If The Market Won't Push For Clean Energy, Government Must

Yesterday's Washington Post headline posed the question, "As Fuel Prices Fall, Will Push For Alternatives Lose Steam?" [1] The weakening "push" referred not to public policies but to market forces, as clean energy entrepreneurs lamented the increased difficultly with financing as oil prices have dropped sharply in the wake of the global financial crisis.

(Now gas is only double what it was when Bush became president! Woo-hoo!)

Of course, this is exactly why public policies are needed to build a clean energy economy. Without government, there is no sustained push. Only erratic markets.

Market forces, particularly when it comes to oil, are volatile. People may get that over time gas will continue to get more expensive as energy demand rises and supply dwindles. but no one knows exactly what the price will be month-to-month and year-to-year. Many consumers and businesses do not have the means, especially in recession, to make up-front investments into clean energy and energy-efficiency that would protect them from the wild unexpected swings of the oil market.

But our government can make those investments, make that push, stimulate the economy and stabilize the energy market over the long-term. The value of clean energy investment does not change even if the daily price of oil does.

The looming recession simply offers another reason for public investment: more jobs.

Just yesterday a new study found California's energy-efficiency policies created 1.5 million jobs since 1977 [2]. As the New York Times reported:

"Consumers were able to reduce energy spending," the study said, adding that "these savings were diverted to other demand."

“When consumers shift one dollar of demand from electricity to groceries,” the report said, they create jobs among retailers, wholesalers, food processors and other businesses.

One positive development in the presidential campaign is both major candidates embraced the logic that promoting clean energy and energy-efficiency creates jobs and grows the economy. The false choice between energy and the environment is losing oxygen.

But the ups and downs of the volatile oil markets are a reminder about the importance of our government to invest our resources and set rules that allow us to achieve long-term goals that are critical to the common good.

Because if markets on their own could solve our energy problems, they would have done so by now.