It’s a virtual belief from mainstream environmental groups to green VCs in Silicon Valley that the price of carbon must rise to change business and consumer behavior.
Alternatives will only become competitive if carbon emissions are taxed or limited through a cap-and-trade system, the argument goes. By doing so, the cost of carbon will rise and companies/consumers will explore alternatives.
Well, not all greens are buying it. , writing on Yale Environment 360, argue that any attempts to limit carbon emissions are doomed to fail.
Why? Because the political forces aligned against meaningful carbon caps — or a high-enough carbon price — are simply too strong.
…price carbon too high and provoke political backlash that results in the evisceration of emissions caps and other policies to reduce emissions; price it too low, and you don’t have a sufficiently high price to drive the innovation and technology investment necessary to make the transition to clean energy alternatives.
For this reason, we argue that environmentalists must shift from looking to high carbon prices to drive private sector energy innovation to using low carbon prices to fund public sector research, development, and deployment of clean energy technologies.
In short, government will be incapable of mandating the kind of carbon price necessary to fuel innovation in the private sector, so Washington should go it alone and fund initiatives itself.
I see one major hole in this argument. If the political forces aligned against carbon caps and a meaningful carbon price are strong enough to eviscerate it politically, why would a publicly-funded alternative energy initiative fare any better? The same lawmakers presumably beholden to the same interests would have to sign on to either approach. If big coal or oil opposes a high carbon price would they be any more willing to support tax dollars to build an alternative energy industry meant to supplant them?
Either way it’s a political battle.
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