Thursday, October 22, 2009

Stimulating Renewable Energy

Jonathan Adler has a post up on this New York Times story on the differing approaches to renewable energy by Texas and California.

the oil-and-gas state has nonetheless emerged as the nation’s top producer of a commodity prized by environmentalists: wind power. Eager developers are covering its desolate western mesas with giant turbines. The world’s largest wind farm began operations in Texas this month, and the state now has close to three times as much wind capacity as Iowa, the second-ranked state.

This achievement puts Mr. Perry’s state in odd company. The race for clean-energy leadership is on — and big red Texas is going head-to-head with the gung-ho greens of California. That state has thrown itself into solar power and now leads the nation by a huge margin; it has also aggressively pursued energy efficiency...

Texas’s secret, besides strong winds and lots of land, is its lack of regulation. Wind developers rave about the fact that, in essence, they need few state permits to build a turbine farm. They deal mainly with local officials, who are generally permissive (energy, after all, is a well-loved commodity in Texas).

From Adler:
The comparison illustrates how regulatory policy can have a large effect renewable energy development. Mandates can certainly force investment into renewable energy sources, but regulations can also stifle otherwise productive investments as well. Indeed, as I’ve discussed before, some companies seeking to advance renewable energy sources have found environmental regulations to be among their greatest obstacles.