Second, the United States government—like many world governments—heavily subsidizes the carbon-based energy industries while simultaneously passing “environmental regulations” that make a microscopic dent in carbon consumption. According to Price of Oil, the U.S. government spends between $14 and $52 billion in subsidies for the gas, coal, or oil industries, yet any attempt to reduce this number is thwarted in Congress. This keeps the price of carbon-based energies artificially low, interfering with the market process that occurs when goods are scarce.
In the meantime, the federal government and local governments impose carbon taxes onto their citizens, creating a perverse double standard. They attempt to keep people from using carbon-based products through tax policies while encouraging people to use them by driving down their prices. Carbon taxes aren’t the only ridiculous burden governments are placing on citizens to make them pay for their mistakes: plastic bag taxes, incandescent light bulb bans, the Clean Air Act, etc.
The list, tragically, is endless, though I would be remiss to not also mention that the U.S. government hand-crafted the conditions for the BP oil spill.
Despite all of this, entrepreneurs and innovators are still trying to come up with ways to save people money and energy by creating new products for them to try—only for government to get in the way when they do. For instance, many of the financial regulations after the bank meltdown have been biased against green companies and technologies and thus prevent investors from providing much-needed capital for these ideas to come to fruition.
Even if you still believe that governments have some role to play, deregulating markets is still the best way to go to make sure those policies are effective. According to a 2012 study, “renewable energy policies are significantly more effective in fostering green innovation in countries with deregulated energy markets.” Better still, “public support for renewable energy is crucial only in the generation of high-quality green patents, whereas competition enhances the generation of green patents irrespective of their quality.”
In short, the UN is correct to call upon “world leaders” to mitigate climate change. But the “action” that must be taken is to deregulate markets, get out of the way of innovators, and stop maintaining duplicitous policies. And if governments really feel like they must “do” something, they can reduce their own carbon emissions by cutting on so-called “defense” spending—with the bonus of making the world a bit more peaceful.