The President has just rolled out a call for Congress to establish an Energy Security Trust. The revenues for this fund would provide $2 billion dollars for funding research and innovations that help us move away from nonrenewable energy sources and towards domestically produced renewables. The idea as I understand it is to take the federal oil and gas dollars that are currently sent directly to the US Treasury with no particular restrictions on their federal budgetary use, and earmark them for the trust so they go specifically to the development of alternative energies.
I see Obama’s point, that dedicating these moneys specifically for alternative energy development makes sense because its using the funds of non-renewables and directing them specifically towards meeting the challenges of developing the market and culture for renewable energies. But this doesn’t address the fundamental issue of cost externalities inherent in oil and gas profits- that is, this uses money that is already around and presumably has a function in the federal budget, and doesn’t introduce any way to internalize the external costs of oil and gas or incentivize changes in behavior the way a strong carbon tax could.
Forbes has said this is a bad idea because it is a backdoor to a carbon tax and because it constitutes budgetary pigeonholing and establishes an oversight role for Congress in energy development that they shouldn’t necessarily have and arent necessarily good at. To some extent, I can see their latter point, especially from a capitalist’s perspective, that letting the market innovate and compete to create the best technology can be most efficient, and the last thing we want is for congress to use this as one more opportunity for pet project earmarking which, sadly, happens far too often with dedicated federal budget streams. But I absolutely disagree this is a back door to a carbon tax- I think this is just the opposite, it sounds like the Administration’s way to find something more politically palatable than the carbon tax, which again, gets us nowhere in terms of internalizing costs of oil and gas to the general public.
So, while I applaud the Administration’s commitment to moving us towards a cleaner, greener energy future, I am not convinced that the earmarking of extant funds is the right, or appropriate, way to do so.
I told the President what I think about the importance of meaningful energy policies here, and you can too!