A Smart Energy Policy

A Smart Energy Policy: An Economist's Rx for Balancing Cheap, Clean, and Secure Energy

James M. Griffin
Copyright Date: 2009
Published by: Yale University Press
Pages: 224
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  • Book Info
    A Smart Energy Policy
    Book Description:

    While everyone wants energy that is clean, cheap, and secure, these goals often conflict: traditional fossil fuels tend to be cheaper than alternative fuels, but they are hardly clean or (in the case of oil) secure. This timely book provides an easy-to-understand explanation of the issues as well as sensible proposals for a truly sustainable energy policy.

    Economist James Griffin points out that current energy policies are fatally flawed and that government policies should focus on "getting the prices right" so that the prices of fossil fuels reflect their true costs to society-including greenhouse gas and security costs. By using carbon and security taxes, alternative energy forms will be able to compete on a more even playing field against fossil fuels. This will unleash advances in alternative energy and conservation technologies enabling the marketplace and consumers to find the right balance among energy sources that are cheap, clean, and secure.

    eISBN: 978-0-300-14986-9
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-viii)
  4. Introduction: An Overview from 30,000 Feet
    (pp. 1-10)

    A key premise of this book is that energy policy, especially in the United States, is fatally flawed both in theprocessby which problems are identified and in thesolutionsthat are chosen. The process is guided largely by whatever interest groups are most vocal. The solutions often feature either command-and-control mandates or a grab bag of governmental goodies in the form of subsidies, tax credits, and grants. The result is a mishmash of legislation that is inconsistent, ineffective, and ill conceived. What is needed—in the United States and throughout the world—are policies that encourage the kind...

  5. Chapter 1 The Three Conflicting Goals of Energy Policy
    (pp. 11-29)

    Energy policy has lately attained a prominent place on the nation’s public-policy agenda. In mid-2008, U.S. consumers were outraged when the price of gasoline hit $4 per gallon. Vast resources, both human and military, are being spent on the war in Iraq—a country whose oil reserves are eclipsed only by those of Saudi Arabia and Iran. Many feel that our military commitment to the region could be scaled back dramatically were it not for our dependence on Middle East oil. On the other hand, both the United States and our European allies are now hesitant to take action against...

  6. Chapter 2 The End of Cheap Oil?
    (pp. 30-70)

    As indicated in figure 1.2, petroleum is our dominant fuel source, so it is not inconsequential that oil prices quadrupled between January 2004 and June 2008. Over the same period, U.S. gasoline prices skyrocketed from $1.50 per gallon to more than $4.00 per gallon. Diesel prices rose even more sharply. Figure 2.1 reports the price per barrel of oil in both current and constant (inflation-adjusted 2007) dollars going back to 1950. Oil prices (measured in constant 2007 dollars) were even higher in June 2008 than during the energy crisis of the 1970s and early 1980s. Over this period, oil could...

  7. Chapter 3 Oil Security in an Increasingly Insecure World
    (pp. 71-102)

    Certainly from a U.S. perspective, energy security is really about oil security, and the Middle East is the primary source of insecurity. On this most observers agree. It is when we get to the policy solutions that things go wrong. Most popular policy prescriptions include oil independence or at least bilateral oil deals with secure oil producers to insulate the U.S. economy. Also favored by many is a system of price controls designed to immunize the economy during an oil price shock. The Chinese solution has been to revert to petro-nationalism. Although these command-and-control policy prescriptions sound reasonable, they are...

  8. Chapter 4 Climate Change and the Search for Clean Energy
    (pp. 103-122)

    In chapter 1 I emphasized that one of the three goals of energy policy should be clean energy. In industrialized economies, clean energy becomes increasingly important as a policy goal as incomes rise and standards become more exacting, and it will probably always be so as those standards remain perpetually out of reach. Indeed, today there is no perfectly clean technology free of some negative attribute. Even solar panels and wind farms have aesthetic characteristics that are bothersome to some. The choice is among imperfect alternatives.

    Because substantial progress has already been made in reducing other air pollutants, as discussed...

  9. Chapter 5 Climate Change and the Difficult Search for Institutions and Policies
    (pp. 123-146)

    Chapter 4 provided a general understanding of the science, economics, and engineering issues involved in climate change. In this chapter I consider the politics of climate change, the adequacy of existing institutions to effect change, and the specific policy options available. Let us begin by reviewing the political problems involved in getting numerous nation-states with diverse interests committed to policies to abate greenhouse gases and to cooperate on oil security.

    As discussed in the previous chapter, Alan Manne’s calculation of the optimal carbon tax is an interesting intellectual exercise; but convincing more than two hundred nations to adopt such a...

  10. Chapter 6 A Smart Energy Policy
    (pp. 147-166)

    Balancing cheap, clean, and secure energy will require major technological breakthroughs. The critical question is, How best can society facilitate these technological advances? As discussed in chapter 5, Congress has neither the expertise nor the objectivity to select promising technologies as winners of its beauty pageants for alternative fuels or to mandate the use of certain fuels through command-and-control regulations. There is also the widespread—but unrealistic—view that government-funded R&D will by itself solve the problem. To be clear, as discussed in chapter 5, government-funded R&D has an important role to play in supporting basic research and high-cost, risky...

  11. Notes
    (pp. 167-178)
  12. References
    (pp. 179-188)
  13. Index
    (pp. 189-193)