Two new reports on Vermont’s Renewable Energy Standard, one by the Department of Public Service and Sustainable Energy Advantage and the other by an organization called Brattle, confirm what we’ve been pointing out for a long time – Vermont’s so called green energy mandates are all cost and no benefit for the Vermonters who get stuck paying the bills. And those costs are huge.
The DPS report focuses primarily on what the impact of the Renewable Energy Standard does to electric costs and ratepayers’ bills, and that will be the focus of this article. Brattle touches on this as well, but also delves into the overall economic impact of the policy, which I will save for another time. (Spoiler alert: it’s all bad.)
The most important aspect of these two analyses is that they put the lie to the advocates’ talking point that the benefits of decarbonizing our economy and electrifying everything utweigh the costs. Nope.
The “big benefits” claim is based on a fiction wrapped in a fib called the “Social Cost of Carbon.” The Social Cost of Carbon is a mostly made-up calculation that attempts to affix a price to the negative economic impacts of releasing a ton of carbon dioxide into the atmosphere by burning fossil fuels. It is highly subjective. Under the last three administrations, it has been officially pegged at $43 a ton (Obama) $3 to $5 a ton (Trump), and $51 a ton (Biden).
If you’re a fan of The Office, think of the Social Cost of Carbon as like Kevin’s magical accounting number, keleven, defined wonderfully by the Urban Dictionary as “a fictitious number used by an incompetent or corrupt individual to balance accounting books.”
So, when the costs of your ideological “green” boondoggle are going to cost voters $2 billion, likely upsetting them, just add your $2.2 billion social cost of carbon keleven to the ledger and presto, you’re back in the black!
A year ago I wrote an in depth article on the Social Cost of Carbon, The short version of the gimmick is that while the costs of green energy policies are born entirely by Vermonters, any benefits are spread thinly across the globe. This means that only a infinitesimally minuscule, undetectable amount of any benefit from Vermonters’ “investment” actually accrues to Vermonters.
As explained by Dean Murphy of Brattle, “The increment of global carbon emissions or the decrement to global carbon emissions from Vermont going from its current RES (Renewable Energy Standard) to 100 percent will be very, very small. And the impact that will be felt globally will be very, very small because Vermont is a very small part of the world. You’ll feel much more impact from what happens in China and India than you will from what you did in Vermont.”
What’s happening in China and India is not carbon reduction. Quite the opposite. Same goes for Russia and most if not all of the developing world in Asia, Africa, and Latin America. In other words, Vermont will see no benefits – cost-wise or trauma-wise -- from reduced flooding or other impacts from severe weather in the future as a result of our renewable energy policy. The money we waste on these policies, however, is money we won’t have to prepare for any future natural disasters.
So, when advocates for these policies say, yes we may be throwing hundreds of millions of your dollars at this, but we have to balance the cost of paying for these policies with the cost of floods, etc, you are free and encouraged to go ahead and point and shout “liar, liar, pants on fire.” There is no balance. In fact, we get stuck paying for both the cost of “going green” and any natural disaster that might have been prevented if we used that money to adapt to cope with evolving weather patterns.
According T.J . Poor of the Department of Public Service, if we continue with our current “business as usual” Renewable Energy Standard policy it will cost Vermont ratepayers about $130 million a year extra on our electric bills. If we adjust the Renewable Energy Standard along the lines of what is currently being proposed by the Renewable Energy Standard Working Group, that cost increases by another $50 million per year to $190 million per year.
Think of this a “Green Virtue Signaling Tax.” We get almost no material benefit for this otherwise unnecessary expense at tremendous opportunity cost.
Poor concludes that Vermont’s Renewable Energy policy “is not cost effective for Vermont ratepayers…. And so those are the tradeoffs that we need to evaluate… how much Vermont ratepayers should pay for societal benefits.” I can tell you that our elected have a very different idea about what that number should be, than do the people they are sticking with the bill.