Breaking America’s Oil Dependence: Eighth Time’s the Charm?

One part of the State of the Union address I particularly enjoyed: 
“We need to get behind [clean energy] innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”
The idea of a green revolution is particularly exciting. Though economists found it difficult to predict economy-wide remodelings in the past (from the industrial revolution to the internet revolution), they’re quite certain that the green revolution is next—environmental sustainability isn’t just for granola-eating hippies anymore, it’s for the businessmen, the scientists, the everyday breadwinners. It’s great to conserve our planet’s resources and all, but let’s also consider the economic angle: higher income and more jobs. Innovation leads to productivity growth and the blossoming of new industries. Productivity growth leads to a better standard of living, and shiny new industries hire up the languishing laborers of dinosaur industries on their way to creative destruction.
When I conferred with my colleagues, however, they pointed out that I was being naïve:
Big oil lobbyists will surely make aggressive, and very likely successful, moves to block substantial clean energy legislation. Too often sketchy politicking bulldozes over sound economics. How can we help Obama fulfill the broken promises of the past half century?
Campaign finance reform and tighter restrictions on lobbying may seem like good solutions, but they would take too long to take effect. Change in US climate policy is urgent, and while there is no doubt our government would be more effective if politicians spent less time worrying about their campaign war chests and more time governing, these are no small political battles.
Policymakers must be pressured to make clean energy profitable for oil companies. We can’t just say Big Oil is evil and call it a day. If your salary depended on Exxon’s survival, wouldn’t you fight to keep it afloat too? In order to make progress on sustainable energy, sustainable energy has to be made profitable to oil companies.  Instead of having entirely new corporations replace oil companies, we should further explore the possibility of encouraging them to shift to renewable energy sources. Economists should tweak the incentive structure so that oil companies will actually want to invest in clean energy innovation.
Eight presidents have fought a losing battle against America’s oil dependance. It’s time to change tactics.
photo credit: http://c1.redgreenandblue.org/files/2008/03/wind-turbine-flag.jpg