This Commentary first appeared in the Washington Times on October 25.
The word on the Web-o-sphere is that a lame-duck Congress could enact a wind- and solar-subsidizing renewable electricity mandate between November and January.
That’s in addition to the billions of dollars in taxpayer “stimulus” that were dedicated to the creation of an alternative energy economy, which the Obama administration touted as a creator of “green” jobs.
But like every other big-spending initiative in which Washington tries to centrally plan the economy, a renewables mandate will fail, just like the stimulus.
The experience in Pennsylvania is instructive. When President Obama took office in January 2009, the state’s unemployment rate was 7%—up 2.3 percentage points from a year earlier. Today it stands at more than 9%.
But what we heard from the amateur economists in the Keystone State’s environmental movement was that so-called “green” jobs were going to save the day, thanks in part to the passage of the Alternative Energy Portfolio Standard. The eco-activist group Citizens for Pennsylvania’s Future (known as “PennFuture”), whose motto is “Every environmental victory grows the economy,” said as much in March 2008:
Clean energy industries are attracted to Pennsylvania because of the work ethic of our people, and because the Pennsylvania General Assembly passed the Alternative Energy Portfolio Standards Act in 2004. The guarantee of a market for wind, solar and biomass power drew major solar and wind companies to locate here.
But now, other states have upped the ante and are seriously competing for clean energy companies. New Jersey and California have hundreds of millions of dollars a year available for solar energy, for example.
So, similar to what President Obama has prescribed with the stimulus, the failure hasn’t been the policy; it’s been that the government hasn’t intervened enough! And fitting an environmentalist economist’s logic perfectly, PennFuture cites New Jersey (with a 22.5% renewable energy mandate by 2021 and 9.6% unemployment) and California (with a 33% renewable energy mandate by 2020 and 12.4% unemployment) as examples to be followed.
What other pains do alternative energy mandates inflict? According to Pennsylvania’s Public Utilities Commission, the annual cost of ownership for solar energy per kilowatt-hour is over 700% more than the cost of coal, and wind energy is almost 23% more expensive than coal. Meanwhile, state government provides more than $20 million annually for grants to alternative energy projects, and in 2008, Gov. Edward G. Rendell, a Democrat, signed into law another mandate for an additional $650 million to be given to “green” schemes. Try paying those higher utility and tax bills while fighting to keep your job.
Not surprisingly, those hefty sums for wind and solar still aren’t enough to keep the environmentalists happy, as groups like PennFuture have pushed for even greater mandates and subsidies this year. They won’t be happy until Pennsylvania hits double-digit unemployment as businesses’ electricity costs go through the roof.
Now pull back to the national scene. Sen. Jeff Bingaman, New Mexico Democrat, and Sen. Sam Brownback, Kansas Republican, want a 15% national renewable electricity standard. Today, nearly half of America’s power comes from coal, with 20% each from natural gas and nuclear, and less than 3% combined from wind, solar and biomass. As the Heritage Foundation says, “and this is after decades of existing generous renewable subsidies.”
How much will be enough to make the “green” economy-sparked by renewables mandates-save us all? The answer is, it will never be enough. When it comes to the environmentalists’ agenda, their appetite for subsidies and intervention is insatiable.
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Paul Chesser is a senior fellow for the Commonwealth Foundation (www.CommonwealthFoundation.org), a public policy education and research institute located in Harrisburg.