Individual vs. national sacrifice

A few quotes from a CNN article demonstrate the failures of logic that result in bad policy.  The first, from the writer, Steve Hargreaves:

Anecdotal evidence from one utility says some Americans, about 20 percent, are willing to pay about 8 percent more for this power. Yet when given the option, only about 5 percent of people actually sign up.

It's subtle, but clear example of not understanding the argument of Me vs. Us.  If you asked me, I'm willing to pay more than 100% more for clean electricity, if I get the full benefit.  But if you offer me clean power for 50% more I'll turn it down.  Why?  Simple, I receive between 1/6,500,000,000th (my portion of the world population) and 1/600,000,000th (my portion of the world GDP) of the benefit.

If, however, the question is a national U.S. policy, I receive 20% of my contribution's value, since the United States spends 1 of every 5 energy dollars spent worldwide.  Additionally, since my electric use is half or less the U.S average, my ratio is over 40%.

The fact the difference is only 3% demonstrates an astounding degree of selflessness.  Even if you banked on the 5% who actually did sign up, the ratio of willingness should have been 50 to 1, or 0.16% for the initial 8%.

Local vs. national

Next is the argument of the president of a natural gas based energy company, Michael Allman:

Allman's argument implies that if natural gas prices really did spike, people would build more renewable capacity without a mandate from the federal government.

"When you constrain something, it has never been good," he said.

Here, the mistake is similar (though possibly intentional).  Without a national bill, building renewable capacity is a localized concern, whereas natural gas shortages are national (not global since natural gas is rarely imported/exported).  The overall ratio ranges from 1 to 100 in sparsely populated areas like Alaska, and as high as 1 to 20 in an area like California.

There is also a second mistake.  The assumption that the reaction to a spike will be timely and commensurate.  I'm sure a spike would have an effect, but since clean power is a 20 year investment, and localities may assume a spike is temporary, the reaction won't be as large as warranted.  It also takes time to build clean power.  There is no clean power switch waiting to be flipped on.

Individual Encouragement

If you want individuals to invest in clean power individually, you need to give them benefits.  The best system I've seen yet is pricing lock-in.  One day in a not too distant future, for many areas, clean power will be more economical than natural gas.  When this happens, it's only fair that those who believed in clean power reap the benefits.  All individually elective clean power programs should offer this benefit.  Anything else is not only missing a major opportunity, but also lacking in fairness.