I GET BY WITH A LITTLE HELP FROM MY
FRIENDS ELECTED REPRESENTATIVES. I'm happy to see Sebastian Mallaby giving a big ol' backhand to his colleague Robert Samuelson's column on why only the engineers can save us from global warming. As Mallaby points out, the engineers ain't gonna do jack if government doesn't regulate and tax the incentives into place. Subsidies for new technologies are fine, but the bottom line is that conservation -- both to extend the life of our hydrocarbons and lower the temperature of our planet -- is going to be the name of the game here, as the market will lag in syncing prices to future damages. Moreover, government can subsidize tech, but it'd really be better if it adjusted the marketplace so private firms funneled some of their cash in that direction. As Mallaby points out, Bush has pledged a $1.2 billion over five years to get hydrogen cars to market. Now consider that the energy firms spend nearly $20 billion every year refining hydrocarbon technology -- that's almost a 100 times more cash spent to perpetuate our dependence on a finite and harmful energy source.
So what you want to do is use government's power to change some corporate minds. Mallaby writes that "[i]f you want to get hydrogen cars into the showrooms, you can't put your faith in government alone; you need Exxon and Shell and Toyota and Ford to make hydrogen a priority. And what's going to drive these companies' choices? Obviously, taxes and regulatory incentives. If carbon is subject to taxes or caps, the energy companies and car companies will devote more of their vast research budgets to alternative fuels."
Yes indeed. The invisible hand, I fear, is much better at cloaking itself than correctly incentivizing the future, and so large communal action organizations such as the government have to deploy CAFE standards, gas taxes, building regulations, public transportation mandates, and all the rest. That's why we have the government: because the invisible hand often gives the invisible finger to visible problems with tangible consequences.