Gabe Elsner and Nick Surgey, two anti-fossil-fuel activists, recently published a letter in The Advocate in which they criticize a finding by the Beacon Hill Institute that the Environmental Protection Agency’s clean power rules would inflict substantial harm on the Louisiana economy. They claim that BHI’s work lacks credibility because it is bought and paid for by fossil-fuel interests. My purpose here is to respond to this criticism.
To illustrate their point, Elsner and Surgey trot out a familiar bogeyman, claiming that “the Charles G. Koch Foundation has donated over $750,000 to Suffolk University (where we are housed) since 2008, with much of the funding going to Beacon Hill.” In fact, we pointed out months ago that only about 5 percent of Koch grants to Suffolk have gone to BHI, the rest going to support faculty, graduate students and visiting speakers at the university where we are housed.
Another line of criticism has to do with our “STAMP” model, which we use to translate EPA regulations into economic impacts. The apparent basis of this criticism is that we draw on the precepts of economics 101 in reaching our conclusions. To wit: “Supply equals demand.” Or “If a government policy causes the cost of producing something to rise, its price will rise, too.” This orthodoxy is especially troubling for green advocates who aim explicitly to bring about “skyrocketing” electric rates. You can find our defense of the STAMP model at www.beaconhill.org.
One final smear was their reference to a grant proposal in which we suggested that if state renewable energy rules led to higher electricity rates, the state might want to consider repealing them. By thus seeking to convince the grantor that our work might have policy relevance, we allegedly “sought to manipulate economic research by producing reports that came to conclusions before performing any research.” In the fevered imagination of the environmental left, even a hint that research that might produce policy changes adverse to their ideological agenda is proof positive of a sell out to carbon interests.
Our work puts the lie to this claim. Recently, we reported that rules mandating green power could well end up reducing electric rates in three states — Rhode Island, Illinois and Maryland. We doubt, however, that this revelation will satisfy our critics. They will probably want to argue that our results were paid for by anti-fossil-fuel advocates in those states.
In fact, our methodology yields different results for different states, depending on what the data show. Unfortunately for Louisiana, the data show unambiguously that the EPA rules will do substantial harm to the state economy.
David G. Tuerck
executive director, Beacon Hill Institute