Last week, news outlets reported that Representative Matt Gaetz, a Republican from Florida, is drafting a proposal to counter the Democrats’ “Green New Deal”. Unfortunately, Rep. Gaetz’s “Green Real Deal” is a contradictory mishmash of government activism being touted by the media and faux conservative groups as a Republican response to the Green New Deal. In so doing, it betrays a fairly comprehensive misunderstanding of the current state of energy markets and bears no resemblance to free market policy. In fact, the “Green Real Deal” reveals just as much of a lack of understanding of markets as the government control fantasies of his fellow Climate Caucus members. As a purely economic matter, Rep. Gaetz’s government control resolution is perhaps even worse than a carbon tax, since recently introduced carbon tax bills at least pretend to be trying to limit government interference. Rep. Gaetz’s draft resolution is so gauzy and flexible that it is basically a license for the federal government to take over the energy sector and redirect it in whatever direction that unelected bureaucrats fancy.
Early in the leaked resolution draft, Gaetz oddly asserts that a “national commitment to innovation, competitive markets and the deployment of advanced energy technologies” has led since 2009 to energy efficiency improvements, increased natural gas production, and increased wind and solar installations. This is jarring to anyone familiar with the energy industry because, though “national commitment” is a vague term, the ideas and data points collected in this clause are so in conflict with each other as to be nonsensical. Since this resolution refers to a duty of the federal government, we must presume that “national commitment” refers to a federal government commitment. But it is laughable to claim that the Obama administration led a national commitment to support natural gas production. To the contrary, the Obama administration limited gas development on federal land, slow-walked approvals for LNG export terminals, proposed numerous regulations crimping gas exploration and development, and its ideological allies aggressively opposed expanding the pipeline network which carries natural gas. The massive growth in natural gas production has been IN SPITE OF the prevailing “national commitment,” not because of it.
The other two data points are similarly contradictory, particularly to the supposed national commitment to competitive markets. While some energy efficiency improvements have been undertaken for genuine economic reasons, the federal government since 2009 has layered on billions of dollars in costly mandates in the name of efficiency, everything from banning incandescent lightbulbs to wildly jacking up fuel efficiency standards for vehicles. And the increase in deployment of wind and solar generation since 2009 has next to nothing to do with competitive markets: tens of billions of dollars in subsidies, state renewables mandates, and legally mandated preferential access for renewable generation drove that growth. If that sort of government direction and interference counts as a “competitive market” then the term has lost all meaning.
The resolution, perhaps unwittingly, uses the language of the big government left, again betraying a lack of free market understanding. Government does not “empower individuals and businesses to come together in the marketplace,” people organize into markets themselves. Government interferes with those markets through regulation, mandates and subsidies. While some degree of regulation is appropriate, the idea that the government “empowers” is a deluded fantasy left over from the days of central planning. The resolution also talks repeatedly of “driving investment” to various industries and technologies selected by government. This term is a euphemism for government interference. The way government “drives investment” in a particular direction is by subsidizing it, mandating it, or regulating competitors. A genuine free market conservative should recoil at this language of “driving investment” because it raises the obvious question: who decides? Once the vague power of this resolution is granted to the federal government it is obvious that it will not be individual citizens or consumers deciding. Government “driving investment” means government control.
Moving into the action points section of the resolution, the total lack of understanding of the politics and policy of the energy sector is exposed most clearly. The “Green Real Deal” asserts that the government should “reduce and modernize regulations so that clean energy technologies can be deployed and compete,” but the reason that wind and solar are competitive today is precisely because of vast regulatory and subsidy assistance putting a thumb on the scale. It sees modernizing the grid as a priority, but modernizing the grid to achieve the lowest costs to consumers and redesigning the grid to maximize wind and solar are goals that are directly in conflict. It sees a modernization of the National Environmental Policy Act, but seems to ignore the fact that environmentalists oppose any changes to that law. It calls for increased subsidies for energy efficiency improvements, which companies and individuals already have an economic incentive to undertake, making those subsidies wastefully redundant. It also proposes a positively Orwellian carbon dioxide registry, allegedly voluntary, to better track the targets of environmentalist ire. This sort of tracking and surveillance of citizens engaging in lawful activity would not be tolerated by an ostensible conservative in other policy areas given the obvious potential for government abuse.
Despite how it is being characterized, this is not the “Republican” response to the Green New Deal, and it certainly isn’t a conservative or free market response. This is a Green New Deal-lite: all the license for government interference, just with less explicit language. The better to allow proponents to avoid accountability behind a cloud of obfuscation. Say what you will about the Green New Deal, but it is open about the intent to subject the energy sector to comprehensive, explicit government control. If Rep. Gaetz believes that government is the way forward, why not say so? At least have the courage of your big government convictions.
