Energy and the environment: conflict in public policy
The study identified the basic energy-environmental problems from an economics point of view, examining the possibility of market failure, the possibility of monopoly in the oil industry, impact of the crude oil embargo of 1973--1974, and the important shift in the U.S. from long-term expansion of oil and gas production to a new declining trend for both energy sources. The history of government energy policy is explored in detail and, in the major policy areas, it is found that past government policy contributed to what is now called the energy crisis. In view of the failure of past energy policies, one cannot be confident that present energy-environmental problems will be solved by new government policies, Prof. Mead concludes. Major public policy options for the future are examined. This analysis indicates that new subsidies, designed to change the energy-consumption mix and to reduce energy consumption in total, need to be examined in terms of their costs and benefits. New subsidies should be justified before their enactment by a showing of net social benefits. New environmental protection measures should require a prior demonstration that their benefits exceed their costs. Proposed antitrust legislation is reviewed and this endeavor was found to be misdirected. Proposals to expand price controls over oil and gas are reviewed as were suggestions that public utility type controls be imposed on the energy industry. It is concluded that the system of Strategic Petroleum Reserves is economically justified on the basis of obvious externalities in the area of economic stability and national security. (MCW)
- OSTI ID:
- 6300211
- Resource Relation:
- Related Information: Special Analysis No. 78-1
- Country of Publication:
- United States
- Language:
- English
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ENERGY SHORTAGES
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