17 November 2010

Report from The Legatum Debate

[UPDATE: Benny Peiser sends the following note with a request for it to be posted:

Thanks for inviting a response to your colourful story. I would prefer to refrain from any comment until the video of the debate is up so that interested readers can compare the actual arguments of our discussion with your recollection of it. It would be nice if you could post this note.


I'll certainly post up the video when available!]

Last night in Mayfair, I engaged Benny Peiser, of the Global Warming Policy Foundation, and Dalibor Rohac, of the Legatum Institute in a debate over the role of government in energy innovation.  The event was well attended and the Legatum Institute provided a first rate forum for discussion and a wonderful reception afterward.

In the debate I opened by making several points.  One is that debates over whether governments should be involved in innovation policy miss the point -- the fact is that governments are deeply engaged in innovation policies already.  The issue is thus how should governments be involved in innovation policies.

I then characterized and briefly six reasons why public investments in energy innovation makes sense:
  • Containing energy costs
  • Securing energy security
  • Expanding energy access
  • Ending damaging energy subsidies
  • Reducing carbon dioxide emissions
  • Addressing other environmental consequences
I argued that any one of these reasons provided a compelling justification for innovation in energy.  I then provided some data on the paucity of public and private investment in energy innovation, as compared with other sectors, such as health, agriculture and IT.  I concluded by explaining that quite independent of debates among policy wonks, countries around the world were already beginning to focus more attention on energy innovation.  The train is already leaving the station.

In response, Benny Peiser expressed some dismay that I didn't choose to focus my remarks on climate.  He seems to have missed the discussion in my book about obliquity and "policy jujitsu"!  His view is quite simple and principled -- government action should be minimized as much as possible.  Period.  He believes that everything government touches leads to waste or failure, and extends this view to the energy sector.  Benny explained that nations around the world, and indeed the world as a whole, do not in fact have any sort of energy problem, as fuels are cheap and the free market is doing its job meeting demand.  He reveled in citing a litany of failures of government policy, particularly as related to climate in recent years.

Dalibor Rohac joined in with some scathing criticism of my book, arguing that it failed to rise even to the standards of conventional economists who argue that climate change represents a problem of unpriced externalities.  Like Peiser, Rohac expressed disdain that governments would have any role whatsoever (in anything, as far as I could tell).

Part of the disagreement is clearly ideological -- Peiser and Rohac presented standard libertarian views on the role of government.  At some level, such arguments are unresolvable, as they are grounded in different worldviews and orientations.  Giving them a good airing is sometimes worthwhile.  While Rohac never really went beyond theoretical, on points that can be adjudicated empirically raised by Peiser, I think that he is simply wrong on a number of points according to the evidence.

While he may not think that there is an energy problem, he is very much isolated in that view, as judged by the actions of governments and businesses around the world, with respect to the six points that I raise above.  And irrespective of Peiser's and Rohac's views on the proper role of government, the realpolitik is that governments are and will continue to be deeply involved in innovation policies, and there are many examples of such policies contributing to public aims.  I explained in the discussion that I have no desire to debate issues of climate science with Benny, and in fact I would grant in the debate (but not agree with) every one of his points on climate science, as they are related to only one of the 6 justifications that I offered for action on energy innovation.  Ultimately, you can't beat something with nothing, and ideology doesn't expand energy access, keep the lights on and sustain reasonable fuel prices.

The early evening ended with the debate spilling over to the reception, where I met many new and interesting people.  I left the event agreeing to disagree with Benny and Dalibor, and promising to re-engage the debate in the future. My mind was not changed, and I doubt theirs was either, but the event was worthwhile because I learned more about their views and those of the GWPF and the Legatum Institute, and hopefully they learned something more about my views.

Note: If Benny or Dalibor wish to add their reflections I am happy to add those here.