Thursday, March 26, 2009

My Comments to the House Energy Committee

Herein, a portion of my prepared comments to yesterday's meeting of the House Energy Committee:
Delaware’s environmental advocates learned a great deal during the successful fight to bring offshore wind power to Delaware. We learned to work more closely together, and we developed an appreciation of the importance of economic analysis in reviewing environmental policy.
The public discussion about energy reflects a changing understanding of the interplay between our economic interests and environmental interests. The conventional wisdom that the public’s environmental interest is in conflict with the public’s economic interest is out of date. Instead, policy makers and the public are coming to understand that our economic and environmental interests are closely aligned.
I would like to cite three brief examples of how economic analysis can be used in support of sound renewable energy policy:
1. Health costs
Governor Markell has asked the Department of Natural Resources & Environmental Controls (DNREC) to formally intervene in the Integrated Resource Planning (IRP) docket before the Public Service Commission (PSC). Specifically, he has asked DNREC to put public health costs on the table as part of the PSC docket. This will tip the scales significantly in favor of renewable energy and against continuing dependence on coal.
These costs are considerable. Delaware’s Medicaid budget exceeds one half of one billion dollars; so health costs can hardly be considered to be incidental to a public discussion on energy policy.
2. Fossil fuel scarcity
As we learned in the debate over wind power, long term scarcity of fossil fuels will make renewable energy more attractive over the long term. And, when the costs of carbon emissions are factored into the costs of burning fossil fuels, renewable energy sources look more economical in comparison.
3. Economic opportunities
Finally, we are just becoming aware of the ways the burgeoning field of renewable energy offers new economic opportunities just when we need them. Nancy Floyd of Nth Power, a firm that invests in new energy technologies, has compared the clean energy business to the computer industry when the Macintosh came out in 1984. Who wouldn’t want a piece of that?
Finally, as to whether there may be some tension between promoting green industry and the old fashioned work of environmental protection, I do not see such a tension.
A thorough regulatory regime should capture all the costs and benefits of clean and dirty enterprises, making it easier for green industries to compete. Lax regulation of polluters is a form of subsidy. A polluting industry may show a profit to its investors, but generate costs that don't show up on its books.
For instance, it has been estimated that capturing carbon from coal plants will increase costs at least 20 percent. Once coal power plants are required to take on those costs, either through new technology or a cap and trade system, the net costs and benefits of clean power look much more attractive. Seen in this light, attracting green industry requires that we not subsidize polluting industry through lax regulation.
In summary, we see a firm commitment to renewable energy as having multiple benefits to Delaware’s economy in terms of health costs, energy costs and economic opportunities.


Blogger Nancy Willing said...

In all seriousness, Tom, Markell could use you in his admin. as nuch as you are doing from the outside.

6:55 AM, March 27, 2009  
Blogger Tom Noyes said...

Thanks Nancy, it's kind of you to say so.

For the moment, I'm having fun working with my friends on promoting sound environmental policy.

9:39 AM, March 27, 2009  

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