Pain at the Pump? We Need More
By DANIEL C. ESTY and MICHAEL E. PORTER
NYT
GASOLINE prices are above $4 per gallon in much of the country, a reminder that our dependence on oil carries a great cost. President Obama has promised that the Justice Department will be vigilant in pursuing price-gouging at the pump, but what we really need is to address the full set of energy-related problems, with a focus on spurring clean energy innovation.
Our trade deficit arises in large measure from the hundreds of billions of dollars we pay for foreign oil. The imbalances threaten America’s economic stability and national security. Our consumption of fossil fuels and our energy inefficiency are a drag on our competitiveness and increase air pollution and the threat of climate change.
To compete globally, we need to encourage clean energy innovation while letting the market decide which particular technologies prevail. Experience in fields like information technology and telecommunications suggests that creating demand for innovation is far more effective than subsidizing company-specific research projects or providing incentives for particular technologies. Governments just aren’t good at picking winners; witness the billions wasted on corn-based ethanol subsidies.
The best way to drive energy innovation would be an emissions charge of $5 per ton of greenhouse gases beginning in 2012, rising to $100 per ton by 2032. The low initial charge, starting next year, would make the short-term burden on consumers and businesses almost negligible.
(More here.)
NYT
GASOLINE prices are above $4 per gallon in much of the country, a reminder that our dependence on oil carries a great cost. President Obama has promised that the Justice Department will be vigilant in pursuing price-gouging at the pump, but what we really need is to address the full set of energy-related problems, with a focus on spurring clean energy innovation.
Our trade deficit arises in large measure from the hundreds of billions of dollars we pay for foreign oil. The imbalances threaten America’s economic stability and national security. Our consumption of fossil fuels and our energy inefficiency are a drag on our competitiveness and increase air pollution and the threat of climate change.
To compete globally, we need to encourage clean energy innovation while letting the market decide which particular technologies prevail. Experience in fields like information technology and telecommunications suggests that creating demand for innovation is far more effective than subsidizing company-specific research projects or providing incentives for particular technologies. Governments just aren’t good at picking winners; witness the billions wasted on corn-based ethanol subsidies.
The best way to drive energy innovation would be an emissions charge of $5 per ton of greenhouse gases beginning in 2012, rising to $100 per ton by 2032. The low initial charge, starting next year, would make the short-term burden on consumers and businesses almost negligible.
(More here.)
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