Originally published at RLC.org
Liberty Republicans, given our belief that wealth creating market based initiatives are superior to those subsidized by taxpayers via government, are often accused of opposing green energy and other so called pro-environment schemes. Many on the left seem to believe that if you’re for the pro-growth policy of letting investors and entrepreneurs hash it out in the private sector without government interference, it in turn means you must have no regard for the environment.
As a libertarian who is very much pro-environment and extremely interested in alternative energy and ecological stewardship, I of course reject that premise. I’d contend that part of the problem with our energy and environmental policies are the fact that as government gets bigger, elected officials don’t hesitate to jump into bed with giant corporations, in turn, yielding a firestorm of status quo protection behind closed doors. Yet in the meantime, to coddle various constituencies, while the aforementioned cronyism disguised as capitalism distorts the market, politicians offer shallow “green” initiatives subsidized by redistributing our money, all while suppressing legitimate alternatives that could potentially compete in the market.
For example, the 2006 documentary, Who Killed The Electric Car?, points out the fact that the oil industry, through its lobbying group Western States Petroleum Association, financed campaigns to suppress the EV1 car in the marketplace, and worked closely with the federal government to see that its needs were met. If an electric car cannot compete in the market on its own, or without the aid of a legislative mandate (as in California), then it should fail. But if legitimate greener alternatives are being suppressed by corporatism, that’s highly problematic. Frankly, I have a hard time imagining that more intervention from the federal government of the United States, the world’s most powerful monopoly, will solve the problem of giant corporate interests, who are friends to DC politicians, suppressing market competition.
However, despite, if not directly in protest of the aforementioned distortions, I’m extremely interested from a free market perspective in the work that Patrick Cox, a technology watcher and self-described “transformational profit seeker” with Agora Financial, who has worked extensively with an up and coming energy alternative based on thorium. In the wake of the Fukushima meltdown disaster in Japan, Cox believes that despite negativity about nuclear power, the use of thorium as opposed to uranium is a game changer.
As the Baltimore Sun recently reported:
“Patrick Cox remains bullish on a nuclear renaissance despite Fukushima, and his reason is about the size of a golf ball.
‘Imagine,’ he says, ‘a piece of rock the size of a golf ball giving a person a lifetime supply of electricity. A piece the size of an SUV could give a lifetime supply of energy to a town of about 50,000 people.’
If there is ever going to be a nuclear expansion sufficient to significantly reduce coal-fired (and greenhouse gas-producing) electrical generation, thorium may be the answer, say its supporters. It can solve a lot of the problems associated with the present generation of nuclear reactors and instill public confidence in atomic energy as the long-term alternative to fossil fuels.”
Sounds interesting. But, can thorium compete in the market with cronyism distorting outcomes? Will it inevitably end up incorporated into a program rife with federal subsidies because government regulation of energy will never allow for real market competition? What does the future hold for this potentially world altering silvery metal?
Patrick Cox was kind enough to provide the Republican Liberty Caucus with his insights.
Mr. Cox, as we’re sure you’re quite well aware of, there’s been a lot of buzz about green energy coming from DC politicians. However, it seems that so many of the initiatives they champion rely heavily on government subsidies. For example, Section 1603 of the Recovery Act gave programs direct cash grants for “green jobs”, and it is estimated that this legislation led to one fourth of all wind power capacity installed in the United States in 2009. Given your career as a technology watcher and the work you’ve done researching and working with thorium, do you believe that thorium ultimately has enough inherent value to compete in the market as a legitimate, and greener, energy alternative?
I’m not actually sure what “green energy” is. As Bjørn Lomborg and many others have pointed out, air and water quality in the developed world is better than it has ever been. In fact, the correlation of high environmental qualities with economic progress would indicate to me that the best way to assure a clean environment is to allow the economy to grow. Because energy is the largest sector of the economy and energy costs are included as a major component is virtually all product sectors, the best way to encourage economic growth is to lower energy costs. Raising the cost of energy acts as a subtraction to economic growth. Forcing the use of higher cost energy slows economic growth and therefore makes it more difficult to implement expensive pollution control measures.
I don’t consider CO2 a pollutant, by the way. Having seen CO2 models fail spectacularly in the last few years, I think it’s pretty obvious now that the scientists who have been saying that solar cycles are the primary climate driver were correct. I speak regularly with some very wealthy investors and the really smart money has been betting that we are entering into a period of global cooling for some time. Recent announcements by the American Astronomical Society reinforce my projections of global cooling, bolstered by falling ocean temperatures.
As for government subsidization of so-called green energy, the Spanish experience has shown that you cannot create wealth by raising the cost of energy, which is the practical effect of green energy policies. While consumer prices might appear to be competitive, the actuality is that total costs are higher despite subsidies.
The associated Keynesian argument that “green make-work” creates employments also discredited, though it was never believed by anyone with any actual economic educational background. Even the president’s ex-advisor Christina Romer has pointed out that there is a significant and negative multiplier effect caused by the transfer of resources from the economically self-sustaining private sector to the government sector. Green energy is a transfer of resources away from markets to non-market activities and, as such, is a drag on economic growth. Subsidies and tax incentives slow economic growth and create unemployment.
Thorium, however, is ridiculously abundant. America has all of the mineral it needs for many thousands of years of electrical power. It is also inherently safer than current nuclear technologies for many reasons including proliferation resistance, waste elimination and reactor design. Even current uranium nuclear technologies, by the way, are safer than many other energy sources, including coal. Read my old friend Petr Beckmann’s work in this regard.
Do you agree that corporatism, or rather, a strong relationship between big government and big corporations, plays into the suppression of potentially successful alternative energy initiatives? If so, do you believe this, at least in part, debunks the claim that looking to government as the exclusive provider of green energy alternatives is the wrong path for America’s future?
Of course, corporatism is a huge drag on innovation. Existing industries naturally use their clout with government to squelch competition and innovation. This is particularly true with regards to nuclear power, which is far more regulated even than pharmaceuticals.
Given significant increases in gas prices recently, there’s no doubt that general discussions about energy policy will play a large role in the 2012 elections – particularly the Republican primary. Do you think discussions about thorium, especially as a way to offer an alternative to current policy, will be on the table? If so, do you see thorium being dealt with from a top down, federally subsidized approach, or do you think that thorium will rise to prominence on its own merits through free market initiatives and private investment?
I have no idea whether or not thorium will become a political issue. I expect you’re a much better judge of such matters than me. Incidentally, “than” is both a preposition and a conjunction. Even in England where it is considered to be only a conjunction, “than” requires the object pronoun. Anyway, there will have to be at least some top-down change before thorium can compete iin the marketplace simply because nuclear energy is so regulated.
Do you think that political opponents of nuclear power – both those who are against it for environmental and/or safety reasons, and those who oppose it to protect their own interests in the energy industry – will come out against thorium, or stay silent on the matter? Given your prediction, how will the outcome impact energy policy moving forward?
The usual suspects have already come out against nuclear power of any kind, which axiomatically includes thorium. The coming elections will undoubtedly play an important role in determining whether American energy policies are aimed at reducing energy costs or achieving “green” fantasies.
Fortunately, the rest of the world is pushing thorium hard right now. Red Star in Russia is the largest supplier of reactors in Asia and they’ve got a prototype thorium reactor running now. Recently, the French reactor company, Areva, began developing thorium plans. Areva sells most of Europe’s reactors. India is now burning thorium commercially and China has announced intentions to rapidly develop thorium reactors.
Thorium will be used in the next generation of reactors regardless of what Americans do. As an investment adviser and economist, my focus has to be on helping my people prosper, not on American policy. Given the global electronic community, there are many ways for individuals to profit from this technological revolution.
Personally, however, it irks me. We are being left behind, which is ironic because Americans Edward Teller and Alvin Radkowski were the original proponents of thorium nuclear energy. In fact, the first full-scale civilian power plant, designed by Radkowski, came online in 1956 and burned thorium. When you hear people saying that it will take many years to develop, you can rest assured that they are wrong. It may take many years for the bureaucrats to approve thorium fuels and reactors but it’s not a difficult on a technical basis.
Unfortunately, “progressive” anti-nuclear activists allied with the traditional uranium reactor industry have successfully kept America from implementing thorium power. There is no physical energy shortage. We have government created shortages. There’s more than enough affordable energy in America if we were allowed to develop it. We could then stop sending trillions to foreign sources unfriendly to democracy and American interests, by the way.