Economic Literacy is in Short Supply... Even Among Economists

This op-ed recently appeared in the News and Observer: N.C.'s Greener Energy Future
It makes many of the same fundamental economic errors made by Amory Lovins, except in this case the author is not an "energy guru" but rather a professor emeritus of economics from Duke University. I find this quite mystifying, but honestly the entire exercise is quite sharply out of sync with reality. The author sets up a false dichotomy between "renewables and efficiency" and "coal and nukes," as if these two were an either-or proposition. Although there's a lot to criticize here, I'll point out a few things that stood out:

"Beyond that, the renewable sources represent relatively minor and invisible changes in the energy system. There would be upgrading of some hydroelectric stations, some generators installed in existing dams and some run-of the-river generators."

I'm living in North Carolina right now, and there happens to be a rather significant drought at the moment. Indeed, it's the worst one since records began being kept. Cities and towns all over the state are imposing water restrictions. At this rate, new hydroelectric systems are not in our future. Indeed, we need to upgrade our infrastructure just to supply our domestic water needs.

"La Capra concludes that turning to these power sources would create thousands of new jobs -- far more than would be created by building and operating more coal and nuclear plants. And clean energy jobs could be distributed across the state, rather than concentrated in one or two counties."

If I may be so bold, I would like to refer the reader to my post in which I address this subject at length.

"North Carolina is standing at a clear fork in the road. One path, preferred by most of the public, involves developing our renewable electricity sources and using all of our electricity much more efficiently. This choice also avoids adding still more greenhouse gases, as we see ever more clearly the risks posed by global warming.

The other path, unaccountably favored by the large utilities, leads to huge and risky investments in coal and nuclear power plants. The utilities' shareholders and ratepayers, along with taxpayers, would bear the risks of huge investments in those obsolete and archaic behemoths, while the rest of the nation moves belatedly into a new energy era."

I don't even know how to address this argument. There's no reason why investing in nuclear power, efficiency, and renewable energy simultaneously is not a viable plan for addressing global warming; just look at England. Indeed, the entire argument appears to be founded upon a false premise.