The brewing scandal regarding Solyndra is an opportunity to consider which roles the federal government can and should play in developing alternative energy and which roles it should not. Take as a starting point the friendly column by Joe Nocera in Friday's New York Times:
But if we could just stop playing gotcha for a second, we might realize that federal loan programs — especially loans for innovative energy technologies — virtually require the government to take risks the private sector won’t take. Indeed, risk-taking is what these programs are all about. Sometimes, the risks pay off. Other times, they don’t. It’s not a taxpayer ripoff if you don’t bat 1.000; on the contrary, a zero failure rate likely means that the program is too risk-averse. Thus, the real question the Solyndra case poses is this: Are the potential successes significant enough to negate the inevitable failures?
This article by Michael Flectcher in yesterday's Washington Post is well worth your time. It follows the push for green jobs in Ocala, Florida as it has met with almost no success over the past couple of years. In brief, there is plenty of money for retraining and there are plenty of workers to be retrained, but there is no market for the products. Nor will there be until the price of fossil fuel emissions is much higher. From the article:
The industry's growth has been undercut by the simple economic fact that fossil fuels remain cheaper than renewables. Both Obama administration officials and green energy executives say that the business needs not just government incentives, but also rules and regulations that force people and business to turn to renewable energy.
Without government mandates dictating how much renewable energy utilities must use to generate electricity, or placing a price on the polluting carbon emitted by fossil fuels, they say, green energy cannot begin to reach its job creation potential.
In the name of protecting low-income workers from the high price of gasoline (and other dubious reasons), we did not put a carbon tax in place. But when they lost their jobs, we trained them for jobs that would exist only in a high-carbon-tax environment. Brilliant!
For a recent news story on a pilot program in Germany, see this report from last year.
I thought this bit of news was very interesting, for what it signals about US firms doing business overseas in green energy:
US energy giant First Solar on Tuesday won a deal to build the world's largest solar power plant in China, aimed at helping mitigate climate change concerns.
First Solar will construct the two-gigawatt plant in Ordos City, Inner Mongolia, under a memorandum of understanding (MOU) inked Tuesday with Chinese officials at the company's headquarters in Tempe, Arizona.
It is good to see that business come to an American company. The article goes on to discuss what's in it for China, beyond the energy to power 3 million homes:
The MOU outlined a long-term "strategic partnership" between First Solar and Ordos City, where First Solar would also consider a manufacturing investment, officials said.
I'll let Keith Hennessey count the ways, in this tour de force of blogging. I've blogged about CAFE standards each time they've been the subject of policy discussion over the past few years. Here is some essential reading:
- Fuel Efficiency or Fuel Consumption?
- New CAFE Standards
- Fuel Economy and Safety
- Cleaning Up the CAFE
Earlier this week, as my family was driving through town, we stopped to let an enormous SUV back out of its parking spot on Main Street. I thought that the driver must be happy to have heard about the CAFE standards -- that behemoth she was driving just got more valuable, since the new, tighter standards only apply to new vehicles.