The Failures of Environmentalist Big Government

This morning, the Energy, Climate, and Grid Security Subcommittee of the House Energy & Commerce is holding a hearing called, “From Gas to Groceries: Americans Pay the Price of the Biden-Harris Energy Agenda.”

The title sums up the usual free-market case against environmentalist central planning well. Subsidies and hyper-regulation warp price signals and skew the resulting investment and consumption habits of industry and consumers. Such a jumbling of incentives and markets yields inefficiencies, which, in turn, raise prices, lower output, and generally retard prosperity’s advance. High energy costs spread economy-wide, raising prices in myriad sectors. And for good measure, green-energy subsidies parch America’s already bone-dry public fisc, at an ever-ballooning cost to taxpayers.

But another question demands consideration. In far too many cases, environmentalist policies fail to secure their own objectives – quite apart from their economic ills. They achieve support in Congress, in federal administrative buildings, and among the left-wing intelligentsia for their purportedly environmentalist aims, yet they often dodge political accountability for the fact that they cannot deliver. This classic error of central planning – judging policies, pre-enactment, by their intentions rather than by their practical results – infests energy and environmental policy debates especially.

A recent article in Science – no bastion of right-wing thought – reports that just “63 successful policy interventions with total emission reductions between 0.6 billion and 1.8 billion metric tonnes CO2,” among the 1,500 policies studied. The sample set included climate policies spanning nearly two-and-a-half decades, 41 countries, and six continents.

The authors identified a Hayekian problem (TPA’s label, not theirs). Different industries, and economies in differing stages of maturity, respond differently to policies aiming to reduce emissions. Regulators have imposed myriad inapt policies, yielding results that – by environmentalist standards – fall short. Such a failure of imagination, knowledge, and planning seems an inevitability to someone who has read Basic Economics or The Fatal Conceit or Economics in One Lesson, yet this insight evades technocrats everywhere.

In another recent report, the Breakthrough Institute discovered that just one in five appeals lodged under the National Environmental Policy Act (NEPA) succeeded. “Our findings suggest that NEPA litigation at this level rarely changes environmental outcomes or protects environmental justice communities,” the Breakthrough Institute states. “Instead, judicial review of NEPA decisions largely serves as an advocacy tool for a small number of well-organized nonprofits to stall projects that do not align with their values.”

This success rate suggests that NEPA litigation serves a function other than environmental protection. Indeed, activism-by-litigation serves to obstruct economic activities of all kinds, irrespective of their impact on the natural world. As Taxpayers Protection Alliance senior policy analyst Juan Londoño put it, “This…study found that this litigation process takes just over four years to complete. In essence, projects are subjected to years of delay because of these lawsuits. To make things worse, the study found that non-governmental organizations (NGO) started 72 percent of the total challenges, with just 10 NGOs being responsible for 35 percent of those lawsuits on their own.”

Finally, consider the federal government’s perpetual evangelism – evangelism consisting of both rhetoric and subsidies – for electric vehicles (EVs). According to a Texas Public Policy Foundation report from last year, the average EV benefits from nearly $50,000 in federal and state subsidies. This predates the Inflation Reduction Act (IRA), an inflationary law whose EV subsidies will likely cost nearly $400 billion.

Despite this staggering allowance, EV manufactures have foundered. American consumers remain skeptical of a full-scale departure from combustion engines. Ford announced in April that its EV unit bled $1.3 billion in the first quarter of 2024 – with a projected $5 billion loss for the full year. That amounts to “$132,000 for each of the 10,000 vehicles it sold in the first three months of the year” (per CNN). Several auto manufacturers have retreated from ambitious – and subsidy-driven – pledges to electrify their fleets in just a few short years; and some, such as Toyota, have explored the far more sensible path of hybrid vehicles. The mandates and subsidies, the cajoling and the scare-mongering, have done far less than environmentalists hoped.

Too many lawmakers take the Hamletian approach that no policy is either good or bad but thinking makes it so. But the laws of basic economics are not so easily shuffled off. Policies deserve praise or blame according to their effects rather than to the rhetoric deployed in congressional debates or on cable television. Environmentalist policies cannot escape the fact that they fail routinely on economic, on fiscal, on moral, and – most inconveniently – on environmentalist bases.