The most recent version of the Austrian Economics Monthly focuses on the policies and tools of renewable energy. Started by Pietro Paganini, this episode acknowledges that Europe has been struggling more so than the United States in producing traditional energy. The discovery and need for producing new and clean energy are ever more prevalent with both the energy crisis, environmental concerns, and issues with producing traditional energy. Pietro provides specific examples of issues such as all-time availability for clean energy, storage in vessels such as batteries, leftover trash from energy sources, and finding suppliers.
When asked if government tools geared toward the environment are effective, Richard Bonugli states that there are principles that embody classical liberalism for an environmental approach, and they are: market economy, private property rights, decentralization, optimism, and innovation. A market economy is about allowing the free-market approach where consumers are allowed to choose their energy options. “It is not forced upon them by the government.” Private property rights are important because it allows people to become stewards of the environment.
“Decentralization makes sense because those who are closest to the problem often have a better sense of what is needed versus a central body”.
Finally, optimism and innovation look at technological solutions rather than policy or forced authoritarian solutions. It lets us see how tech can provide economic solutions. Bonugli believes that these principles of market environmentalism would be best suited as tools for development. These tools follow the beliefs and teaching of the Austrian School of Economics. Next Paganini introduces two issues. The first is the speed of climate change which has rapidly increased over the last decade. The second which relates to climate change is the sources of energy. Paganini acknowledges that for both clean and traditional energy, the supplier caused a problem. He mentions that a supplier could be a dictator or an oppressive nation. Because of these issues, there is a need to find a reliable source. Paganini suggests starting at home by producing energy domestically. He questions Bonugli on two things. First, “Is renewable energy able to be the main source of fuel?” and second, “If so, when is it possible?”
Bonugli thinks the timeframe is a big issue. He states there is a push for more environmentally friendly sources immediately. Due to this, there is no transition time being allocated. There is a big problem with relying on others for energy as seen in Europe. Germany, for example, relies on Russia for energy, yet with the sanctions, the prices for energy are inflated and the government is scrambling to find alternatives. A final major issue is the scalability of renewables such as water and wind. People expect that to be immediate, however, a transition period is necessary. Currently, we are incapable of an immediate transition. By allowing for a transition period, we are given time to prepare and improve current renewable energy methods. In order to produce vessels that promote clean energy, the process involved includes massive amounts of CO2 emissions. Because of this, we are not ready for an immediate change.
Matthew is a student at Wabash College in Crawfordsville Indiana, where he studies Classics and Rhetoric. He is an active member of Kappa Sigma Fraternity and enjoys traveling, playing volleyball, and writing. Matthew is the spring 2022 intern with the Austrian Economics Center.
The AEC’s fundamental goal is to promote a free, responsible and prosperous society. Through education and improving public understanding of key economic questions, the AEC promotes the idea of a free market economy and the ideal of a free society.