Markets vs. Mandates: Session 5: Adding Economics to Energy Engineering | Hoover Institution

Presenters: Mark P. Mills, senior fellow, Manhattan Institute; and David Victor, professor of innovation and public policy, University of California–San Diego.

Chair: Neil Chatterjee, senior advisor, Hogan Lovells, and former commissioner and chairman of the Federal Energy Regulatory Commission.

Mark Mills argued that ambitious goals to achieve zero carbon emissions in the coming decades are delusional. He said that over the past 20 years, after $5 trillion spent worldwide, there hasn’t been any significant movement toward transitions to renewables. Today, global energy derived from wood exceeds that of solar and wind power combined (which make up just 3 percent of all fuels).  Moreover, a rapid transition to these other renewable sources, including batteries, would require a level of mineral extraction never seen in history.

In his first of four points, David Victor described the fragmented policy action in countering various pollutants. In replacing carbon, some alternative energies are farther along than others. Meanwhile, some industries face bigger challenges from other pollutants, such as aviation through the emission of contrail clouds from jet engines. These and other segments of the economy have different features that will determine if a market-driven or a mandate-based approach is more effective at mitigating environmental damage.

Niall Ferguson examined the rhetoric of proponents of drastic action against climate change, many of whom believe that if the policies they favor aren’t adopted, the world will experience a catastrophe involving extraordinarily high temperatures, precipitation, and sea levels.

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