Re: Nukes

I still don't know where I come out on this. Cato clearly wants the market to decide, as from this July 2005 Washington Times article:

The intellectual case for killing energy subsidies instead of adding more is fairly straightforward:

* First, if private investors are unenthusiastic about, say, investments in nuclear power plant construction, it's probably for a good reason. Do politicians [me: probably better to say the bureaucrats they appoint because we all know that civil servants aren't political] really know more about the wisdom of that investment than the individuals who stand to lose their shirts if they make the wrong economic bet?

* Subsidies distort useful and important price signals. If the unsubsidized cost of hydrogen cars, for instance, is more expensive than the unsubsidized cost of hybrid cars, that means the resources to produce hybrid cars are more abundant than those to produce hydrogen-powered cars.

* Subsidies often do as much harm as good for their intended beneficiaries. By providing some protection from market forces, they deaden incentives for economic and technological innovation. Recipients too often grow fat and lazy at the federal trough. Look at the ethanol industry, which, after decades of massive subsidies, still can't compete without them.

That's not to say government has no role in energy markets. Energy generation and consumption are two of the most significant sources of industrial pollution. At the same time, air and water sheds are shared by all who live within them. Those who believe government should protect property rights should demand their government fight pollution to protect the value of their property and their health. So, for instance, the federal government should not override state and local governments that want to block LNG terminals or transmission line construction, as proposed by the House and Senate bills.

For a full list of the Cato articles, look here. Cato certainly has a dog in this fight because of its focus on the purity of the market. I did not find similarly negative accounts at American Enterprise Institute, Competitive Enterprise Institute or Tech Central Station though they, too, bemoaned the subsidies.

While I'm as much of a Milton Friedman fan as anyone, I'm still not convinced that it may not be worth subsidizing in the name of national defense or the environment if warming really is caused by our collective carbon footprint. On the other hand, if the US were to completely wean itself from foreign oil, aren't China and India just waiting in the wings...still enriching those who want to kill us and filling the atmosphere with icky stuff? And, on the gripping hand, I still hate subsidies.

An interesting aside that you'll just have to trust me on since I didn't keep the links, at least one or two leaders/founders of one or two of the more will known Green Groups who reluctantly embraced nuclear energy as a way to reduce the carbon output are now ex-members of those groups.