This past Wednesday, Michael Boskin, Stanford economist and chair of the Council of Economic Adivisors under Bush 41 had an op-ed on green jobs and industrial policy in the WSJ. He said a bunch of things that nearly all economists would agree with: government should fund basic R&D — which the market will not adequately support on its own — but should generally stay out of downstream markets. And government shouldn’t pick specific technologies or firms as winners in market competition. So far, sounds great.
But it’s what Mr. Boskin doesn’t say that tips his hand as a partisan political advocate. He doesn’t mention that nearly all scientists believe that carbon dioxide is a major cause of climate change, or that nearly all economists agree that the best way to deal with the threat is to put a price on greenhouse gas emissions, through a tax or cap-and-trade program. He also doesn’t mention that the Republicans have blocked those most-efficient responses to the environmental threats, so the Democrats are responding by ramping up much-less-efficient alternatives, as I pointed out in a Bloomberg Business Class op-ed earlier this week.
I know that economists close to candidates in both parties pull their punches on their own side’s inconsistencies, but it really does make it difficult to have a reasoned debate when the presentations from experts get so one-sided. If you aren’t annoying politicians on both ends of the spectrum, you probably aren’t telling the whole story.
Severin Borenstein is E.T. Grether Professor of Business Administration and Public Policy at the Haas School of Business. He has published extensively on the oil and gasoline industries, electricity markets and pricing greenhouse gases. His current research projects include the economics of renewable energy, economic policies for reducing greenhouse gases, and alternative models of retail electricity pricing. In 2012-13, he served on the Emissions Market Assessment Committee that advised the California Air Resources Board on the operation of California’s Cap and Trade market for greenhouse gases. Currently, he chairs the California Energy Commission's Petroleum Market Advisory Committee and is a member of the Bay Area Air Quality Management District's Advisory Council.