After Climaquiddick

Glenn Reynolds has some thoughts on what we should do in the wake of the collapse of the Warm Mongers:

…what should we do?

Nothing. At least, in my opinion, we should continue to try to minimize the use of fossil fuels regardless. Burning coal and oil is filthy, and they’re more valuable as chemical feedstocks anyway. We should be building nuclear plants and pursuing efficiencies in the shorter term, while working on better solar (including orbital solar), wind, etc. power supplies for the longer term. That doesn’t mean “hairshirt” environmentalism, where the goal is for neo-puritans to denounce people for immorality and trumpet their own superiority. It just means good sense.

I think some elaboration is required. Starting with (to use a politically incorrect phrase from the old Lone Ranger joke), what do you mean “we,” white man?

That is, who should decide?

I have a weird concept. How about letting the market do it?

For example, overhaul Price-Anderson to deindemnify the nuclear industry to make them more responsible for plant safety, in exchange for removing many of the design restrictions imposed by an anti-innovation Nuclear Regulatory Commission. Eliminate the bans on drilling, both on and off shore, to reduce energy costs in the near term (and cut the income of those making war on us and the West in general) and provide wealth to invest in the technologies that will eventually replace fossil fuels. Stop trying to pick technological winners (something government is notoriously bad at) and distorting the market with tax credits. Put some federal money into R&D, but eliminate government mandates (such as ethanol) whose purpose is more for political payoffs than environmentalism, and let the market sort out what makes sense.

This should be one of the planks of any new Contract With America — let the energy market work.

[Update late morning]

Three major corporations have pulled out of Climate Action Partnership:

Oil giants BP PLC and ConocoPhillips along with Caterpillar, Inc., the Peoria, Ill., heavy-equipment maker, have decided against renewing their membership in the organization, according to a statement released by the group Tuesday.

Red Cavaney, ConocoPhillips senior vice president for government affairs, said USCAP was focused on getting a climate-change bill passed, whereas Conoco is increasingly concerned with what the details of such a bill would be.

“USCAP was starting to do more and more on trying to get a bill out without trying to work as much on the substance of it,” Mr. Cavaney said.

Gee, sounds like health care. I expect this to be the beginning of a corporate stampede that will finally put a wooden stake through the heart of this monster. Business is starting to sense the blood of the ecofascists in the water. I’m still wondering if the Audi ad was part of that.

61 thoughts on “After Climaquiddick”

  1. “A loan guarantee, which pays in the event of a default, transfers that risk out of private hands, reducing the cost of funds.”

    No it doesn’t. It just puts the cost in that other pile of government debt. Of which the interest cost is expected to consume a bigger and bigger % of the budget for the next 20 years. What’t the interest on 4% multi billion dollar loans for 20 or 30 years? Because interest rates can’t stay this low much longer. The more debt, the more pressure on rates. You really DON’T understand how markets work or the cost of money.

  2. Given the choice between:
    A) Direct payments to lower cost-of-entry
    B) Loan guarantees

    Only one of those choices has managed to wipe the freaking housing market out. Repeatedly.

    If you’re doing direct payments, you can at least stop doing that if there’s a reason to do so. The spent money is still gone – but you have no outstanding obligations to meet. If you’re doing loan guarantees, you end up with with people deciding “Hey! Free money!” and no clue why it might be a bad idea to keep increasing the size of the unfunded insanity. Until your loan guarantees are literally large enough to do a hellacious number on the entire economy.

    And we’re the stupid ones.

  3. “I have a weird concept. How about letting the market do it?” My response exactly. The economy where I live is based on coal mining and power generation, but government interference and environmentalist influence has hurt us seriously. It wouldn’t be nearly as irritating if we could see common sense behind it all, and that is generally what guides free markets.

    The current system of government control over our economy has hurt us all, and now we’re expected to pay the costs through taxes. Why should we think that fixing the environment through government fiat will have better results? When enough people are willing to pay extra for clean power, it will sell itself. Until then, leaving more money in private hands will create greater prosperity and thus available for investment in the best ideas, rather than the most politically influential ones. I think, for example, that if AGW had to sell itself to the market, more people would be reluctant to put money into the predictions of computer models which can’t be proven accurate, and, if the models proved out, they would be looking for solutions that environmentalists won’t even listen to, because somebody might make a profit from them.

  4. Karl Hallowell – of course high cost of capital is a barrier to entry – that’s Finance 101. Per Finance 101, loan guarantees reduce cost of capital and allow more entrants. A loan encourages viability in that everybody is expecting the loan to be paid off.

    High cost of capital? Hah. Obama is giving it away.

    You know what has a problem getting capital? Terrible business plans. That’s what makes these loan guarantees dangerous. They’ll feed the bad ideas. And when these businesses default on the loans, the US taxpayer will be on the hook. You know, the people who borrow a billion dollars to create a $500 million dollar business.

    If Obama were serious about more nuclear power, then the solution is fairly obvious. Lower the government produced barriers. Things like nuclear waste disposal and legal obstacles. Cost of capital is not a serious barrier to a valid idea by a competent operator.

  5. Let me expand on this. If you use gov’t guarantees, you transfer the risk TO the gov’t. If the gov’t continues to guarantee loans at low rates, more people will be willing to take the reduced risk, making it more likely there will be defaults because the gov’t didn’t let markets determine the TRUE cost of that risk so the taxpayer will be on the hook for loans made at unrealistic rates thus skewing the market more because rates aren’t allowed to rise as a reflection of the cost of the risk. Hmmm…what recent meltdwn does this sound like? I know, the housing meltdown. Who suffers? Everyone not getting guarantees.

  6. 1) Getting a Federal license
    2) Surviving the inevitable court challenges

    The 2006 energy bill appears to have solved #1. There is no way to solve #2.

    Um, actually, there are a lot of different ways, including eliminating ridiculous liability laws and adopting “loser pays.”

    The rest of Gerrib’s drivel sounds like the Obama Maladministration claiming the stimulus put hundreds of billions of dollars “back in the economy” after … first taking it out of the economy.

    Proggs just have no clue where the government gets its resources.

  7. Mark A. Flacy – in other words, we should adopt the NASA model and have the government buy and run the nukes?

    That’s certainly not what he advocated. Actually, what Flacy wrote was matter of fact, and not very opinionated. However, I don’t think you’ll find many advocates for US nationalizing nuclear power outside of Maxine Waters office.

  8. @Rand:

    You don’t seem to understand what a strawman is. No, shut up, I can see you typing, but you don’t. A quick troll post is not a strawman. But hey, I can see how someone named after an emotionally-unstable whacko-libertarian harpy would have trouble coming up with an appropriate response to stimulus.

    “The [people financing nukes] will also listen to technical people.”

    I guess this is why auto-insurance underwriters consider each potential driver on their own merits, which is why there’s no increase in premiums for males under 25. Oh wait, there is an increased premium associated with being a male under 25. I guess risk determined via class past performance does matter after all.

    Also, I don’t see how you can claim that technical people can triumph through sheer strength of argument and that Constellation was the worst of all possible solutions. Unless you’re suggesting that Constellation was, from a technical standpoint, actually the best solution.

    “If you use gov’t guarantees, you transfer the risk TO the gov’t. If the gov’t continues to guarantee loans at low rates, more people will be willing to take the reduced risk, making it more likely there will be defaults…”

    Er, are you trying to say that nuclear powerplant builders will slack off their work because they know that Uncle Sam will pick up the tab for failures? It sounds like you don’t have a lot of faith in the nuclear powerplant construction industry.

    “If Obama were serious about more nuclear power, then the solution is fairly obvious. Lower the government produced barriers. ”

    Chris’s argument is not and has never been about government-produced barriers.

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