‘Follow the Science’ Leads to Ruin

2013-08-14 PRAGUE – Many today believe that renewable energy will let us get off fossil fuels soon. Unfortunately, the facts say otherwise. According to International Energy Agency data, 13.12% of the world’s energy came from renewables in 1971, the first year that the IEA reported global statistics. In 2011, renewables’ share was actually lower, at 12.99%. Yet a new survey shows that Americans believe that the share of renewables in 2035 will be 30.2%. In reality, it will likely be 14.5%. 

A carbon tax is much discussed as a solution to climate change. It is simple and straightforward: a climate price tag makes industry and consumers take into account the implicit negative effects of their actions, whether it is the aircraft fuel for a vacation, or fossil fuels for food fertilizers or to heat and cool a home.

I have argued for a well-designed carbon tax for more than a decade. But five important caveats, almost universally breached by politicians, affect the likelihood of such a policy working.

Freezing temperatures in the U.S. Northeast have pushed up heating costs, creating serious stress for many Americans. Although the rich world’s energy poor are largely forgotten in discussions about climate policies, they bear an unfair burden for well-meaning proposals. That reality is being laid bare this icy winter as energy and electricity prices surge.