Energy Policy Failure

This editorial in Wall Street Journal vividly underscores the perverse effects of subsidizing renewable energy.  It mentions an academic study from a while back, within which is this observation:

“The common assumption that the expansion of production of alternative energy will suppress fossil-fuel energy production in equal proportion is clearly wrong. The failure of non-fossil energy sources to displace fossil ones is probably in part attributable to the established energy system where there is a lock-in to using fossil fuels as the base energy source because of their long-standing prevalence and existing infrastructure and to the political and economic power of the fossil-fuel industry.”

(https://www.nature.com/articles/nclimate1451)

 Though mentioned only in a footnote, the so-called “Jevons paradox” in economics may also be relevant.  

“In economics, the Jevons paradox occurs when technological progress increases the efficiency with which a resource is used, but the falling cost of use induces increases in demand enough that resource use is increased, rather than reduced. Governments typically assume that efficiency gains will lower resource consumption, ignoring the possibility of the paradox arising.”

In this case, 

a) Government policies aimed at reducing costs and improving the efficiency of renewable energy technologies lead to increased use of those technologies.

b) Because renewable energy systems are intermittent, more fossil fuel plants must be built (or at least kept in operation) to back them up.  

c) Lower energy costs, coupled with increased reliance on fossil fuel plants, leads to increased energy consumption in general.

d) Higher energy consumption leads to increases in CO2 emissions, in addition to the toxic waste and emissions resulting from the build-out of renewable energy, AND reduction in energy security resulting from reliance on global supply chains.

In short, government policies to force energy markets in a “feel-good” direction end up producing more of the bad things they were designed to reduce, as well as other bad things that had not even been foreseen.  

How often have we seen this dynamic before?

Steven W. Collins, PhD, PE (NY WA)

Van Hornesville, NY