Red, White, and Blue—and Also Green: How Energy Policy Can Protect Both National Security and the Environment

Too often, energy policy protects the environment while neglecting national security, or vice versa. Since each goal is critical, this Article shows how to advance both at the same time.

To avoid depending on the wrong suppliers, the U.S. and its allies should pursue two strategies. First, they should cut demand for fossil fuel. Along with making it easier to stop buying from the wrong suppliers, slashing demand also reduces greenhouse gas emissions and pollution. Yet although these are significant national security and environmental ad-vantages, there is an offsetting national security risk: like fossil fuel, the main alternative—clean energy—also can foster dependence on insecure or potentially hostile suppliers (like Congo and China). In response, the U.S. and its allies should ramp up domestic production of clean energy technology, while also encouraging households and businesses to use it.

Second, since the transition to clean energy will take time, the U.S. and its allies also need to tap new sources of fossil fuel in countries that are secure and friendly. Yet since new fossil fuel development raises familiar environmental concerns, this Article proposes three ways to do it while still reducing emissions and pollution. First, these new sources should be as “clean” as possible (for example, natural gas instead of coal). Second, in adding new capacity, the goal should be to replace other fossil fuel sources, not to add to them (for example, so more production in the U.S. means less production in Russia). Third, new sources should be flexible, so they can ramp up and scale back as needed. Fortunately, these shifts are relatively easy for U.S. shale producers—indeed, more so than for others—and can be encouraged with the right regulatory approach.

While government intervention is needed to pursue these goals, policymakers should strive to harness the private sector’s capacity to innovate, cut costs, and enhance quality. A moratorium on new fossil fuel development is counterproductive, entrenching a status quo that depends too much on coal, as well as on insecure and hostile energy suppliers. In-stead, the best approach is to “price” the relevant national security and environmental costs with Pigouvian taxes, motivating businesses and consumers to mitigate these costs and letting them choose how to do it. Yet if Pigouvian taxes are not politically feasible, this Article recommends a heuristic called “the marginal efficiency cost of energy”: policymakers should account for all the social costs of each source—private costs, national security costs, and environmental costs—and strive to replace high-cost sources with low-cost sources. This framework should guide all aspects of energy policy—from permits and regulations to rate-setting, mandates, moratoriums, subsidies, and government leases—so policy-makers stay focused on both environmental and national security goals.

This lecture qualifies for 1.5 CPD credits.

Related event: Professor Schizer will also give a lecture on his latest book, How to Save the World in Six (Not So Easy) Steps: Bringing Out the Best in Nonprofits, at 12:30 on October 17. Complimentary copies of the book will be provided by the Ranieri Fund for Nonprofit Education at Columbia Law School. Registration is required for the lunchtime talk, please RSVP here.

Speaker

David M. Schizer is Dean Emeritus and Harvey R. Miller Professor of Law & Economics at Columbia Law School. A twenty-five year veteran of the nonprofit world, he became the youngest dean in Columbia Law School’s history at age thirty-five. Schizer also served as the CEO of JDC, a humanitarian organization active in seventy countries with a $365 million annual budget. Schizer is a scholar of nonprofits, tax, energy, and business law. He also clerked for US Supreme Court Justice Ruth Bader Ginsburg.

The Tax Law and Policy Speaker Series at Allard Law is an academic, interdisciplinary forum for disseminating research on tax law and policy. In past years, the series has featured many leading scholars of tax law and policy from Canada and the rest of the world. The series is often (though not exclusively) held in conjunction with a Tax Policy seminar course offered to UBC law students. Many sessions are open to the public.