Alternative energy funding is one of those ideas, like raising the minimum wage and free children's health care, which has wide bipartisan support. It is also an idea, like the other two, which is vastly overrated. Opposition to any of these draws scorn. Who could possibly oppose children, energy independence and helping the poor?
Energy independence is a misleading phrase. One could talk about vehicle, plastics or toy independence. All of these things are commodities, and the U.S. imports vast quantities of all of them. The reason the United States does this is because it is cheaper than if we made those items. If it made economic sense to produce energy here, America would.
Obama has promised $150 billion dollars over 10 years to go toward alternative energy and has said that, with strategic investment, this will generate five million new jobs for America. He offers no concrete evidence of how he arrived at five million jobs, which is because there isn't any.
The free market allocates resources based on the value of the item. The value of any item is determined by what people will pay for it. Subsidizing alternative energy distorts market prices, not only creating inefficiencies but also risking the danger of an ethanol-like side effect. In ethanol's case, subsidizing corn production (a main component of ethanol) led to farmer's switching to corn (due to artificially high corn prices) and subsequently drove the price of non-corn food up.
Subsidizing alternative energy artificially inflates its worth. This distortion of market prices causes untold damage to the free market system.
If there is money to be made in alternative energy, capitalist entrepreneurs will go after it to make a profit. The reason there isn't a massive rush is because many of the technologies simply aren't financially profitable yet. In time they will be, but government subsidies just serve as corporate welfare that continually fund dead ends. Meanwhile, goals such as 80 percent carbon reduction are not only unrealistic, but also silly.
The billions of dollars could instead be invested into more efficient areas to create real, forseeable jobs. As the government currently has a deficit in excess of $10 trillion, borrowing more money is not a smart option. In 2004, California was applauded for passing a $3 billion bond measure to fund stem cell research. As California struggles with budget cuts and financial disaster now, the subsidy seems increasingly foolish.
The arguments for alternative energy funding fail to stand up to scrutiny. The job argument ignores the simple fact that the money had to come from somewhere, and is no more efficient than if $150 billion was poured into any other area. National security is often cited, especially since oil money flows to anti-American states such as Iran and Venezuela. A gas tax would be far simpler, far more fiscally responsible and better at changing people's behaviors. It would also have the same positive environmental impact, while causing less damage to American industry.
When gas surged to four dollars a gallon, Americans quickly adapted by buying more fuel-efficient vehicles and driving less. Regrettably, while a gas tax has flaws, an American culture increasingly built on entitlements, tax cuts and cheap debt isn't likely to even consider it, much less implement it. The real solution is in front of us, but we would rather throw away $150 billion than consider taxing the public.
Jack Millman can be reached at millman.5@osu.edu.
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