Great opinion columns by Robert Samuelson in Washington Post and Peter Wallison in Wall Street Journal. Repeal of Dodd-Frank’s authorization for Fed to supervise all significant non-bank financial firms would help avoid future financial meltdowns by discouraging “herding behavior,” promote economic stability and growth, thus easing the economic burden of supporting the U.S. welfare state.
See my thoughts on the economic impact of Swiss nuclear phaseout in today’s Wall Street Journal. Nuclear Exit Comes With Costs Switzerland’s Reliance on Reactors Means Switch to Other Sources Will Be Expensive By GORAN MIJUK ZURICH—Going green isn’t cheap, as Switzerland is about to discover. Earlier this year, in the wake of the meltdown at the Fukushima nuclear plant in Japan in March, the Swiss government and parliament decided to get out of nuclear-power generation by 2034. Switzerland has been a net exporter of electricity during the past few decades, profiting from the production of cheap nuclear energy and huge hydropower reserves. This has helped it build a strong machinery and engineering industry, nursing industry giants such as ABB Ltd and Sulzer AG, which benefited from stable and reliable electricity supplies. But since the country’s five nuclear-power plants generate about 40% of its electricity, the switch-over to other forms of power generation is going to be costly. “According to our initial estimates, we expect investments of some 100 billion Swiss francs ($108 billion) to replace the reactors,” says Sabine von Stockar from Energiestiftung Schweiz, a renewable-energy think tank. This, Ms. von Stockar says, doesn’t include the cost of dismantling the plants,…
My response to this week’s question on National Journal Energy & Environment Policy Experts Blog: The clean air rules put forward by the Environmental Protection Agency will have a profound impact on our struggling economy. EPA’s own data show that the CAA of 1990 have had a negative impact on GDP and growth see figures from EPA modeling here. The new rules are certain to add the uncertainty to the cost of electrical generation as well for other energy using and producing industries. Signs of the impact of uncertainty on the U.S. economy can be seen in the fact that gross private domestic investment is still $327 billion lower in the 3rd quarter of 2011 than in the 4th quarter of 2007 see chart. Each $1 billion loss in investment is associated with 15,000 to 22,000 fewer jobs. In my testimony from February 2011 to the House Energy and Power Subcommittee on the impact of EPA’s regulation of GHGs under the Clean Air Act, I highlight that if U.S. capital spending declines by $25 to $75 billion, in 2014 there would be an economy wide job loss of 476,000 to 1,400,000 when direct, indirect and induced effects are included. As a…
I had a great dialogue with a group of bright eighth grade students today at Westminster Schools in Atlanta, GA. We spoke for close to an hour over Skype on a lot of interesting topics including whether or not we should have a carbon tax, if and when the price of renewables like solar panels and hybrid cars will ever come down, and whether or not the government should be funding green energy projects after Solyndra. The students also asked my opinions on the Kytoto Protocol. Throughout the conversation I underscored the fact that climate change is a global issue and therefore needs a collaborative approach that brings on all nations, particularly developing nations like China (whose GHG emissions exceed those of the U.S.). I also highlighted the importance of making wise choices in energy subsidies and not to pick risky ventures that don’t attract private investment. Any type of policy approach to tackle climate change must look at the costs and benefits, particularly now with our struggling economy. U.S. proposals like cap and trade, carbon tax and others that don’t bring developing nations to the table put a strain on our industries and economy, resulting in job loss, higher…
You can read my op-ed “The High Price of EPA Regulations” in The Hill newspaper today. The high price of EPA regulations By Dr. Margo Thorning, senior vice president and chief economist of the American Council for Capital Formation – 10/24/11 The Environmental Protection Agency (EPA) faced scrutiny on Capitol Hill again this week over the high costs of its record number of environmental regulations. During a hearing of the House Oversight and Government Reform Subcommittee, the agency’s air chief denied consequences of the Clean Air Act on jobs and the economy and argued that her agency’s rules relating to automobiles and fuel economy actually creates jobs and support small businesses. These claims echo those of EPA Administrator Lisa Jackson, who testified earlier this summer before the Senate Environment and Public Works Committee and cited specious economic benefits of the Clean Air Act Amendments of 1990. An EPA report “The Benefits and Costs of the Clean Air Act from 1990 to 2020” states that the economic value of the Act’s air quality improvements will “reach almost $2 trillion for the year, a value which vastly exceeds the cost of efforts to comply with the requirements of the 1990 Clean Air…
Treasury Department’s Jan Eberly recently made a bold and puzzling statement that there is no “data” to support the notion that regulatory uncertainty is holding back hiring and economic growth. Signs of the impact of uncertainty on the U.S. economy can be seen in the fact that gross private domestic investment is still $327 billion lower in the 3nd quarter of 2011 than in the 4th quarter of 2007 (see chart below). Each $1 billion loss in investment is associated with 15,000 to 22,000 fewer jobs. The federal government clearly recognizes this phenomenon as pointed out in a statement from the Energy Information Administration that the cost of capital for a coal-fired utility investment could rise by 42% (from 7% to 10% or a 3 percentage point increase from 7%) due to the uncertainty surrounding environmental regulations is a sign the government recognizes this phenomenon. From EIA: “Although currently there is no Federal legislation in place that restricts greenhouse gas (GHG) emissions, regulators and the investment community have continued to push energy companies to invest in technologies that are less GHG-intensive. The trend is captured in the AEO2011 Reference case through a 3-percentage-point increase in the cost of capital when evaluating…
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