Congress is considering an assortment of legislative proposals
to ostensibly curb greenhouse gases and promote energy
independence. Unfortunately, the result of most of these proposals
would be less energy, greater dependence on foreign sources of
energy, and higher prices.
Most of the bills focus too much on the process of energy
production rather than on the product itself. For example, some
language under consideration excludes nuclear power by creating
mandates that can only be fulfilled with other sources of energy;
or it creates so-called renewable portfolio standards that mandate
only certain types of energy production.
This approach artificially eliminates energy sources that are
compatible with Congress's proclaimed goals of reducing CO2
emissions and energy dependence. Nuclear technology is a proven,
safe, affordable, and environmentally friendly energy source. It
can generate massive amounts of electricity with almost no
atmospheric emissions and can offset America's growing dependence
on foreign energy sources.
If the desired result is clean, emissions-free, domestic energy,
the legislation should set the target and allow the market to
determine the best way forward. If Congress passes any climate
change bill, it should endorse free-market solutions and not force
specific technologies on Americans.
Learning from the Past
The energy crises in the 1970s prompted a significant expansion
of publicly subsidized research and development for wind, solar,
biofuel, and geothermal technology. Congress passed a bevy of
legislation in the late 1970s and 1980s designed to spur a
renewable energy movement. For instance, the Energy Tax Act of 1978
promised residential energy tax credits for wind and energy
equipment expenditures and business incentives that allowed
investors to receive tax credits of up to 25 percent of the cost of
technology. Subsequently, the Crude Oil Windfall
Profits Tax Act of 1980, the Energy Policy Act of 1992, and the
Economic Security and Recovery Act of 2001 all attempted to
establish sustainable investments in and consumption of renewable
energy. More recently, the energy bill of 2005
required more agricultural-based renewable fuels; the proposed
House and Senate versions of the 2007 energy bill would do the
Notwithstanding Congress's efforts, consumers have shown little
faith in renewable energy's ability to meet energy demands. The
portion of total energy consumption provided by renewable energy
sources is small and has remained relatively flat over the past 20
years. Despite decades of government largesse, the
United States still gets only 2.4 percent of its electricity from
non-hydro renewables such as solar and wind.
Nuclear energy, on the other hand, provides about 20 percent of
the nation's electricity. In and of itself, this statistic may be
unremarkable. However, nuclear power continues to generate a
significant portion of America's electricity despite
over-burdensome regulation and decades of organized anti-nuclear
propaganda. Given the fact that it emits no carbon
dioxide, it would be extremely bad policy for Congress to create
mandates meant to curb CO2 emissions that do not recognize the
contribution of nuclear power. Congress should not choose nuclear
power over other carbon-free energy sources, but Congress should
not discriminate against it either.
Let the Market Decide
The purpose of public policy should be to protect Americans'
freedom to choose courses of action that best suit them as
individuals; it is not to engineer an America that is consistent
with a specific political agenda. Unfortunately, Members of
Congress often have too many conflicts of interest and represent
too many special constituencies to always make objective decisions.
It simply has neither the expertise nor the moral authority to tell
Americans how to generate power or what kinds of power they should
consume. Every time they do, Americans end up footing a higher
If CO2 emissions and foreign energy dependence are obstacles to
individual freedom, then they are legitimate subjects of public
policy. Rather than picking winners and losers, Congress should
allow the market economy to find the most efficient and
cost-effective solution to the proposed energy problems.
Instead of telling America how to decrease CO2 emissions and
foreign energy dependence, Congress should simply set the goals,
remain technology-neutral, and allow the private sector to meet
those goals. Most current energy legislation does the exact
opposite. It not only sets an objective but then limits America's
options for how to achieve it.
The Effect on Consumers
Washington's heavy-handedness does not respect the uniqueness of
America's diversity. Every region in the nation is different and
has different energy requirements. For example, according to the
Energy Information Administration, the southern part of the United
States, particularly the Southeast, has extremely poor
wind-generating potential. This means that to meet Washington's
decrees, regional utilities cannot use wind power, the least
expensive and most flexible of the very expensive and inflexible
renewable options. So they will have to use something else, which
will be even more expensive and limiting than wind.
The irony is that most Southern utilities are clamoring to build
nuclear power plants. They know their market and understand that
meeting energy demand projections will require substantial
increases in generating capacity. Yet if passed, most current
legislation will force them to divert their scarce resources toward
less efficient and sometimes unworkable projects. Ultimately, these
will be exposed as bad energy choices, they will fade when the
subsidies go away, and the people of the Southeast will face even
more energy problems than they do now.
Current legislative approaches will inevitably lead to higher
costs for the consumer, which, because everyone needs energy,
disproportionately affects the poorest parts of the U.S.
population. The political and social elite pushing green
initiatives have the financial means to pay higher electricity
prices while America's poor suffer the consequences.
The free market creates options and allocates resources to their
most efficient use. Congress's view of a market solution for
reducing energy dependence and curbing greenhouse emissions is
certainly a distorted one. With enough meddling, Members of
Congress can engineer whatever outcome they like and call it a
market solution. By imposing enough restrictions on America's
citizens, limiting their choices, and taxing their activities,
Congress can make wind and solar the only options left to produce
electricity. But just because they can, it does not follow that
Jack Spencer is Research
Fellow in Nuclear Energy and Nick Loris is Research Assistant in
the Thomas A. Roe Institute for Economic Policy Studies at The
Jack Spencer, "Competitive Nuclear Energy Investment: Avoiding Past
Policy Mistakes," Heritage Foundation Backgrounder No. 2086,
forthcoming from The Heritage Foundation.