Friday, October 2, 2015

How Expensive is Transforming Our Energy System, Anyway? (Part 3 of 13)

(Note: This is the third of a series of posts dealing with Bernie Sanders's platform. For the first installment, go here. Part 2 Part 4 Part 5 Part 6 Part 7)

I saw this posted on Twitter the other day, and I think it's worth taking a second look at, because it demonstrates a remarkable lack of understanding of Bernie Sanders's platform. Senator Sanders makes it very clear how we will pay for everything that he proposes, but understanding the nuance of this requires first that I disabuse you of a common misconception.

There are many in this country who decry government spending as if the government is incapable of doing anything well. But the critical issue of our times, as Robert Reich eloquently explains on a regular basis, is not how big government is. The critical issue of our times (and Bernie Sanders, more than any other Presidential candidate, understands this) is who government is working for. Whether we're talking about spending in the private sector or spending by the government, at the end of the day, everything that is spent in our economy counts as a cost for America. If Wal-Mart spends $1,000,000 improving the efficiency of the intersections near its stores, it has the same effect on our economy as if the state, local, or federal government spends $1,000,000 on an identical project.

So, with that in mind, how does America pay for Transforming our Energy System, as described in the flyer pictured above? Let's take a look:

This is another one of those issues where Senator Sanders hasn't released his official policy position yet, so we're going to rely on our good friends at to give us the basics of his position on Energy Policy. The short version is that Senator Sanders wants to replace dirty fossil fuels (coal, natural gas, oil) and unsafe nuclear power with clean renewables (wind, solar, geothermal), with the ultimate goal being to have the United States produce 100% of its energy from such replacement sources.

Before we can determine the cost-effectiveness of such a transformation, we must first understand how much our current energy system costs. Even leaving aside the health, infrastructure, environmental, and national security costs of fossil fuel use, fossil fuels in our current system cost the government between $10 and $52 billion annually in subsidies alone.

I can't find figures for how much it would cost to convert the United States's energy supply entirely over to renewable sources, but I found a report produced in 2013 that estimated the total cost of converting the entire world's energy supply to renewables at £29.46 trillion, or approximately 21% of global wealth. Using the United States' record-breaking level of wealth in 2014, $80.7 trillion, then assuming the United States is no more or less relatively costly for renewable energy conversion, the entire conversion would cost $16.9 trillion. If we spread that over ten years, it would cost around $1.7 trillion per year. This is just slightly more than the United States spends on healthcare every year, and would not be a permanent budget item, but rather would drop off drastically after ten years.

When we consider that burning fossil fuels costs the United States $120 billion a year in additional healthcare costs, the $1.6 trillion a year we have already committed to maintaining our current oil-based transportation infrastructure (including maintenance, new vehicles, and fuel), then even if we ignore the environmental/climate effects of fossil fuel usage and the military costs of protecting our supplies of fossil fuels, can we really afford NOT to convert our energy system?

It's important to keep in mind that all of the above assumes that the federal government foots the entire bill for this conversion which is, of course, a preposterous suggestion since the United States is not (and would not be under Bernie Sanders) a nation where the government owns the means of production. Democratic socialism is not incompatible with capitalism, and a proposal like Senator Sanders' proposal would obviously include substantial private participation.

At the end of the day, Senator Sanders believes that sometimes the government should be involved in picking winners and losers in the economy, and when it comes to energy production, clean, renewable sources of energy will be the winners in the long run, and the government can help speed that victory along by backing them now with (at a minimum) a reallocation of the $10 to $52 billion in subsidies currently spent on fossil fuels to renewable energy sources instead.

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