakes will be messy, like BP's mistake in the Gulf of Mexico. When people make a mess, they must clean it up. No need to send down the US Attorney General with criminal complaints and perp walks. Just make sure that the law operates properly so that people damaged by a spill or a gas release get compensated fairly and justly.

Conservatives have a great role to play here. It is to play interference against politicians, against experts like Jeffrey Sachs, and against politicized corporations like BP.

The future will almost certainly be significantly different from the future planned by government and its experts. It will almost certainly be different from the future imagined by today's big corporations. That's because, in the nature of things, today's power elite won't want futures that diminish their power. Politicians want to spend money on programs that will get them reelected. Experts want national crises that require more research. Big corporations want solutions that will allow them to leverage their current market advantages against small upstarts.

The beauty of capitalism is that it doesn't give a damn about politicians, experts and big corporations. It just rewards the chap who had the right idea at the right time. And the other people? The chaps with the right idea at the wrong time? The chaps with the promising idea that wouldn't scale or couldn't be reliable or inexpensive enough? Well, they probably had a grand time trying.

The encouraging thing is that whatever stupid crony-capitalist or public-private partnership policy or grand strategy that Obama comes up with, he'll probably botch it.

And then the decks will be cleared for ordinary technologists and businessmen to do something sensible.