A recent article in this newspaper reported on progress in producing electricity from wind. Some 2 percent of Minnesota’s electricity comes from wind, and the cost of producing it has been brought down so that it now costs only 65 percent more than coal-fired plants. As technology continues to improve, costs will drop further.
All this is good news for our society and the environment. But the energy bill under consideration that would arbitrarily require specified proportions of all U.S. electricity to come from wind is just the opposite. It is bad for society and bad for the environment.
Minnesota’s Sen. Paul Wellstone, with the arrant contempt for common sense that seems to dominate most of his economic views, is fighting hard for a 20 percent mandate by 2010. Sen. Mark Dayton, more pragmatic, if not more clear-thinking, is willing to settle for 10 percent.
I must make a disclosure before continuing. I own a farm in southwest Minnesota. A wind project with seven turbines sits two miles to the east and another with 17 is about four miles to the north. If wind energy development continues in the area, selling the wind rights on my farm may bring me a lot of money.
That said, bad economics is lurking.
If wind power doesn’t pollute the air and uses up no natural resources, why is it bad for the federal government to require its use? The answers are simple.
Take hydroelectric power. It’s a technologically mature, low-cost source of renewable energy. It doesn’t pollute the air any more than windpower. Why not pass a federal mandate requiring that 50 percent or even 100 percent of electricity be generated with clean waterpower?
That would be silly, of course, because while hydropower does not use up non-renewable fuels, it is site specific. You need a river with good dam sites, which often are far from population centers. Most of the good dam sites already are used.
And while hydroelectric production doesn’t cause air pollution, it can have devastating effects on river ecosystems. Witness the decline of salmon fisheries caused by dams on the Columbia and Snake rivers in the Pacific Northwest.
Despite hydro’s cleanness, few places to build dams are left where the benefits to society exceed the costs. It’s pretty clear for the existing Snake River dams that the costs exceed the benefits.
Wind power is different, you protest.
True, it isn’t as site-specific as hydro, but it comes close. It may cost only 3.3 cents to produce a unit of electricity in the eastern Dakotas or southwest Minnesota, but the cost easily would be double or triple that in less windy areas.
Yes, output near my farm could be doubled, tripled or quintupled. Perhaps it could be multiplied by a factor of 100. But that still would fall far short of meeting 10 percent or 20 percent of U.S. power needs.
The point here is that a legislative body like Congress is singularly ill-equipped to determine what is the optimum level of resource use for wind, hydro or coal power. Government is ill-equipped to make such broad decisions.
They tried such central planning for 70 years in the USSR and 40 years in the rest of Eastern Europe. It failed. Most of the rest of the world has gotten that message, but it somehow eludes those members of the Democratic party who are caught in some intellectual time warp.
This isn’t to say there is no role for government in resource policy or environmental protection. Congress can’t and shouldn’t decide whether 20 percent of the nation’s electricity must come from wind, or 2 percent or 17 percent or 25 percent or any other level.
But agencies such as the Environmental Protection Agency can take on the more manageable tasks of estimating the environmental damage caused by burning coal or oil, or by damming rivers. Those environmental damages should then be taxed. That’s the simplest, cheapest and most effective way to protect the environment.
It’s a tragedy of U.S. politics that majorities in both major parties continue to scorn measures such as emissions taxes, which would reduce pollution and natural resource use at less cost than the central planning.
Democrats need to learn that such taxes can result in greater reductions in pollution at lower cost to society than the command and control regulations so dear to the hearts of Wellstone and Dayton. Using fewer resources to reduce pollution means that more are left to help the poor and downtrodden in society.
Republicans need to get over their absurd fetishes about taxes. Whenever I tell high school or college students that there’s a crucial difference between what a society chooses to tax and how much total tax revenue it chooses to raise, most grasp the concept without any trouble.
But this difference seems to completely baffle some politicians.
I’m sure windpower production will grow. It will benefit the environment and the economies of Minnesota and the Dakotas.
But the way to foster its growth is to discourage worse alternatives, rather than pulling an arbitrary number out of some nether region and setting that as a national mandate.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc.