“The kind of technological revolution called for by energy experts typically does not occur via regulatory fiat” — claim Shellenberger & Nordhaus. Actually, that is typically the only way it occurs. I defy anyone to name a country that has successfully adopted alternative fuels for vehicles without employing some kind of regulatory mandate.
This is also true in the electricity sector. Consider that in terms of electricity consumption, the average Californian generates under one third of the carbon dioxide emissions of the average American while paying the same annual bill.
Did they accomplish this by technology breakthroughs that S&N (mistakenly) say we need? Not at all. They did it by accelerating the deployment of boring old technology – insulation, efficient lightbulbs, refrigerators, and other appliances, light-colored roofs and so on– through tough building codes and intelligent utility regulations, especially ones that put efficiency on an equal footing with new generation. The result: From 1976 to 2005, electricity consumption per capita grew 60 percent in the rest of the nation, while it stayed flat in hi-tech, fast-growing California.
S&N think we must have a massive $30 billion a year government programs and clean technologies. A central argument of theirs is that “Big, long-term investments in new technologies are made only by governments.” This is perhaps half true, but 100% irrelevant. What we need is big, long-term investment in existing technologies — and that is made primarily by the private sector stimulated by government regulations.
Why isn’t government spending more important? Let me relate an eye-opening story from my time in government.