Decoupled Profits & Criminalized Consumption

If that isn’t a recipe for economic and political catastrophe, I don’t know what is. But in the name of fighting climate change, these twin concepts inform radical new government policies being increasingly enacted that will dramatically transform our energy economy, how we use all other natural resources, and by extension, our entire economy.

“Decoupling” profits from production defers investment in new sources of energy, it destroys the incentive to earn a profit in a free market, and it channels innovation into narrow, government annoited channels. ”Decoupling” will always harm the consumer. But despite these fatal flaws, it is taking hold as policy. For example, if you produce electricity in California, the LESS energy you deliver, the MORE you make. In California’s legislature and in the U.S. Congress, “decoupling” is being considered for electricity and water. Make no mistake about this, to decouple productivity delivered from revenue collected is a completely different, new, and potentially devastating form of government takings. It inordinately empowers and merges with the government huge sectors of the economy and removes from their mission the necessity to pay their way, to operate efficiently. With most significant previous “takings,” the operator still retained these crucial incentives.

At the same time as our major resource purveyors now propose to “decouple” the value they create from the value they collect, we also are increasingly embracing a new conventional wisdom, if not passing laws, based on the new principle that consuming large amounts of resources is a crime. This emphasis is reflected already in punitive pricing for energy and water consumption over mandated tiers, a practice, similar to cell phone overage charges, where the 10x higher price on the increment amounts to rationing. But criminalizing consumption, as a principle informing public policy, is broader than simply engaging in punitive pricing and can be quite subtle.

With “smart grid” metering, for example, consumers will be expected to either pay punitive rates or accept a utility rationing regime that will include detailed settings regulating maximum allowable volumes of usage, as well as maximum and minumum settings for heat and cold, as well as micro-managed rates of flow per appliance, with the time and volume of usage monitored and recorded – and priced accordingly - at the utility for every appliance in the home. This reality is already well within our technological capability, and in-process legislation will increase utility efforts, including higher government authorized “decoupled” rates, to fund its implementation. In new and retrofit construction, installing IP addressible appliances will become the mandated norm, and if you’re just trying to replace one appliance, forget about that government rebate if the device doesn’t include chips and telemetry.

Fareed Zakaria, a writer who, hopefully, is not consumed more by his ambition than by his obvious powers of observation and keen insight, was refreshingly accurate in June 2009, when, in a Newsweek Essay entitled “The Sky is Not Falling,” reminded us of some reassuring fundamentals. He noted signs the global economic system is proving resilient, and he noted that global conflict, while troubling and tragic, is not spiraling out of control. What Zakaria ignored, for whatever reason, was the third leg on that stool of global stability – the climate is not spinning out of control, nor is it likely to anytime soon.

Climate change is something that should be prepared for. The mistake is to assume there is some dangerous climate trend we must fight to reverse. What we must fight, and where our climate priorities should return, is better adapting and preparing for cataclysmic natural phenomenon – build a sea wall, replant coastal mangrove forests, desalinate sea water, develop aquifers, build and upgrade aqueducts, maybe even build a few green dams or flood basins.

Being ready for existing severe climate events should be the priority - hurricanes, tornadoes, cyclones, tidal waves, floods, and the like – but preparation for these extreme weather events requires an infrastructure investment that environmentalists decry, since it requires massive land, energy and other resource development. According to environmentalists, apparently, the preferred policy to prepare for normal extreme weather is to shut down the economy and hope for benign climate events because we marginally lowered global CO2 emissions. This is pure nonsense, and the fact this is not being seen as pure nonsense should terrify anyone concerned about our future. And not only does environmentalist legislation and litigation stifle conventional energy development, but alternative energy developments via wind, solar, geothermal, biofuel, nuclear – anything deemed “carbon-free” - are also stalled and made prohibitively expensive by environmental activism.

As Steve Milloy points out in his recent book “Green Hell, How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them,” this seeming contradiction is explained as follows, “Greens don’t really want to increase our energy supply – whether with fossil fuels or renewable energy – because that would undermine virtually all of the green’s ultimate goals: zero population growth, limiting the development of physical infrastructure, impeding economic growth, and redistributing wealth.”

The problem with criminalizing consumption is if you take this so called moral value to its extreme iteration, we would all be prisoners – our walking, our travel, our space allotment, our usage of resources – would all be strictly monitored and micro-managed to minimize consumption. Hence we would live behind “urban service boundaries” and we would occupy “cluster homes” and we would aspire to ”pedestrian friendly” lifestyles. If we wanted to have more than a few potted plants, we would have to join a government or nonprofit “community garden.” Private gardens and play yards are unsustainable. Cars are unsustainable. Roads are unsustainable. Energy and water use is toxic to our planet. Hence to consume is to commit a crime, but this ignores human aspirations and inventiveness and is tragically short-sighted.

The problem with decoupling profits from productivity and criminalizing consumption is that it necessarily increases government control, in collusion with powerful special interests in business, labor and finance, over private property ownership and entrepreneurial license. In its extreme iteration this leads to tyranny, and in all its forms, mild or severe, it is regressive and hurts the emerging, the upwardly mobile; it denies the inevitable and freedom-loving, evolutionary forward progress of civilization.

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