“Looking back with hindsight, the business opportunities were on the generation side, and the utility was going out for bid with all these big renewable-energy projects. But in retrospect, it seems clear, we weren’t as focused on these fire risks as we should have been.”
– Doug McLeod, former Maui county energy commissioner (quoted in WSJ, below)
Opportunity cost is a central concept in economics. Economics is about the unseen versus the seen. Resources spent in one direction are not spent in another. The same goes for corporations as politically correct, economically incorrect priorities crowd out good. Climate change policy is a premier example.
Government-forced substitution of dilute, intermittent energies for reliable incumbents has not only cost taxpayers and ratepayers. It has also cost the environment–dearly. The recent saga of Hawaiian Electric’s preoccupation with “the energy transition” at the expense of grid safety and reliability is the latest example of this.…
“It is time to do now what was not done in 1999 in Texas. First, deregulate the electricity market, do not re-regulate it under a new regime. That means removing public utility regulation of rates and other terms of service, as well as end the franchise protection over geographical territory.”
The Texas Electric Utility Restructuring Act of 1999 is approaching a quarter-century. And what a mess has resulted from the misnomer “electricity deregulation.” A monopoly wholesale market under mandatory open-access rules is central planning pure and simple. The idea that a ‘competitive’ retail market rescues a governmental wholesale market from the knowledge problem and politicization (per Lynne Kiesling, Michael Giberson, etc.) has been turned upside down in Texas and elsewhere.
I was reminded of this upon reading a 500-word commentary from Doug Sheridan on LinkedIn.…
“The border tax adjustment would be hugely complex given the international supply-chain system, leading to an increase in the attendant bureaucracy even if the regulatory bureaucracy is reduced in size.”
“The CLC proposal is poor conceptually and deeply unserious.”
Six years ago, economist Ben Zycher, the John Searle chair at the American Enterprise Institute (AEI), published an analysis that rings true today–if not more true. “The Deeply-Flawed Conservative Case for a Carbon Tax,” subtitled “’Conservatives’ Endorse the Broken-Windows Fallacy, Reject Evidence and Rigor,” outlined the arguments that once-proud Resources for the Future would not.
Zycher’s piece employed Economics 101 to refute a proposal from the Climate Leadership Council, the Baker-Shultz ‘Carbon Dividends Plan’, that attempted to fool Republicans and conservatives that carbon dioxide (CO2) was a pollutant that the U.S.…