Friday, June 15, 2007

Good Intentions Do Not Make For Good Policy

That is one of the greatest problems with liberals having political power. They are full of good intentions, but they consistently come up short with practical solutions to real-world problems.

Case in point: Evan Bayh’s latest attempt at legislating. He tagged an amendment onto the CLEAN Energy Act of 2007 that required the President to come up with a plan to reduce U.S. oil consumption by 35 percent by 2030. (SA 1508). The amendment to (quoting from the amendment) “reduce our Nation's dependency on foreign oil by investing in clean, renewable, and alternative energy resources, promoting new emerging energy technologies, developing greater efficiency, and creating a Strategic Energy Efficiency and Renewables Reserve to invest in alternative energy” passed a Senate vote earlier this week (6/12/2007).

“Breaking our dangerous dependency on foreign oil is one of the defining challenges of our time,” Bayh said in a statement delivered on the Senate floor prior to the vote. (Hmmm… I wonder what Bayh has to say regarding the real defining challenge of our times – Militant Islamists.)

Bayh’s amendment directs the Office of Management and Budget to work with the Secretaries of Energy and Transportation and the Administrator of the Environmental Protection Agency to develop the most cost effective way to reach strict oil savings targets. The amendment would allow a combination of approaches, such as improved fuel-efficiency standards, hybrid cars and the use of ethanol and biomass fuel, to reach the goal.

Note that the amendment does not address the fundamental problem of “alternative” energy sources: They are expensive! If they where more cost effective than oil we would already be using them en masse. Because oil is so cheap we, as a society, weigh the costs of foreign oil dependency and decide to accept the problems associated with it because, on the whole, it is our most cost effective option. Should oil prices rise high enough, and remain high long enough, people would eagerly embrace more cost effective alternatives. Note, for example, how enraged the public became when gasoline prices shot up above $3.00/gallon. (Aside: Senator Maria Cantwell and 24 cosponsors - almost entirely Democrats - tagged another amendment onto the Energy Bill making gasoline price gouging a federal crime (S.1263). What a bold and courageous move).

If Evan Bayh were truly interested in decreasing our “dangerous dependency on foreign oil” there is a simple, effective, and very expedient way for him to achieve this – the tax code. All he would have to do is hike up the tax on fossil fuels to the point where alternatives start becoming more attractive than oil. Then just sit back and let the market and American ingenuity work it’s magic. Since Evan ignores this obvious alternative, I have to question just how serious he is about decreasing our foreign oil dependency. I recognize that a politically unpopular move such as raising gasoline prices would take real political courage, and courage is in very short supply in Congress. But if Evan Bayh truly sees this as the “defining challenge” of our times why does he pussyfoot around the subject (ie. directing the Administration to develop strategies to meet his amendment’s targets) rather than taking direct action that would have a meaningful impact? Furthermore, there is nothing in Evan’s amendment regarding increasing domestic oil production, another way that he could attack our foreign oil dependency head-on if he were really serious about solving this problem. Yet Democrats are very hostile to domestic oil exploration – remember the battle over Alaska’s Arctic National Wildlife Refuge?

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