Saturday, March 19, 2011

Environmental(ist-induced) Disasters

Unintended consequences are a wonderful source of intrigue and entertainment to me. I absolutely love them. At night, we cuddle up (we alternate big spoon) and I whisper sweet nothings into their ear. I’ve got a thing for the study of unintended consequences.

In the realm of environmental policy, we saw a cap-and-trade measure* implemented under Bush I to reduce SOx emissions actually increase the usage of older, inefficient, and highly polluting plants than would have otherwise occurred in the free market. This was because older plants were grandfathered in, and did not have to be compliant with the new rules – only new plants did. This made new plants comparatively more expensive under the regulated system, even though they would have been cleaner. Although we benefitted long-term, the short-term result was actually more pollution.

While a reasonable person could have guessed this would have been the case, not all policymakers are reasonable. It’s relevant because pushback against nuclear power is occurring in both the United States and abroad (think Germany) following the horrific events in Japan. As can be expected, the immediate pushback has been to make new construction of nuclear power more difficult.

There are two problems with this – one specific to the nuclear industry, and the other for the energy sector as a whole. For nuclear power, it would be one thing if this were to cause us to start shutting down nuclear plants. But aside from New York Governor Cuomo’s push to shut down Indian Point (long a goal of his), I’m not hearing much push for this – more attention is being focused on moving away from constructing new nuclear power. However, if we make it more difficult to build new plants, we’re left with the crappy, unsafe ones. This is the exact opposite we want. The safest plants will always be new ones built by engineers privy to materials and information not available 40 or 50 years ago.

The second item to consider is that if we do start phasing out these old plants because we don’t trust them, how do we replace the lost electricity production? NIMBYism has prevented us from building wind turbines, coal-fired plants, dams, large-scale solar, and just about any other power production source you can think of. The outcome of this situation is more expensive energy, which kills economic growth. Uber-environmentalists may get excited about this, but they fail to consider that our replacement power is going to be coming from those old, nasty coal-fired plants and current peaker plants. This would also reduce the reserves that can be brought online in the event of increased demand, resulting in blackouts and their associated dangers (think Enron’s manipulations of the California energy market the impacts on the elderly stuck in unairconditioned apartments once the power goes out). That’s how unintended consequences work.

Full Disclosure: despite Brian Adornato’s attempts to dissuade my position, I want some more nuclear up in this bitch.

*For platitudinal conservatives, I hope this information doesn’t make your head explode. Yes, cap-and-trade was implemented in the early 1990s to reduce sulfur emissions from coal burning power plants under a Republican President by enforcing the EPA’s Clean Air Act. The final cost was ten times less than industry estimated it would be, and we made leaps and bounds in reducing acid rain while achieving millions of dollars in health care costs savings by reducing the incidences of asthma, bronchitis, and other respiratory diseases. Yeah, that actually happened.

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