The High Cost of Renewable Energy
Are “renewable portfolio standards” worth the price to reduce carbon emissions?
Way back in the heady days of 2008, Barack Obama admitted that the radical environmentalist agenda he advocated was going to be pricy. “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket,” Obama said. “Coal-powered plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”
According to the U.S. Bureau of Labor Statistics, nationwide electricity rates since Obama’s 2008 declaration are up nearly 13%, though on an annual basis that’s generally lower than the rate of inflation. So maybe we avoided Obama’s prediction? Not so fast.
Bloomberg’s Cass Sunstein notes new research revealing “that renewable-fuel mandates are an unusually expensive way to reduce greenhouse-gas emissions.” Primarily because of what it does to electricity rates. Sunstein explains:
A strong majority of states now have “renewable portfolio standards,” which require that a specified percentage of the electricity supply must come from renewables. In California, the 2030 target is 60 percent. In New York, it is 50 percent.
Some states have lower targets, but even so the standards are expected to produce significant increases in the use of renewable energy — and to move states in the direction of becoming carbon-free.
To evaluate renewable-portfolio standards, it is essential to answer two critical questions. First, how much do they do to reduce greenhouse-gas emissions? Second, how much do they cost?
The answer to the first question is arguably good news: “Over their first seven years, such standards produced large cuts in carbon emissions — perhaps as much as 659 million metric tons.” But that reduction cost a pretty penny. Researchers say the price per ton is anywhere from $130 to $460. That may be front-end heavy, though, and prices may come down as technology improves.
Still, the reality is that leftists are picking winners and losers. As Sunstein writes, “Renewable-fuels requirements seem to be a way to take business away from the bad guys and to give it to the good guys. Their costs are not visible. People may well pay more for electricity, but they don’t see why.” That’s evidence of the fundamental truth that regulations are a form of hidden taxation. In 2008, Obama argued that the biggest challenge was “get[ting] the American people to say this is really important” despite the costs. It’s easier to achieve public approval when the costs are hidden.
Some other things to think about from our past commentary:
Electric vehicles leave an outsized carbon footprint.
Wind and solar cannot compete with fossil fuels and nuclear energy for efficiency.
And yet ecofascists become more insistent all the time on boondoggles like the $93 trillion Green New Deal, despite its predicted effects being “barely distinguishable from zero.” We’re already paying more as a result of leftist schemes. Enough is enough.
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