It seems a very long time since Joe Biden was president and the US government was throwing bazillions of dollars at the climate crisis in expensively ineffective ways via the “Inflation Reduction Act”. But according to an item in Heatmap, those were the days. See, “three former Biden administration staffers shared exclusively with Heatmap” an inside perspective, to celebrate how they did it and “to create a blueprint that a future administration could use to build back capacity and implement similarly ambitious policy.” Not that it worked or anything. But here are the key lessons, as they see it, and we think #3 is especially important. “1. The tax credit rollout happened at an unprecedented pace …” So yes, governments can fling money out windows in staggering quantities. Great. Who knew? “2. … but it was also held back by capacity issues.” So yes, governments are incompetent. Who knew? And then (drum roll please) “3. Clear policy goals are key.” So all the money in the world won’t help if you don’t know what you’re trying to accomplish. Though arguably if you weren’t already aware of that issue you should not have been trusted with public money. Heatmap adds “Part of what made the IRA so ambitious is also what made it incredibly complicated to implement.” Actually, throwing money out the window is not complicated. But the physics and the economics of energy are, and if they didn’t realize it at the time we doubt they will next time either.
Heatmap misses this central issue with something approaching artistry:
“The tax credits were not just designed to incentivize clean energy deployment. Several were written with the explicit requirement of reducing greenhouse gas emissions, requiring complex lifecycle emissions calculations. Others were engineered to spur domestic manufacturing, bring economic development to low-income communities, and create good-paying jobs. The statute was not always clear about how implementers should prioritize these different goals, which sometimes conflicted with one another.”
A critical premise of the IRA was the usual leftwing “omnicause” belief that all good things, from reducing emissions to spurring domestic manufacturing, come in one organic package. Indeed, to put a giant heap of climate subsidies into the “Inflation Reduction Act” certainly embodies the assumption that reducing CO2 emissions will make the economy work more efficiently and get rid of gunk like inflation as well as “carbon pollution” and injustice.
Also, what’s with “complex lifecycle emissions calculations”? Not that we don’t believe in them. But the science and the economics and the politics were all meant to be simple. Thus it’s odd to read that the hydrogen tax credit:
“was designed to reward producers on a sliding scale depending on how clean their hydrogen was, but the science behind making that kind of calculation was new and rapidly evolving.”
Yet again central planners are surprised at their failure to be able to calculate the intricate details of the economic systems they presume to command and control. The lesson, surely, is that thinking you can fix everything from the weather to unemployment with one giant spasmodic spending program is arrogant as well as simplistic. Or not, because the article winds up:
“That being said, the authors don’t want policymakers to think they’re arguing for reduced ambition.”
No indeed. They just want all the complexities they encountered last time not to be there again. One of the authors, Dorothy Lutz, told Heatmap:
“The federal government can and should do highly ambitious policy, and I hope that our report can be used by folks to take the next steps to do so. What we are trying to articulate is making sure that for each specific tool, you understand what the intended policy goal is, and then you design it to directly influence that behavior as sharply as possible.”
Oh. Just that. Design it properly. Are you seriously saying the Biden Administration was full of people who hadn’t even got that far in their understanding of how government works, or doesn’t? If so, maybe the right advice is to read a few books on political economy, and a few memoirs of people who rushed into government full of naïve ambition and came out older and wiser.
This report apparently wouldn’t qualify.
