The Choice

The debate over renewable energy giveaways in North Carolina really boils down to a choice. Do legislators serve the interests of citizens of North Carolina, or do they serve the interests of a powerful industry group?

In my phrasing, it’s not much of a choice. I see it as a moral imperative.

For those legislators with a different perspective, it can be a difficult choice. It is the dilemma described by public-choice economics.

What do policymakers choose when they can bestow concentrated big benefits on a single “winner” industry while dispersing the costs across the many? They tend to hear nearly exclusively from the winner industry; why?

  • How does the big-winner industry react? They pour money and effort into lobbying; the potential payoff is worth it.
  • What about private individuals facing real — but smaller, spread out among so many — costs? The time and effort to fight on their behalf is usually too expensive.

I discussed this imbalance on pages 6–7 of my report on Carolina Cronyism. It takes principled leaders to resist public-choice cronyism.

Shorn of principle, the choice expands in a leader’s mind: People in this state may not have any choice over who sells them electricity, but we’re not charging them much to cover the renewable energy costs. And that mandate isn’t expanding by much, not at first. But it goes to support jobs in the industry. Jobs are good, right? You know that industry is right there in my district. Yes, everyone in my district is an electricity consumer, but that’s not what I’m talking about. These industry reps love me and support me. I can’t turn my back on them now.

A dozen moral compromises later, and the imperative seems to be supporting the industry that — despite years of promises to the contrary — still admittedly cannot stand on its own without loads of forced public support.

Yesterday, for example, The News & Observer wrote about a report of the “many factors [that] contribute to NC’s solar renaissance.”

It would surprise no one here familiar with solar’s business model built on public subsidies that the report’s top three factors (out of five) are government giveaways.

  • No. 1: The renewable energy portfolio standards mandate
  • No. 2: State and federal tax credits
  • No. 3: Federal regulatory favoritism

It even starts by citing that Pew Study which is a document of their dependence on government, with every page containing at least one government prop to the industry.

The choice remains

The choice is still, however, between choosing to serve the interests of citizens of North Carolina, or to serve the interests of a powerful industry group. What will our policymakers choose?

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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