Tuesday, 28 October 2008

Energy independence

"Energy independence" is one of those ideas that just doesn't go away, no matter how long you send explaining to people why it's crazy. Just look at the current US presidential campaign where both McCain and Obama think it's a good idea. To see why it's not such a good idea read David Henderson at the EconLog blog. He writes
One issue that has arisen in this campaign is the issue of "energy independence." Both McCain and Obama believe that moving towards energy independence is a good idea. But, as I pointed out in this month's The Freeman, it's not. Energy independence is no more desirable than coffee independence, banana independence, or car independence. The case for free trade does not break down just because the good being exchanged is important, as oil is. It doesn't generally make sense, if your goal is the wellbeing of country A's citizens, for country A's government to impose tariffs or import quotas on a product from other countries. Even if we put the moral arguments against coercion aside, and even if we nationalistically care only about Americans (I don't care only about Americans), the gains to the domestic producers from reducing trade are less than the losses to domestic consumers. I won't repeat that argument here because you can go to The Freeman to read it.
The Freeman article he refers to above is available here. Read it and the rest of Henderson's blog posting.


Ron Bengtson said...

Energy Independence is about national security:
"Extremists on the political Right mistakenly believe that energy independence will mean a retreat from global economic interdependence, a direction that would disrupt the global free market and lead America toward economic and political isolation.

"In contrast, extremists on the political Left mistakenly believe energy independence will mean independence from all hydrocarbons and nuclear energy. Green extremists confuse energy independence with environmental issues. Energy and environmental issues do converge in the issues of resource sustainability and environmental pollution, but otherwise energy independence is not an environmental issue.

"It is important to understand that energy independence does not mean closed borders or economic isolation. Energy independence will be achieved by producing abundant, clean and affordable domestic energy through new technology that will enable all countries to do the same. The path to American Energy Independence leads to global energy independence."

Anonymous said...