According to The Los Angeles Times, major technological breakthroughs are going to be necessary to make alternative energy solutions price competitive with coal, oil, natural gas, and nuclear. Without those breakthroughs, achieving large reductions in carbon dioxide emissions will come only at very high cost, forcing major reductions in standard of living.
U.S. Energy Secretary Steven Chu, a physicist, calls for major government investment in research and development in pursuit of such technological breakthroughs. There is some small comfort in this, since by comparison with other policies to fight global warming, the Copenhagen Consensus ranks R&D best. But put the emphasis on small: It ranks 14th in cost effectiveness on a list of 20 policies to improve human well being, far behind things like #1 micronutrient supplements for children, #2 achievement of the Doha development agenda, and #3 micronutrient fortification of foods generally in the developing world.
But there’s another weakness in Chu’s push for more government-funded R&D on energy technology:Government has a terrible track record for picking promising investments. R&D investment is better guided by the private sector, where people risk their own money, and hope for their own fortunes, when they invest.
Every dollar the government spends on R&D is a dollar private investors can’t direct instead–and therefore a dollar likely to be less effectively spent.
