Governments can't require the replacement of cheap energy by expensive energy without increasing the cost of energy. But they can waste a lot of money pretending otherwise.
An analyst at the Manhattan Institute, a free-market think tank, confirms what should be obvious in a new study of energy manipulation in Europe.
Since 2005, points out Senior Fellow and author Robert Bryce, members of the European Union have adopted aggressive energy policies addressing climate change.
By comparison, the US has barely begun the effort. But California and New York have set goals for renewable energy and greenhouse-gas emissions following the European model.
Those efforts, Bryce warns, "are likely to further increase those states' already-high energy costs."
Bryce's study finds that:
• Between 2005, when the European Union adopted its emissions trading scheme, and 2014, residential electricity rates in member countries increased by an average 63%. Increases were greater in the three countries that intervened most in energy markets-Germany, 78%; Spain, 111%; and the UK, 133%. Average US residential rates increased by 32% over the same period.
• In Germany, which most aggressively supports renewable energy, residential electricity rates increased by 13¢/kw-hr during 2005-14, to 40¢/kw-hr. That increase exceeds the average residential cost in the US, 12.5¢/kw-hr.
• The fastest-rising energy costs were in the three most interventionist countries. During 2008-12, Germany, Spain, and the UK spent about $52 billion on energy subsidies.
• While carbon dioxide emissions fell by 600 million tonnes/year in EU countries during 2005-14, they increased by 4.7 billion tonnes/year in just four developing countries-China, India, Indonesia, and Brazil.
• Restriction by European countries of hydraulic fracturing has limited production of natural gas, increased dependency on imported energy, and contributed to electricity-rate increases.
US policymakers advocating renewable-energy mandates, Bryce says, should have to estimate the long-term costs on consumers and industries, the resulting cuts in CO2 emissions, and the effect of those cuts on global temperature.
Americans have much to learn from Europe's energy experience, which oddly seldom makes the news.
