President Obama’s Energy Policy: Green Energy, Or Crony Capitalism?

Today President Obama was advocating the renewal of wind energy tax credits to promote green energy. Meanwhile, last week the Obama administration placed a 31% tariff on the importation of solar panels from China. So, is he for green energy, as the wind energy tax credit would suggest, or against it, as his raising the cost of solar panels indicates?

As components of energy policy these two initiatives appear contradictory, but as crony capitalism, they both make sense. One benefits crony capitalists who manufacture wind turbines, who admit that their business is not economically viable on its own. The other benefits crony capitalists who manufacture solar panels in the United States and want to raise the price of competing products.

If we really wanted more renewable energy, shouldn’t we be delighted if the Chinese are willing to sell us solar panels at below their cost? That “below cost” claim is likely not true—which is too bad—but if it is true, shouldn’t we be happy that the Chinese are using their money to subsidize our consumption of solar energy, and unhappy that our own government is taking money out of our pockets to subsidize the consumption of wind energy?

How can President Obama fault the Chinese for subsidizing their solar panel industry while at the same time supporting subsidies for our wind turbine industry?

Meanwhile, as President Obama pushes for subsidies that benefit his cronies in the wind turbine business, many environmental groups oppose the turbines because they kill birds. This article says that while “…the federal government has prosecuted hundreds of cases against oil and gas producers and electricity producers for violating some of America’s oldest wildlife-protection laws: the Migratory Bird Treaty Act and Eagle Protection Act,” it “has never prosecuted the wind industry despite myriad examples of widespread, unpermitted bird kills by turbines.”

How can we explain these policies? We pass big tariffs to keep cheap solar energy out of the country. We subsidize wind power, when the industry itself says it survives only because of this government favoritism. The favoritism to the industry doesn’t stop there. We prosecute other energy producers for bird kills, but we give the wind industry a pass when they kill more than 10,000 birds every year. It doesn’t make sense as energy policy. But there is one explanation consistent with all these policies.

Crony capitalism.

Randall G. Holcombe is a Senior Fellow at the Independent Institute, the DeVoe Moore Professor of Economics at Florida State University, and author of the Independent Institute book Liberty in Peril: Democracy and Power in American History.
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