Maybe I’d better find my WIN button. That was my initial reaction to President Bush’s call Monday for citizens to voluntarily conserve fuel.
For those too young to remember, WIN buttons were an initiative of the Gerald Ford administration and were sent to those who agreed to help “Whip Inflation Now.”
WIN buttons justifiably were scorned as one of the silliest measures in a decade of economic ineptitude.
My initial reaction was unfair to Bush, however. He simply called on citizens to cooperate as we face a period of short energy supplies because of storm damage in an oil-producing region.
He was not suggesting solutions for any long-term, fundamental challenge like inflation 30 years ago. His appeals as a national leader were entirely appropriate.
Even so, the appeals raise more important questions of how to motivate energy conservation over the longer run.
On this question, Vice President Dick Cheney has been skeptical. “Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy,” he argued in April 2001.
If the vice president is right, is Bush’s call for voluntary stinting a vain one?
If Cheney is wrong, what is the best way to encourage energy saving by households and businesses?
Whether Cheney was right or wrong depends on what one means by “conservation.”
If conservation means reducing consumption of some product in response to moralistic urging by national leaders, then conservation usually fails.
Many people simply ignore such calls for the common good. And cooperation by those who do heed the call tends to flag quickly.
In World War II, there was a blizzard of advertising calling on Americans to consume less to further the war effort.
Most Americans saw the war as a struggle of historic importance. But the government had to institute mandatory rationing of gasoline, tires, sugar and other critical products.
If “conservation” means offering incentives for household and business reductions in energy use, then the record is good.
Centuries of history show humans are ingenious in reducing use of goods whenever prices increase. People find alternatives, make do with less and invent new technology.
The record of energy saving in response to price increases in the 1970s and 1980s is impressive. People carpooled, drove less, bought smaller cars, turned down thermostats, insulated walls and ceilings, bought more efficient appliances and opted for more efficient lighting.
If, for whatever reason, market energy prices do not reflect the full cost to society, then the best response is to tax fuels so that the price consumers pay reflects the true social cost. That is the most effective — and usually the fairest — way to motivate effective conservation.
© 2005 Edward Lotterman
Chanarambie Consulting, Inc.