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When Two Worlds Collide

Energy guru Joseph A. Stanislaw explains how the battle between government and the marketplace is changing.

Fortnightly Magazine - August 2007

goal should be to transform today’s energy policy into a sustainable technology policy. How do we know we are not betting on the wrong technology, or that the government has the stomach to subsidize these technologies ad infinitum?

Stanislaw: We’re not going to pick technologies. We’re going to create a market where all of the costs are recognized. The extreme would be no subsidies for anyone. Create a market with the real cost to the commons, and let technology entrepreneurs compete on this newly defined competitive playing field. Ethanol, corn-based or second-generation biomass, or coal plants with sequestration, nuclear, solar and wind, but with all the costs that they are facing. And it’s clear what the costs are. Let them all compete.

Fortnightly: How and when should the subsidies that exist for oil, nuclear and wind, and other fuels be phased out?

Stanislaw: Maybe the best way is to just remove the subsidies for everybody and let the new market structure work. There is no one technology that is going to be the silver bullet. The demand for energy is so large that every economically viable technology will find its own niche markets. So, we have to think in terms of different markets and let the market players go for the markets where the technology actually works—practically and competitively.

I realize that this is an idealized world. It will take time for us to get there. But now is the time to start.

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