One plank of President Obama's economic recovery plan involves investing in cleaner energy infrastructure and resources. It is good, common sense conservation that we should applaud vigorously. However, it is accompanied by serious discussion of targeting technologies and channeling investment into some things that are greener than they are good. This could be dangerous in a lot of ways--as our recent experience with ethanol subsidies shows, governments can mess things up when they decide to support a technology for political reasons.
And it's not just governments. General Electric, a hard-headed, intelligent organisation that has made profits in almost every way possible, made the decision a few years back to target the green market. If you look at their stock price over the time period since they made that decision, you have to wonder what prompted their decision. To be fair, the recession hammered their stock price along with everybody else's, and the green market may require patience--GE may yet be rewarded for this decision. As a stockholder, I certainly hope so. But I hope they won't be rewarded by misallocated government spending that is targeted by wrong assumptions. In the long run, that will benefit no-one.
We don't yet know what the best way to produce electricity will be in five years' time. It may be nuclear, wind, solar, natural gas, tidal... most likely some combination, which will require serious thought and good planning. We don't yet know the best way to power personal transportation five years out.
We do know how to insulate houses and reduce energy consumption in large buildings.
We do know how to stimulate and finance effective research into best practice regarding energy.
We do know how to reduce energy consumption.
We should start there and wait for science (and yes, market decisions) to lead government investment decisions down the road.
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