"It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong." Richard P. Feynman

Wednesday, April 7, 2010

Market Inspired Environmentalism in the UK (Paid for By the Taxpayer)

THe Huffington Post's idea of Market-Inspired- Environmentalism  could very easily be translated as Taxpayer-Ladling-Out-Money-On-Useless-Projects-Environmentalism.. When the Government is throwing money at companies of course they will all line up at the trough but this is not market-inspired - none of these ideas would stand a chance in an open market.

The UK seems to be cooling on fossil fuels and finding alternatives in Schumpeterian "animal spirits" of competition. As part of its efforts, the UK Department of Energy and Climate Change last year launched the Low Carbon Community Challenge, which awarded cash to 22 communities in England, Scotland and Wales for viable ideas to fight climate change. Most of the ideas involve community-supported renewable energy projects, such as turbine or solar panel installation. Excess power generated will be passed back to the grid to earn cash.

Contests like these have become popular of late, and it is not hard to see why--the prize money is a lot less than what it would cost the sponsor to seed all the innovations that come out of it. And sponsoring a community contest also brings the added benefit of getting group buy-in before the turbines go up, offsetting the NIMBY-ism seen in places like Nantucket and Long Island.
For the Economics- Challenged Wiki defines Schumpeter thus:
In Schumpeter's vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power.
I don't think Schumpeter's vision at any time encompassed paying five times the market price for products such as electricity from wind power and then applauding how great it is to have "free" energy. Mankind has not advanced far from  the primitive society that placed a massive part of it's output into building pyramids- monuments that simply consumed enormous resources with no measurable return on investment for the citizenry.
We are now being asked to divert huge amounts of money from a world that cannot feed it's millions of poor or treat it's millions of sick and diseased, to a modern day equivalent of the Pyramids ,which is the chimera of solving  the non-existent problem of human-caused Global Warming .

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