Energy Reform

by Handsome Matt

While a free market might be the best way to reward innovation, free markets are also subject to being manipulated and restricted by a group of powerful players.

Take the US automotive or banking industries. A few key players become strong enough to influence their market and disaster follows.

In the US there is no economic incentive to adopt environmentally sustainable measures and practices. Because of that, they have languished away, unless a company needs to develop some “green” credibility (Chevy Volt for instance).

The circular argument about renewable energy is a prime example of the current landscape for energy reform in the US.  It’s a circular argument. Renewables only account for 1% of US energy, therefore they can’t provide for everyone.

What needs to develop then, is an energy reform policy that is based in common sense, funds itself, AND is enforceable.

Why common sense? Because there is a move towards the frivolous in the environmental movement. If solutions are based in common sense, then people will adopt them and use them. This is the desired outcome: Mainstream saturation. If the masses won’t embrace it, then it will never take off.

Self- funding. Government agencies and certain US businesses don’t have to worry about the bottom line. They can spend and spend and never worry about going out of business. The sustainability movement doesn’t have that option. If it can’t be profitable, or at least break even; then it can’t be used.

Easily enforceable. The Clean Air act was easy to enforce, MPG requirements should have been, the Kyoto Treaty wasn’t. Which one of these three has continued to be enforced? Exactly!

Here’s an example:

Plastic bags are a serious environmental issue. They don’t easily degrade, but they do get blown out of landfills fairly easily. Reusable bags are environmentally friendly but no one really uses them. For one big reason: reusable bags cost money! There’s no incentive to change.

If we flip the current system on its head though:

Every plastic bag has to be purchased. Say $.20 a bag. If you buy five bags of groceries every week, for a year that’s $52.00 wasted. Money out the pocket.

There are two options that could be employed: Give away reusable bags OR use deposits.

If reusable bags only cost $.50 to purchase. After a few months they will have paid for themselves. And then over their ten year lifecycle, will have saved $500.

The second option is to charge a deposit for plastic bags. Deposits work, in fact they worked for years with glass bottles, and still do in many countries around the world. If plastic bags have a deposit on them, then the incentive is to return them to the store. In fact, a few bucks can be made picking up OTHER plastic bags…

A similar strategy is used for automotive parts. It’s called a “core charge,”  and it encourages the return, recycling, and refurbishing of many auto parts.

In fact, if everything had a deposit associated with it, people would be more likely to recycle or return those items to be properly disposed. Think about someone getting a $100 for recycling a computer or appliance or $1000 for recycling a car.