In Russia, We Pick Winners. In U.S., Winners Pick You!
A good point that isn't made often enough:
"When was the last time human beings modernized our energy sources by making older power sources more expensive?" [asks Michael Shellenberger, co-founder of the tiny, Oakland-based think tank the Breakthrough Institute in 2002 with and Ted Nordhaus] "And, of course, by now you probably know that the answer is never."
Personal computers didn't take off because there was a tax on typewriters, he says. And the Internet didn't sprout up because the government made telegraphs more expensive.
Even economically literate enviros often forget to disaggregate the natural economic phenomenon of price increases in the presence of scarcity from the unnatural price increases brought about by taxes or regulation (which are much less effective at changing behavior and encouraging innovation when they are limited by national boundaries and not the global market.)
Sadly, I'll have to part ways with Shellenberger here:
"There's this idea that the government shouldn't be involved in technology, the government shouldn't be picking winners and losers," Shellenberger says. "Which is sort of a funny thing to say. It's kind of like, well, why not? And when hasn't the United States government been involved in picking technology winners and losers?"
A situation where the government picks winners is just as bad as simply making the losers more expensive. Government benefits in the form or subsidies will have the same effect as government attacks on certain technologies (like coal and oil) in the form or taxes. The same is true of regulatory favoritism for one solution over the other.
More on picking winners here.
