The debate over climate change has distracted conservatives from seriously engaging in the debate over energy policy. As long as we are talking about whether or not carbon dioxide is a pollutant, we aren’t engaging in the real issue: How, in the long run, do we modernize our energy infrastructure to best meet our economic and environmental goals?
Conservatives aren’t shaping the future. As a result, we’re getting policies that are unnecessarily increasing the cost of energy, sending taxpayer subsidies to politically connected businesses and sustaining an outdated model of regulated monopolies that is harming consumers and manufacturers.
Coal may be the big source of energy in Minnesota, providing 44 percent of electricity generation. But its share has been steadily declining, in no small part thanks to hydraulic fracturing of natural gas. Coal generators are being replaced with cleaner natural gas turbines, and with wind and solar generation at both the consumer and utility levels. As new sources come online to meet demand, they will produce less carbon dioxide, whether that matters or not. So let’s move beyond the global warming debate and focus on the issues that indisputably matter when making energy policy.
Let’s start with the basics: Inexpensive and abundant energy has been the key to our improving quality of life since the start of the industrial revolution. Since human beings harnessed fossil fuels and then electricity, life spans have nearly doubled and standards of living have improved unimaginably.
Nearly every consumer good is powered by electricity. Our smartphones, smart homes, connected TVs, streaming boxes, climate controls, medical devices, food storage equipment — pretty much every good we value and rely on in the modern world. Shut electricity off and our world grinds to a halt.
Already 10 percent of the world’s electricity is used to power computing devices. An iPhone, when you include the energy used to support its functions in the cloud, uses as much energy as a refrigerator.
To continue this progress for our children and grandchildren, our energy policies need to focus on how to produce and efficiently use clean, abundant and inexpensive electricity.
Breakthroughs in renewable generation and storage technologies have been driving down the cost of wind and solar production dramatically and increasing their reliability. It hasn’t been government mandates and subsidies that have been the driving force, but the economics of the marketplace.
Smartphones and laptops, for instance, have driven improvements in energy efficiency and battery technology. When you are making billions of high cost/high margin portable devices that rely on batteries, lots of effort goes into figuring out how to squeeze as much power into as small a space as possible and as cheaply as possible. No government subsidy can match the incentives that such a huge market can produce.
The same is true for LED technology, which is finally breaking through in lighting. LEDs have been around for decades, but they really took off when they started backlighting flat screens in phones, computers and TVs. What used to be made in the millions is now made in the billions and soon trillions, all because of market forces.
Top-down management, mandates and subsidies are just wildly inefficient at achieving our policy goals. From the “moral equivalent of war” to innumerable climate-change conferences, a crisis mentality goes off in search of once-and-for-all, single-shot solutions. This is not how progress works. Technological change moves incrementally, ideas coming together and begetting other ideas, one the byproduct of another, each causing improvement over time. That progress is happening in renewables now.
Renewables will expand for another reason: They offer people freedom from the current centralized system of power generation. Utilities aren’t creatures of the free market, but a response of government to old cost models that created natural monopolies. Government regulators thought there could be only one electricity provider and needed to keep it whole.
We believe technological progress is breaking those cost models. Conservatives should seize that opportunity to bring market forces back into the electricity market. Rather than fighting the inevitable, we should use the technological revolution that is coming to free consumers from the stranglehold that current government regulation has on the energy market.
New technologies have the potential to do to the electricity grid what the breakup of AT&T did to communications. A few decades ago, touch-tone phones were a notable innovation; today, nearly everybody on Earth has a pocket supercomputer with access to all of the accumulated knowledge of mankind.
That is the market at work.
Amy Koch is former majority leader of the Minnesota Senate. King Banaian is a former member of the Minnesota House and professor of economics at St. Cloud State University. Both are Republicans and members of the Conservative Energy Forum.