Tuesday, December 29, 2009

Compulsory green energy purchases - a discussion I joined on LinkedIn

The following discussion was started in the Renewable Energy Business Network/Clean Economy Network on LinkedIn:

"What is your opinion regarding compulsory green energy purchases?
China's top legislature Tuesday discussed a legal amendment to require
electricity grid companies to buy all the power produced by renewable energy
generators. "

One of the participants posted the following comment:

"I believe in democracy and capitalism. I do not want more government and more
mandates for anyone! In my opinion, compulsory green energy purchases is a bad
idea. Instead of mandates, green energy must stand on its own because of the
value it brings to the individual, the business and the world."

This is my answer: democracy and capitalism are great. However, equal opportunity and a level playing field is just as important and the field has not been levelled for years. When businesses make millions of dollars in profit while dumping their solid, liquid and gaseous waste without accounting for it into landfills, rivers and the air, that is not capitalism. It is abuse of opportunity. It is wrong. It is injustice. This took place and in many cases is still taking place in the US and in many other places. Energy companies, large industry, utilities, are polluting, and transferring negative external costs to you and all of us. Their pollution costs money, it is a heavy burden on the health system that is financed not by the polluter but by the public. These costs have NEVER been calculated into any tax as far as I know.

We must change this and yes, compulsory purchasing of clean energy, incentives for clean energy, carbon taxes, cap and trade, polluter pays taxes and any other tool will do just this. It will force industry that uses a lot of energy or produces a lot of waste, to invest in industry that has a positive impact on the environment, i.e. renewable energy, and it will make doing business that is bad for the environment much more expensive, as it should be.

Capitalism does have room in this environment, it just needs some guidance, governmental and, more importantly, public demand from government do implement this guidance.


  1. I totally agree with all you wrote. I wanted to elaborate on the even playing field: Capitalism's logic that the market will regulate itself is based on the principles many small buyers and many small sellers and complete information to all players. The energy markets many small buyers but only a handful of big seller and absolutely incomplete information, rendering the work of the "invisible hand" impossible, and that is exactly where regulation and government should step in. They do not interfere with capitalism, they only make it stronger in places and markets where historical evolution caused it to evolve in a way that does not allow for efficient self regulation.

    -- Gilad Hellerman

  2. Gilad,

    First, many thanks for your comment. It is a first and I hope that many will follow.

    Second, yes, the theory of Capitalism is well known. The big problem is that Adams' theory seems a bit detached to today's M&A culture of mega-corporations with more money (and power) greater than small and medium countries with far reaching implications on economies and great force over governments. Corporations hold a great power over us. I do believe that the balance is shifting, at least a bit, due to networking capabilities that we humans have today and which we must nurture, use, encourage, enlarge and develop, which we never before possessed. Today, in the field of energy but also in many other fields we must have not a large government but most definately a strong, involved and directing one.