Market, not regulation, should drive clean energy
Is there any doubt there are already too many environmental regulations?
A recent government report found total U.S. regulatory costs of almost $2 trillion annually.
Consider the Environmental Protection Agency’s rule requiring states to reduce carbon dioxide emissions by 30 percent on average by 2030: Compliance will cost a fortune, while destroying an untold number of jobs.
The rest of the world isn’t imposing carbon regulations, so the EPA rules make America less competitive internationally.
Technological innovation is already reducing emissions more quickly and more efficiently than heavy-handed government regulation ever could. Evidence shows proper incentives combined with ingenuity can drive technological advances of world-changing originality and scale.
The textbook case is shale gas.
Thanks to the shale revolution, U.S. carbon dioxide emissions have dropped sharply since 2007. Meanwhile, the dramatic increase in natural gas production — a result of technological advances in fracking combined with horizontal drilling — has turned what had been a gas shortage into a surplus of cheap, low-carbon gas for electricity production, heating and manufacturing.
New revolutionary advances in fracking have done more to reduce emissions than any other activity. The amount of natural gas produced per rig in the Marcellus region has increased eight-fold since 2009.
With enough breakthroughs, solar energy could eventually become a dependable source of electricity. But solar currently accounts for only a tiny fraction of the nation’s electricity generation.
Solar and other renewable energy sources alone can’t get us where we need to be soon enough. We need other low-carbon sources, and one of the best options is nuclear power.
The environmental movement has done more harm with its opposition to nuclear power than anything else it’s done. This is the kind of irrational thinking that is hampering efforts to address climate change.
Reliable, affordable, zero-carbon nuclear power accounts for nearly two-thirds of America’s emission-free energy. Reducing greenhouse emissions significantly might be impossible without it. Fortunately, five new U.S. reactors are under construction.
It is time to end the delusional thinking that heavy-handed government regulation is the best and most cost-effective way to address climate change. Instead, we need to start thinking more realistically about market-based technological solutions to our environmental challenges.
In short, approaches that use market-driven innovative technologies would help both the economy and environment, and that’s an outcome that would benefit the United States and the world.
Mark J. Perry is a professor of economics at the University of Michigan-Flint and resident scholar at the American Enterprise Institute.