• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • What’s Scarier Than Cap and Trade? A Renewable Electricity Standard

    For the past year, the phrase “cap and trade” was as taboo as using Lord Voldemort’s name in J. K. Rowling’s Harry Potter series. Wizards scared of the Dark Lord referred to Voldemort as “He-Who-Must-Not-Be-Named.” For those hoping to pass cap and trade, it became “The-Energy-Policy-That-Will-Create-Jobs.”

    But opponents correctly labeled cap and trade a significant tax, and the bill died in the Senate. In fact, congressional votes on cap and trade are a major talking point on campaign ads—ads that vilify Members who voted for the Waxman–Markey cap-and trade-bill last year. Cap and trade has dim hopes of revival, and as a result, politicians are turning to a plan that could actually pass: a renewable electricity standard (RES).

    An RES mandates that a certain percentage of our nation’s electricity production come from wind, solar, biomass, and other government-picked renewable energies. What makes it scarier than cap and trade is that it has cap-and-trade-sized costs and bipartisan support. In a September 12 Politico op-ed, Governors Chet Culver of Iowa and Don Carcieri of Rhode Island, leaders of the bipartisan Governors’ Wind Energy Coalition, stressed the need for a federally mandated RES:

    Governors from California and Oregon to Minnesota and Maine agree that among the best ways to address these issues is to harness the economic and environmental benefits of domestic renewable electricity production. The way to do that is by passing a strong Renewable Electricity Standard—to ensure rapid growth of the nation’s wind and other renewable electricity sources. We are today sending a letter to Senate leadership, urging the prompt adoption of a strong national RES.

    A strong RES must be the cornerstone of our nation’s new clean energy economy. It won’t mean just wind farms in Iowa or off the coast of Rhode Island—though it would expand job opportunities in both our states. The RES remains the most economically efficient way to create opportunity all over the country and throughout the supply-chain in energy manufacturing; new project construction and associated transmission, and continuing operation and maintenance of these facilities.

    The truth of the matter is that if wind energy could compete in the market and provide consumers with cheap electricity, it wouldn’t need a mandate that forces production. Though the source of wind and solar energy is free, power delivered from these sources is very expensive. The flow of wind is erratic and uncertain, which means that the power generated from wind is as well. Further, location choices for fossil and nuclear-fueled power plants have much greater latitude than those for wind turbines, which, like hydropower plants, must be located where the natural resource is best suited—not necessarily close to where the power is used.

    Higher electricity prices have rippling effects throughout the economy. More expensive electric bills force businesses to make production cuts and reduce labor. According to a new Heritage Foundation study, if Congress implemented a 22.5 percent RES by 2025, household electricity prices would jump 36 percent and industry prices by 60 percent by 2035. There would be 1 million fewer people working on average with the RES in effect than if there were no RES. And as the mandated level of renewable use rises over time, so do the losses imposed on the economy. Summing up the impacts for 2012–2035 yields a total loss of $5.2 trillion in GDP.

    Calling an RES the boost the American economy needs is a farce. George Mason economist Russ Roberts wrote a criticism of stimulus spending in general that applies here:

    When the economy is broken, why would you think an increase in spending would get it going? Why would it have any impact other than an immediate short-term impact limited to the people who receive the money? Why would it get the whole economy going again? Think of having a lot of wet wood and trying to get it going by lighting newspaper as kindling. There’s a fire for a while, while the newspaper is burning. But once the newspaper is consumed, the wood hasn’t caught. Even burning a lot more newspaper (bigger stimulus package) isn’t going to get the wood dry enough to catch fire.

    Subsidies, mandates, and special preferences for uncompetitive sources of energy are worse than burning newspaper. Because these policies kill more jobs than they create, the fire will never be as big as it could be.

    Posted in Energy [slideshow_deploy]

    16 Responses to What’s Scarier Than Cap and Trade? A Renewable Electricity Standard

    1. The Elephant's says:

      Wind energy is hyped by glowing examples of 'capacity', which is what a turbine would produce under perfect conditions of wind blowing all the time, at just the right speed. Wind energy requires 24/7 backup with a conventional power plant, because the wind, on average, blows less than a third of the time. Spain's experience with wind and solar is an example we should pay attention to. They found that for every "green job", around two jobs were lost in the regular economy because of the higher cost of power to business.

      Advocates of wind farms seem to believe that by encouraging "renewable" electricity we would somehow be reducing the demand for foreign oil. They need reminding that oil powers our transportation, and our electricity is powered by coal-fired plants and natural gas, both of which are in plentiful U.S. supply. I have read that we have a 300 year supply of coal. Politicians do like to appeal to the environmentalists.

    2. Pingback: PA Pundits - International

    3. Lawrence Burnham, Od says:

      I cannot but wonder at what extremes this current administration will go to pass heavy taxes on everything that we need or use in the name of being "green".

      Renewable electricity source is very creative narrative in place of Cap and Trade. However, we have been using 'renewable electricty sources' for I don't know how many years.

      Then again, there is no such thing as 'renewable' sources. The wind blows and is gone. It does not renew, the sun shines most days, if it doesn't, no power. But, what of hydroelectric power. We have been harnessing water power for years to produce electricity, yet the government choses to ignore this energy source. One must ask the question: why is this ignored? Hydroelectric plants across this country produce thousands of kilowatts daily without the use of fosil fuels, and are not dependent on the sun shining or the wind blowing. Just Saying that this is just another form of taxation. Wake up America!

    4. Walter Hood Atlanta says:

      Yet, no one seriously speaks of nuclear energy.

    5. Hebronhick, Ohio says:

      Just at the CD forced the vinyl record out of existence and the computer is making the typewriter scarce, fossil fuels should be forced out of the market by competition not edict.

      When alternative fuels are competitive and a wiser choice for production of energy, fossil fuels will gradually bow out of the energy picture. This slow and gradual process brings the price of the alternative more in line with the target and the "forcing out" of the original is predictable and painless.

      Whenever the word "mandate" appears in the business community one must guard their wallet. Government requirements and regulations force up the price of any product or service directed toward it. The American consumer is always the one paying the bill for "greening the environment". Just like an apple on a tree, "greening" (or ripening) should be a slow and gradual process that happens naturally without intervention by outside forces or persons.

    6. Pingback: Must Know Headlines 9.15.2010 — ExposeTheMedia.com

    7. TJS, FL says:

      The source of this spending cancer, other than socialism, is the global warming myth. There has been only about 1/2 F warming in the last 150 years. The warming theories' underpinning ideas are false, none of their predictions have come true.

      The greenies are endlessly clever in creating roadblocks to energy. Our national energy policy is de facto restriction on fossil fuels and nuclear. Nuclear and coal are moribund, and all forms of drilling are under strong attack. The "news media" is a useful idiot in promoting the anti-energy agenda.

      We must forestall insane spending sprees like RES for another 5-10 years until it becomes clear that the alleged warming is kaput. We must demand a spending/taxing moratorium until the economy recovers, and temperature record accuracy improves, and the climate models improve, and predictions of the climate models become accurate. Until then it is insane to spend trillions on an imagined problem, while crippling our energy-dependent economy.

      Other than that, we can vastly improve our energy supply via nuclear energy and by replacing gasoline with natural gas, to a large extent. Natural gas can also replace much of the coal in electric generation. We don't have an energy problem, we have a huge political problem with greenies.

    8. Monica, Slatington says:

      There are those who are willing to sacrifice much (our economy, our jobs, our personal incomes) in the name of our new god, Mother Earth.

    9. Dan Brosman, Scottsd says:

      Wind and Solar accounts for less than 1% of power generation in the US. Both require a massive amount of specific land. Sunny areas for Solar and windy areas for Wind.

      Picken's Plan for a Wind farm on 11,000 acres of West Texas failed because even with the massive incentives for Wind generation, there was no infrastructure support, transmission lines, to carry the power to where it would be used. A wind generator, even in the best location, produces power only 11% of the time.

      A RES of 22% is economic suicide.

    10. Jeanne Stotler, Wood says:

      I encourage all to read David Limbaugh's book,"Crimes against Liberty", it really shows the inside workings of this administration and those who are connected to it. David did a great job on exposing all connections and how even his press releases and Gibb's press conferences are rigged. Read this book then make sure you vote in November and take someone with you who may need a ride. God Bless America and Please keep her safe.

    11. Drew Page, IL says:

      Just another way for these crooked SOBs to get their hands in our pockets.

      When solar and wind power can deliver the same amounts of energy we currently consume and at the same or lower costs of our current energy sources, then talk to me. Until then, I say we build more nuclear power plants, continue the use of oil, gas and coal for the production of power and move quickly toward powering vehicles with natural gas instead of gasoline.

      This is not a difficult conversion for cars and trucks that burn gasoline. The more significant problem is transitioning the delivery system (gas stations) from supplying gasoline to natural gas. We have more than enough natural gas here in the U.S. to meet our needs, it burns cleaner than gasoline and, according to T. Boone Pickens, costs about 40% less tha gasoline.

    12. Perry, OK says:

      I would not call myself a green person or liberial. I would like to say as a LOGGER and business owner. There are ways to utilize more of what we have available. I know that at this time I have 4 machines cutting and piling trees cedar trees to be more correct. The value of those trees in a fuel ceel are about a barrel and a half per 1000 lbs. No market so in a few weeks poof appx 200,000 ibs and over a million btu's per hour are gone up in smoke and of no use to anyone. So to did the 3 jobs that could have been.

      It is a slow and painful process but the choices we make today will effect tomarrow and that comes more quickly each day.

      Just to note my Company will survive either way. It just seems like such a waste of something that could be used for the good of all, and its going to get cut down anyway and burned.

      Your choice!

    13. Les Horn, Atlanta, G says:

      This myopic energy standard would be the most damaging legislation ever signed by an American President.

      It's a hugh TAX increase on everything.

    14. Bruce McPherson, Hya says:

      Massachusetts has such a law: requires 2.5% renewables. NGrid offers to buy one half of Cape Wind's output at 18.7 cents per kWh with a 3.5% yearly rate hike for 15 years. We now pay 10/11 cents per kWh. Wind farms in Western MA can sell electricity at a fraction of that price; I'd guess Hydro Quebec could too, But the MA Department of Public Utilities is now hearing two weeks of testimony. New coal, oil, gas or nuclear plants could be built at less than half the cost of that wind. The CO2 saved by the wind power is, according to the British government, four ten-thousands of world total in 2010…..

    15. Leon Lundquist, Dura says:

      Well kids! I'd like to see hundreds of millions of little machines generating electricity. My vision is something that the abominable vision can't make out in the fog of possibilities. Technology already exists to get you all completely off the Grid. Free Capital in the hands of small citizens is the only way to actually go Green. The blatant fact Obama utterly condemns Capital in the hands of American Citizens means he has no intention whatsoever (other than Racketeering) of serving Ecological Interests.

      No People! It is about destroying all American Industries, one at a time. (No matter how worthy it is.)

    16. Craig - Larchmont NY says:

      The RES standard is already in place in most states. We need this, the reason being its not only an issue of cost but an issue of national security. The US is in a precarious place globally and we need to be self reliant. We spend a lot of money being the worlds policeman and that number is not reflected at pump. Unfortunately, it is counted in flag draped coffins. I for one have had enough of that.

      We are using natural resources that are dwindling – we have to go deeper to drill than ever. yes, shale and coal are available but for how long until we wind up in the same position.

      No one speaks of rebates for drillers but the rebates and grants are there whether you realize it or not. What is needed is an apple to apple comparison. I have not seen one that compares and reveals the real cost of all energies from start to finish. I think that would be very helpful and if someone knows of that study please attach a link. I can tell you one thing, I have seen an awful lot of utilities placing solar and wind into service for their own benefit.

      I for one would love to see a study that compares the true costs of all. The United States has better things to do than send its monies to despots overseas.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×