“In the United Nations Paris Accord last December world leaders promised to try to reduce future emissions. These politicians shamelessly clapped each other on the back, pretending they had accomplished something important. However, they had agreed beforehand not to even discuss the only action that could rapidly reduce global emissions.”

– James Hansen, “‘I am an Energy Voter’” February 23, 2016.

James Hansen is mad at the “I am an Energy Voter” campaign that encourages consumers to vote for their favorite energies at the ballot box, not only at the pump. Hansen, in fact, is mad at the free society where buyers voluntarily buy and sellers voluntarily sell. Ludwig von Mises called that consumer sovereignty.

Hansen wants otherwise. Renewables as savior is for the Tooth Fairy, he believes, so nuclear and forced conservation (conservationism) is atop his agenda — forced by a punitive carbon tax (or fee-and-dividend as he puts it).…

“Price controls cause shortages, and government allocation exacerbates it. This was learned the hard way during the 1970s, particularly with oil, thanks to Republican President Richard Nixon.”

George Melloan’s review of Jane Mayer’s Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (Wall Street Journal, January 15, 2016) criticized her foray into energy and energy policy:

Ms. Mayer might herself benefit from an economics course. She writes that Richard Nixon imposed economic controls on oil and gas in 1971 to “address the energy crisis.” The Nixon price controls helped to cause the energy crisis.

Intrigued, I bought Dark Money to see exactly what she said.  Here is the passage from Mayer (p. 91) referenced by Melloan:

The fossil fuel industry’s fondest wishes were also fulfilled.

“A review of energy developments in 1976, published in RFF’s Resources magazine (Jan–March 1977, p. 3) reached a Hotelling-like conclusion: ‘Nonrenewable and exhaustible fuels supply most of our needs now,’ the staff article stated, ‘but they will be increasingly expensive to obtain and use, until, around some distant corner, they will be replaced’.”

In its first half century, RFF’s central message has gone from energy optimism to energy pessimism, complete with an embrace of major government intervention in energy markets. The transformation began in the 1970s with a fixity/depletion view of mineral resources, which spawned conservationism (less energy usage for its own sake, with a government role).

And when the energy-short 1970s turned into the energy surplus of the 1980s, RFF’s angst shifted to issues surrounding a human influence on global climate, primarily from carbon dioxide (CO₂) emissions from the burning of coal, oil, and natural gas.…

F. A. Hayek made many contributions to the social sciences in his lifetime. This post shares his thoughts about natural resources–really mineral resources–from his 1960 book, The Constitution of Liberty. His thinking is contained in the section, “Conservation of Natural Resources,” (pp. 367–71).

The question Hayek addresses is whether self-interested free-market decisions overuse important, even ‘depletable,’ resources, leaving less for posterity from an economic viewpoint. Hayek argues against what might be called conservationism, or conservation for its own sake where present-value analysis does not apply.

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Hayek employed familiar reasoning to explain how privately owned resources had a capital or salable value, which was particularly relevant to mineral deposits for which, ceteris paribus, present production meant less future production. [1] In his words:

If the owner can get a higher return by selling to those who want to conserve than by exploiting the particular resource himself, he will do so.