Let the Free Market Turn Missouri Green!
Gov. Jay Nixon wants to make Missouri a green state. According to an article in the Missouri Watchdog, the governor sent a letter to the leaders of the Missouri General Assembly encouraging them to pass legislation that supports the development of energy alternatives. From the letter (emphasis in the original):
My administration looks forward to working with the General Assembly to determine where those sources of renewable energy must be located in order to carry out the will of the people and promote a renewable energy economy in Missouri.
Sounds good, huh? Greener energy is a good thing for Missouri, right? Unfortunately, this is a problematic way to get to that goal. I strongly support the development of renewable energy, but I do not want the state to subsidize it!
The free market and basic economic forces, not government programs, will determine the development of alternative fuels. When the government enacts policies that impose higher mandates for alternative energy, such as the 2008 Missouri Renewable Energy Initiative referenced in the letter, it imposes high hidden costs and defeats its ostensible goal of helping the environment.
Just as government officials don’t know the socially optimal mix of any set of products and services, they do not have special predictive power, nor do they have access to perfect information. Politicians can’t identify new technologies and business opportunities as well as the unrestricted market can, because they are too far removed from the science of energy technologies to know the optimal state of the market. Plus, government is slow to react to changes in the economic environment because it is bogged down in bureaucracy.
Furthermore, when lawmakers in Jeff City roll out proposals for encouraging the development of alternative energies, Missourians would be wise to question whose interests their elected officials actually have in mind. Policymakers often bend the truth to promote their own political agenda, under the guise of helping the environment. Corn ethanol, which we discuss frequently on Show-Me Daily, is a classic example. Al Gore touted the corn ethanol industry with the ostensible goal of helping the environment. Last November, he changed his position on ethanol, admitting that he had previously supported ethanol as a means of pandering to Iowa voters. Gore had the interests of his political career—not the environment—in mind.