Whether it's energy policy or financial policy, "people" want to be protected from bad things. Things like blackouts, high gas prices, housing bubbles and failed credit markets. But we also, apparently, want these things to occur cost free. It's not clear to me whether "people" are the masses or our representatives in government, but it doesn't seem to matter.
Take, for example, discussions about cybersecurity. One report indicates that at least some in Congress believe our greatest national security threat is to the electric power grid. In testimony before the House Energy and Commerce Subcommittee, ABC News quotes Rep. Trent Franks, R-Ariz. as saying the following about a national grid cyber attack:
The sobering reality is this vulnerability, if left unaddressed, could have grave, societal-altering consequences. We face a menace that may represent the gravest short term threat to the peace and security of the human family in the world today.
Wow. That's a huge deal. And I agree it is a serious threat, even though I wouldn't go quite that far.
To address these concerns, one of the legislative proposals is the GRID Act (H.R. 5206), proposed last year. That act:
Amends the Federal Power Act to authorize the Federal Energy Regulatory Commission (FERC), with or without notice, hearing, or report, to issue orders for emergency measures to protect the reliability of either the bulk-power system or the defense critical electric infrastructure whenever the President issues a written directive or determination identifying an imminent grid security threat.
The Congressional Budget Office says the bill's "Statutory Pay-As-You-Go Impact" would be $0 over the next five years, and cost a little less than $7 million per year between 2015 and 2120. (See pdf here.) Pretty modest costs for the "gravest short term threat to the peace and security of the human family in the world today."
Similarly, Americans, and people around the world, support green energy, but are suspect of the cost. A June 2010, a Pew Research/National Journal Congressional Connection Poll found that 87% of those polled supported requiring "utilities to produce more energy from renewable sources." However, as a Financial Times/Harris poll found in October 2010 (press release pdf here), "When those who pay energy bills were asked how much more they would be willing to pay for renewable energy, most people in all countries said either no more or only 5% more." Interestingly, more people in the United States were willing to pay more than 5% for clean energy than those polled in Italy, Spain, France, Great Britain, and the United Kingdom. Australians also prefer green energy, according to The Economist, "So long as it doesn’t cost too much."
What does this tell us? Well, a few things. First, we have great intentions on a lot of fronts, but those intentions are limited by our pocketbooks. It's nice to want things, including safety, but we need to be willing to pay for them, too.
Second, it appears Americans are more willing to pay more for some of these things in the energy context than many of our European counterparts, who are often held up as the great green societies. Of course, our European friends pay significantly more than we do for gasoline and diesel fuel. But maybe that's the trade off. We're willing to pay more for electricity; they're willing to pay more for fuel. (Maybe those in Congress will pay attention to this dichotomy and focus efforts on places where they can actually effect change.)
Third, it sheds some lights on financial policies, too. We say we want to be protected from bad actors in the financial industry, but we don't seem to want to spend too much on that protection. We'd rather (it appears) have some high-profile crackdowns on companies bribing foreign officials and those engaged in insider trading.
Ultimately, it is possible that the political market is working and we're getting exactly what we want on both fronts. But that's not my sense, and the polls bear that out. Then again, maybe polls just make us dumb.
–JPF