If elected US president, Republican candidate Mitt Romney would end federal government support for the solar and wind industries, and curtail the Environmental Protection Agency’s (EPA's) “reckless regulatory behaviour” and “war on carbon.”
Polls show Romney, 64, running a strong second to Texas Governor Rick Perry among eight declared candidates vying for the opportunity to face President Barack Obama in the November 2012 election.
Romney, a former governor of Massachusetts, is touting his 35 years in the public and private sectors as giving him the right background to turn around the country’s stagnant economy and cut its dependence on foreign oil.
In “Believe in America,” his 88-page plan for economic growth and jobs, Romney is critical of Obama’s policies that promote renewable energy and green jobs, claiming they are distorting the free market.
“We should not be in the business of steering investment toward particular politically favoured approaches,” he says in the plan. “That is a recipe for both time and money wasted on projects that do not bring us dividends. The failure of windmills and solar plants to become economically viable or make a significant contribution to our energy supply is a prime example.”
Romney calls solar and wind two of the most “ballyhooed” forms of alternative fuel, saying they remain sharply uncompetitive on their own with conventional resources such as oil and gas in most applications. “Indeed, at current prices, these technologies make little sense for the consuming public but great sense only for the companies reaping profits from taxpayer subsidies,” he claims.
According to Romney, there is a place for government investment to promote innovation in the energy industry when time horizons are too long, risks too high and rewards too uncertain to attract private capital.
“However, much of our existing energy research and development budget has been devoted to loan guarantees, cash grants and tax incentives for projects that might have gone forward anyway, “ he contends, adding as president he will redirect clean energy spending towards basic research.
He argues that government research dollars should be used to develop new energy technologies and on initial demonstration projects that establish the feasibility of discoveries. “This approach offers the best opportunity to promote innovation without distorting the market,” he says.
Romney favors doing this through the Advanced Research Projects Agency – Energy, or ARPA-E, the US Energy Department arm that began operation in February 2009, which he says will ensure long-term, non-political sources of funding for a wide variety of competing, early-stage technologies.
Ironically, the initial $400m in funding for ARPA-E came from the $775bn American Recovery and Reinvestment Act, better known as the economic stimulus bill, drawn up by Obama and his White House advisers. Romney says the record fiscal stimulus programme failed to resuscitate the economy or create the millions of jobs promised by Obama.
“President Obama made much of his commitment to green jobs, and his stimulus legislation was rife with provisions subsidising initiatives in these areas,” Romney says, referring to the $60bn targeted for clean energy initiatives.
He argues that funneling money in that direction was an inefficient instrument for job creation as alternative and renewable energy is capital- not labor-intensive. Federal spending could also have a marginal impact on employment as the baseline of activity in the green jobs sector is relatively low, adds Romney.
Even as Romney is urging more support for ARPA-E, his fellow Republicans in Congress want to cut its funding by half in the 2012-13 (October-September) fiscal year saying that the money could be better spent elsewhere.
Turning to the EPA, Romney accused the Obama administration of using the agency to impose a “costly and ineffective anti-carbon agenda” that failed to win support in Congress in 2009-10.
He vows to eliminate regulations put in place to curb CO2 emissions and slow refinement of technologies that burn coal cleanly, although he does not name them. Romney claims that had Congress passed Obama’s carbon cap-and-trade proposal, it would have been a crippling blow for the US economy.
Romney says that he will make every effort to safeguard the environment, “but he will be mindful at every step of also protecting the jobs of American workers.” He complains that the White House is using the EPA to blanket the US economy with regulations without allowing a proper assessment of their costs.
If there are compelling human health reasons to restrict industrial emissions, regulatory bodies must issue standards that can be achieved over a reasonable period of time, he argues.
This would afford industries fair notice and a significant window in which to invest in the development and installation of new technology that would bring their facilities into compliance.
Romney also pledges to amend the 1970 Clean Air Act to remove carbon dioxide from its purview, even though the law’s wording does not include the heat-trapping greenhouse gas that most scientists say contributes to global warming.
The US Supreme Court ruled in 2007 that EPA must regulate CO2 and other greenhouse gases under the Clean Air Act if it determined that they endanger human health and welfare. EPA made its “endangerment finding” in December 2009.