It is often the case that what the government intends with a particular plan, the opposite intended effect ends up occurring. Ludwig von Mises explained this particular phenomenon using the example of the price of milk while addressing the University Club in New York back in 1950:
“The government believes that the price of a definite commodity, e.g., milk, is too high. It wants to make it possible for the poor to give their children more milk. Thus it resorts to a price ceiling and fixes the price of milk at a lower rate than that prevailing on the free market. The result is that the marginal producers of milk, those producing at the highest cost, now incur losses. As no individual farmer or businessman can go on producing at a loss, these marginal producers stop producing and selling milk on the market. They will use their cows and their skill for other more profitable purposes. They will, for example, produce butter, cheese or meat. There will be less milk available for the consumers, not more.”
In essence, what he explains is that the results of central planning by governments will often end up creating the opposite intended effect (provided they actually intended to improve the situation and not make things worse). This is what has recently happened in the State of Hawaii, which is seeking to fully transition to “renewable energy” by the year 2045 and replace their last coal power plant with The Kapolei Energy Storage Facility, which is basically an enormous battery.
The intent was to have this “green” battery, powered by wind, solar, etc., replace the output of the coal power plant (it’s a 185-megawatt storage facility compared to the 180-megawatt coal plant, so it generates more power, which is good) and make the state a little bit “greener.”
However, there are seemingly unintended issues and consequences coming as a result of the use of this battery. Namely, the issue of delays to renewable projects. This is a problem for two reasons:
First, as Pacific Business News reported back in March, the delays “will leave Oahu (the island where this is taking place) with a very tight fuel reserve margin, opening up the possibility of rolling blackouts in the event of failure.”
In essence, it could potentially lead to the same problems that Los Angeles had been facing some time ago, where they simply had no power at all.
Second, and the biggest problem for those who viewed the battery as an environmentally friendly alternative to coal, is that “If there is not enough solar, wind, or battery storage energy to replace the [coal] plant, [Hawaiian Electric Co.] would have to use oil instead to charge things like the upcoming 185-megawatt Kapolei Energy Storage Facility,” according to Pacific Business News.
Now, here’s the thing: Pacific Business News is being rather deceptive here. They phrase the issue as an “if” situation. The reality is, however, that there isn’t enough solar, wind, or battery storage to replace the coal plant with a renewable source of energy. Which brings us to the biggest dilemma for those who are ideologically invested in the success of this project: Hawaiian Electric Co. will have to use OIL to power the giant battery.
But wait, it gets worse for these people. Not only will they be substituting one fossil fuel source for another, they will be substituting one fossil fuel source for a MORE EXPENSIVE fossil fuel source. This led to Public Utilities Commission chair James Griffin to complain that Hawaiians would be “going from cigarettes to crack.”
“Oil prices don’t have to be much higher for this to look like the highest increase people will have experienced. And it’s not acceptable. We have to do better,” continued Griffin.
Returning to Mises, this whole ordeal is exemplary of the phenomenon I had talked about earlier. “The measure proves abortive from the very point of view of the government and the groups it was eager to favor. It brings about a state of affairs, which – again from the point of view of the government – is even less desirable than the previous state of affairs which it was designed to improve.”
Certainly, intending to replace fossil fuel with renewable energy and ending up not only using another fossil fuel source, but also one which is even more expensive than the source which they were trying to replace is absolutely less desirable not only for those in the government and environmentalist whackos, but everyone whom this affects. After all, if the government is going for a more expensive source of fuel, they have to do something to afford it and still operate normally. This, almost always, involves the raising of taxes on the population.
So this entire situation is a raw deal for the government which seemingly wanted to improve their renewable energy use, for those who originally approved of this transition because they believed it would be “better for the planet”, and for those who couldn’t care less if they were using fossil fuels or renewable energies to power things up but who will soon have to fork over more of their hard-earned cash to a government which has screwed them, intentionally or not.
What is perhaps the most unfortunate part of all of this is that many people will not learn the most important lessons to be learned out of this: central planning from the government is pretty much always a bad thing.
This has been shown to be the case in Germany (more than once), in Australia, New Zealand, Great Britain, Russia (both now and when they were the Soviet Union and militarized the workplace to try to mitigate strikes in factories and “restore order” but it only led to more strikes, particularly in the areas most militarized), China, most countries in Latin America, and in many places in the U.S. And yet, this crucial lesson is not always learned by some people, even those who experience such central planning.
Even assuming the absolute best intentions by the government (and that requires a whole lot, knowing the evil nature of Man), it often only ends up getting in the way of the progress it seeks to create, even ending up creating regress as a result.
Like with the example provided by Mises of trying to control the price of milk for the sake of poor people, but only creating a shortage of milk in the process and making things worse for the poor, or like with the example of the current situation in Oahu, Hawaii, even under the best circumstance regarding the true intentions of the government, the government ends up making things worse, not better.
The words of Ronald Reagan ring very much true in this instance: “The most terrifying words in the English language are: I’m from the government and I’m here to help.”
“A ruler who lacks understanding is a cruel oppressor, but he who hates unjust gain will prolong his days.”
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