Continue reading »]]> By: Randy Lutz

Libertarians have long been known as the party of unwavering dedication to their principles, of “old school” values, and in many cases the party of logic. Rarely-if ever-has the party been referred to as the party that supports the environment. I would however (and am about to) make the case that not only is the Libertarian party not against the environment, as the common misconception has us placed, but the only real answer that looks out for the environment when it comes to political parties.

“Libertarians are often very hostile to environmental regulations.” or “Libertarians don’t embrace environmental issues because of their belief in free enterprise”. These are common misconceptions about Libertarians. I’ll clear up the two specifics before tackling the issue as a whole: 1) Libertarians are often very hostile towards ALL regulations. 2) Enterprise is not free if another enterprise is dumping waste onto their land. Neither are people.

In the words of Dr. Paul; “a true supporter of private property and personal responsibility cannot be indifferent to environmental damage, and should view it as a form of unjustified aggression that must be punished or enjoined, or dealt with in some other way that is mutually satisfactory to all parties. Private business should not have the right to socialize it’s costs by burdening other people with the by-products of it’s operations.”

In other words, Libertarians do in fact stand for the environment, we just believe in dealing with things in a different manner. But that is actually a slightly different topic. What I’d like to do today is go really deep into the issue of the environment, and talk about technological advances, and how current practices act in direct opposition to the interests of the environment, and how implementing Libertarian policies could change that.

You see the vast majority of laws these days seem to be made in order to almost subsidize people’s lack of ability to make a good decision. Some drug counselors would refer to this sort of behavior as “enabling”, others might refer to the laws made as a “crutch”. I’ll give you an example: taxes. Taxes are a method of redistributing wealth, often as the result of somebody being incapable of making a good financial decision themselves. How so? I’ll illustrate. People pay $200 a seat to go to a game, or a ticket to get in a concert. They then proceed to complain about how teachers, firefighters, and policemen don’t make enough money. They then expect the government to tax higher income people higher, to make up for their bad decision. You see they put those people in the higher income bracket.

If they actually cared about teachers’ salaries, or firefighters or policemen, they’d save that money spent on seats and tickets. They might hire a security force, or a tutor. Maybe send their kids to private schools. The prices for those tickets would drop drastically, player and entertainer salaries would drop drastically in kind. Fans of those things would likely get a higher quality product, as it’d be being done for the love of it, not the money. The problem that people see-teachers don’t make enough and athletes make astronomical amounts of money-would be solved. But instead we put a band-aid on the problem, give it a crutch, let you live through the current system. Instead of taking a hard stand and missing games for a few years in order to enjoy a lifetime of better costs and more deserving and dedicated athletes, the easy way out is taken through governmental policy.

This sort of pattern emerges with most laws. People say they want something done, they just don’t want to do it themselves. They shirk the responsibility off to someone else, who they will then fire (vote out) for making the tough decisions that they actually want made to begin with. It’s just a goofy pattern, and it’s time we put an end to it, put the responsibility back at the feet of the people. So how does this relate to the environment? I realize it seems I’ve gotten off track a bit, so let me tie it all together for you:

“Cost of service” regulations.

That’s it in a nutshell, allow me to expand.

“Renewable energy” is a hot topic of discussion lately. Whether it’s solar panels on your home, windmill farms in the middle of the sea, or electric cars, people are all about energy conservation…in theory. In reality, these things are having a very hard time selling. Every time I turn on the news I hear a report about the slumping sales of electric cars, or an argument about a new windmill farm that someone is fighting somewhere for some reason. As for solar panels, well I just couldn’t figure it out. Just last week I started asking myself (after noticing my neighbor’s solar panels-the only ones on my street) why every house in America didn’t have their own solar panel system and didn’t produce their own electricity. After some research I found my three word answer; simple payback time.

Simple payback time is the equation-well really it’s the answer-by which solar panel enthusiasts make their case. But it’s a hard case to make. Until recently the price for solar power in cents per kWh (Kilowatt hour) has actually exceeded the price of electricity provided by a utility (assuming you’re already tied into the grid), sometimes by many multiples, leaving the only real motivation behind buying a solar power system being the environmental concerns. This basically means that only those with extra cash lying around and a real concern for the environment were making a smart decision by purchasing solar power systems. In recent months and years prices are beginning to become comparable, but I ask you to think about this: why? Why have they taken so long to become comparable?

This is a simple answer, but it will confuse some; because we don’t live in a free market. Most people think we do, but simply put; when government regulations hold prices down (or artifically inflate them) they are not allowing the free market to work, and this is a case when disallowing the free market not only handicaps us as a people, but hurts our environment, and I’ll tell you how: simple payback time.

There we go again. Simple payback time. Like I said this is how solar panel enthusiasts and economists justify the cost of a solar power system, which can be quite pricey. What you do is basically take the cost of investment, and divide it by the savings generated annually (or monthly, or however you want the answer) and you’ll have the answer as to how long it will take to justify that expense. Now there are lots of tweaks and so forth that one can throw in revolving around valuation of money, etc but that’s the basic equation.

What many measure is price per watt, but to break it down even simpler, just take the price of the system, how much electricity you will use (and not pay the utility company for) annually, and then divide. The average American household uses 980 kWh per month. At 11.20 per kWh (the national average as of 2011), that’s 109.76 a month you won’t be paying. A little over 10 years to pay off purchase and installation ($11,500) of an average system given the current rate.

So that’s the equation. My apologies if we’ve taken a bit too long to get here, but it’s important that we understand the mechanics behind the equation, to understand what’s wrong. While most solar panel economists (I don’t know if that’s an official term, but I’m using it) try to justify the cost, or show you how it’s really overvalued and even though it costs that much you should count it as less, or whatever it is, I’ll be attacking the 11.2 cents. Because the 11.2 cents is where the begins.

You see in America we have these wonderful crutches for society that we like to call regulations. Energy is one of the places we love writing these regulations. You see they make us feel better about the waste we generate. You see because Americans use so much electricity, we regulate the prices, meaning utilities can only charge “cost of service” plus enough to get a “fair return on investment”. When prices don’t go up with inflation at the very least, that part of the equation is changed artificially. Basically, if the 11.2 cents were higher, the payback time would be lower, giving more financial motivation to the purchase of solar panel power systems.

While many complain about electricity costs in the US, they are much lower than most other parts of the world at 11.2 cents per kWh on average. To list a few countries you might have heard of with higher prices (with price per kWh in cents); the United Kingdom (21.99), Sweden (27.10), Italy (28.39), Australia (25), Brazil (34.18), and Denmark (40.38) among MANY others. In the states alone we’ve seen how deregulation results in higher prices as many states (CA, CT, DC, DE, IL, MA, MD, ME, MI, MO, NH, NJ, NY, and RI) have deregulated, resulting in higher prices. Those states have seen 3-4 cents per kWh more in charges than regulated states, representing a price increase of as much as 150% in many cases.

Overseas we see a much more drastic difference in pricing, as outlined above. In those places we also see a drastic increase in solar power sales, up 857% in Italy last year for example. These increases are despite governmental incentives remaining basically the same, and strictly in reaction to the rising cost of electricity from the utility companies, which is quickly going the way of the dinosaurs in Europe.

In America we let regulations strangle our economy in amazing ways, and even though they’re more well known for protecting the environment, when you look deeply into many you can see how they actually hurt it. If regulatory policies didn’t keep electric prices down so low, we’d be greater incentivized by the free market to purchase and use solar panels, utility companies would soon become extinct and you would see a trend of self-powered homes, or perhaps even community solar farms, something that would undoubtedly be much better for the planet, and transitively better for all of us in the long run, not to mention it would save you some cash. By getting out of our own way and letting freedom reign as our forefathers intended, we can ultimately protect both our wallets and our planet by voting Libertarian today. Stand with the Libertarian Party of Florida as we fight unnecessary, counterproductive and damaging regulatory practices.