Trust in the federal government is low for many reasons: Incompetence, allegations of insider trading, destruction of scarce capital, and blatant overpromising and underdelivering all help to explain why voters are disillusioned.
Still, the big promises of the Inflation Reduction Act are just one more example of the Democratic Party’s mendacity. The act will not reduce inflation, and the green energy subsidies will not make a material dent in U.S. carbon emissions or in trends toward global warming. Researchers at Princeton University’s Zero Lab are becoming more transparent about how difficult it will be for the U.S. to reduce greenhouse gas emissions. In a recent report, the researchers explain that electricity transmission is just one of the keystones for unlocking the benefits of the green energy subsidies in the act.
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When the act became law, the Repeat Project estimated that the legislation could, by 2030, reduce greenhouse gas emissions to 42% below 2005 levels.
However, that outcome depends on more than doubling the historical growth rate of electricity transmission in the U.S. Currently, electricity capacity grows at just over 1% per year. Even doubling the growth rate will not be adequate, according to the researchers at Project Repeat.
The $379 billion of green energy subsidies of the Inflation Reduction Act will increase demand for the consumption of electric-powered vehicles, heat pumps, and other electrified goods. Electricity demand will increase. The supply of electricity must grow to meet demand. Democrats routinely enact policies to increase demand, but they ignore supply. Inflation and shortages follow. See, for example, the Affordable Care Act health reform law.
Increasing the growth rate of electricity transmission will not happen without comprehensive legislation on permitting reform. Moreover, the magnitude of the task to transform the U.S. economy can only be fully understood in the context of the land required for green energy projects. Consider that researchers say wind and solar expansion would require up to 590,000 square kilometers of land. That amount of land is larger than New England plus Illinois, Indiana, and Ohio. That is big. It will not happen.
Geography is only one mountain to climb. The other ascent involves the complexity of permitting reform. Currently, authority for transmission systems involves not only state and federal government but also local government. Because transmission expansion is so difficult, it is routine for projects to meet considerable delays. Projects are typically delayed for five to 10 years. In fact, some projects are delayed for decades.
2030 is only seven years away.
Comprehensive permitting reform legislation will be difficult to pass. Representatives from blue states will balk at efforts to fast-track fossil fuel projects. Republicans will reciprocate with hostility toward green energy delusions. The transition to a green economy will not happen for decades. American consumers will balk at too-high green energy prices. The public will prefer the status quo, a measured rollout of green energy while fossil fuel power remains the backbone of the economy.
Democrats will have to wake up and realize that without major permitting reform, their dream of a green economy is just another fiasco.
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James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes a daily note on finance and the economy, politics, sociology, and criminal justice.
