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Best Way to Effect Change in Energy Markets: Markets or Government?

wind farmDuring last night’s Democratic presidential debate, Senator Bernie Sanders remarked that the reason climate change has not become an issue at least among many Republican candidates is that they are recipients of large fossil fuel donations. Is there a correlation? What separates the candidates’ positions?

While it has become a more partisan issue in recent years, the oil, gas and coal lobbies have given the preponderance of their political donations to Republicans and the green lobby has given much of their monies to Democrats. But there are plenty of Republicans at both the state and national levels who support renewable energy and whose local economies depend on such development. Ditto for Democrats and fossil fuels. At its most essential level, though, it is a question of whether markets or governments are best equipped to address the matter.

The issue has only become more divisive as the voices on each side of the climate change debate have become more strident: One side is saying that the planet is doomed unless there is immediate action to wean ourselves off of fossil fuels while some are denying that global warming is even a human-induced event. Others, meanwhile, are saying that the matter is not as dire as some would predict while cautioning against trillion-dollar initiatives to fix it.

Given that context, both former Secretary of State Hillary Clinton and Senator Sanders, D-Vt., have embraced the scientific findings saying that global warming is real and a threat to the globe’s well-being. But each has a different way to arrive at a solution:

Clinton would continue with the current regiment of providing tax breaks to wind and solar, which have each received an extension to 2019 and 2012, respectively, that is expected to promote their expansion. To this end, the solar industry employs nearly 174,000 in this country — people who are provided a living wage, says the The Solar Foundation. The American Wind Energy Association puts the number of wind-related jobs here at 73,000, and growing.

Sanders, on the other hand, is more in favor of a carbon tax whereby government would tax utilities according to their carbon footprints. It is something that can be easily measured and it is something that would have an immediate effect on carbon releases. Interestingly, many conservative thinkers support this methodology as well, including former Secretary of State of George Schulz during the Reagan administration.

“The producers don’t bear that cost, society does. There has to be a way to level the playing field and cause those forms of energy to bear their true costs. That means putting a price on carbon …That is, you distribute all the revenue from the carbon tax in some fashion back to taxpayers, so there is no fiscal drag on the economy,” Shultz concludes, during an earlier public forum.

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6 thoughts on “Best Way to Effect Change in Energy Markets: Markets or Government?

  1. From my perspective in the UK , and having read the Intergovernmental Panel on climate change’s report AR5, where it is stated that climate change is “unequivocal” and “anthropogenic” how can a senator potentially destined to be in charge of the US still be in denial about climate change? And expect to be credible on other issues? I find this preposterous, and I worry for the future generations.

  2. Markets and politicians are steeped in the psychopathically, irresponsible greedy humans who have no imagination for the future. Politicians are not equiped or intelligent enough to deal with the crisis. I therefore think that life and the planet as we know it are finished. Life in the future will be very difficult indeed – we can’t eat or drink money.

  3. As someone who has visited the areas of this country that have been devastated by the transition away from coal to cleaner energy forms, I can understand how elected officials representing these specific feel obligated to help their constituents who worry foremost about their jobs.

  4. A short and succinct overview of the obstacles to moving to a cleaner carbon future. Two thoughts: Why does it have to be either or (government carbon pricing or market incentives/ subsidies)? Secondly, how in the world do you get elected officials to actually read, study and embrace the facts?

  5. It is a concern that this opinion piece relies on employment numbers provided by trade associations for the solar, wind, and oil and gas industries rather than the US Bureau of Labor Statistics. In doing so, it uses The Solar Foundation’s nearly 174,000 jobs in the solar industry, although the Foundation’s web page that it links to states: “As of November 2015, the solar industry employs 208,859 solar workers, representing a growth rate of 20.2% since November 2014.” Further, the American Petroleum Institute’s 9.2 million jobs number was contested in 2011 by the Checks and Balance Project. “Based on data from the Bureau of Labor and Statistics, Check and Balances Project points out that there are actually only 2.2 million oil and gas industry jobs in the United States–and 40% of all these are actually minimum wage jobs at gas stations.” http://www.treehugger.com/fossil-fuels/oil-gas-industry-jobs-overstated-four-times-by-american-petroleum-institute.html.

  6. Carbon pricing needs to be continued along with tax breaks. Equally important are the Incentives to be given for any value added to the environment. Revenue raised from carbon credits or any other environmental tax has to strictly goes back to the ecology in the form of ecological investment, Through the working of the investment multiplier mechanism, ecological investments will generate employment and income in the long run. Hence, investment in the environment is not a waste and should grow intensively and extensively.

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