In her interview with Anderson Cooper for CBS’ “60 Minutes”, the recently sworn-in Rep. Alexandria Ocasio-Cortez, D-N.Y., outlined her plans for the Green New Deal — a radical new project set to eliminate the need for fossil fuels and create thousands of jobs in the next 12 years. Her plans to finance it seem equally ambitious. The new House member suggested applying tax rates as high as 70% on the richest Americans, citing the progressive taxes of the 60’s as the basis for her proposal. However, regardless of your stance on climate change and the morality of such sky-high tax rates, one thing is certain — the Green New Deal is simply bad economics. It does not serve the best interests of the environment, and certainly is not beneficial to the taxpayer.

Ocasio-Cortez during her “60 Minutes” interview (CBS screenshot).

Similar proposals aimed at environmental conservation and renewable energy have been launched in the very recent past. The 2009 American Recovery and Reinvestment Act, a stimulus package enacted by the 111th Congress, aimed at providing “measures to modernize our nation’s infrastructure, enhance energy independence … and protect those in greatest need.” Under the ARRA, the Energy Department granted over $35 billion in stimulus money to various companies in the renewable energy sector and provided vocational training for the unemployed. Despite these monumental efforts, much of that sum ended up being wasted, as countless companies which received millions in subsidies filed for bankruptcy, and many specifically trained to work in the energy sector are still unemployed.

Take the example of Solyndra — a now-defunct manufacturer of cylindrical thin film solar cells based in Fremont, CA. Once commended by President Obama as “a testament to American ingenuity and dynamism,” Solyndra declared bankruptcy just two short years after receiving a federal loan of $535 million — over three quarters of its total venture capital. Around 1,100 workers were laid off as a direct result of Solyndra’s liquidation, and the company quickly became a poster-child for reckless government spending.

Solyndra is not alone in its failure to meet manufacturing and employment goals. Fisker Automotive — a hybrid-electric luxury car manufacturer borrowed $193 million of federal money, but only repaid $53 million, shortly before announcing its bankruptcy in late 2013. Hybrid Technology Holdings, an investment group controlled by a Hong-Kong billionaire bought Fisker’s assets soon after the bankruptcy was announced. In other words, the US taxpayer financed research, development, and production for an electric vehicle that could not compete in the marketplace and ended up being acquired by a foreign private investor for a fraction of the price. That seems like money well spent.

Proponents of the Act often argue that providing training in the renewable energy market was the true hallmark of the legislation, but that too, unfortunately, is not true. According to a 2011 WSJ article, in the state of California alone “$15 million went to train workers in skills such as solar-panel installation, but 62% of that program’s alumni remain jobless.” Jen Stutsman, a spokeswoman for the Energy Department, said the Act “helped to create tens of thousands of clean-energy jobs in California and across the country.” The number of jobs created, however, is dwarfed by those still unemployed and the exorbitant amount of funds allocated for training.

Environmental conservation and green job creation seem like worthwhile, altruistic causes that anyone could get behind. It seems logical that the government should allocate funds to accelerate development in these fields, however the data seems to contradict that logic. Federally funded businesses typically attempt to scale up at an unsustainable pace amidst regulatory burdens, and crumble under their own weight. Their optimistic promises are rarely delivered, and the taxpayer gets to foot the bill. Government interference has brought the United States no significant competitive advantage in the global renewable energy market. Over $35 billion has been allocated inefficiently, and now, almost a decade later, we seem to be repeating our own mistakes on a larger, more disastrous scale.

EPA budget cuts and air quality seem to have no correlation (Property and Environment Research Center).

Counterintuitively, a laissez-faire approach to renewable energy appears to be much more sustainable and efficient. This past year, the EPA saw a whopping 23% budget cut, one of the largest in recent history, and yet carbon emissions in the US fell to a 20-year low. Despite recent pushes for coal mining as a centerpiece of the US energy platform, opening a solar plant has become cheaper than maintaining a coal plant, even in traditionally coal mining states such as Indiana and Colorado. In fact, the Northern Indiana Public Service Co. found that customers can save “more than $4 billion over 30 years by moving from 65% coal today to 15% coal in 2023 and eliminating the resource by 2028.” What the government spent billions on and failed, the private sector provided at no cost to the taxpayer. The market decided that the renewable energy trend is potent, and progress has been made without government interference.

Despite the experience of Fisker Automotive, the demand for energy-efficient electric vehicles is rising at unprecedented rates. Bloomberg New Energy Finance analysts estimate that the total cost of ownership — combining purchase price and running costs — of “battery-only cars will drop below those with internal combustion engines by 2022, even if conventional cars improve fuel efficiency by 3.5% per year.”

The future of electric vehicles seems brighter than ever, and yet the government manages to spend money recklessly on unsuccessful enterprises in a field with endless possibilities. Manufacturing electric vehicles also shows enormous potential for employment opportunities. As of August 2018, the Tesla Gigafactory alone employs around 3,000 people, even though Tesla receives a small fraction of the government subsidies given out to the Big Three — Fiat/Chrysler, GM, and Ford. This is a small step towards a greener, energy-efficient future without active government intervention.

An aerial shot of the Tesla Gigafactory 1 (telsa.com/gigafactory).

Few great innovations resulted from the orders of bureaucrats and senseless resource allocation, much like Ocasio-Cortez proposes. Private enterprise always searches for the most efficient, productive method of extracting profits, and renewable energy seems to be its next project. While subsidizing the field seems as though it would accelerate research and advance production, the results are usually marginal, if at all positive. Populist calls to tax the rich and use the funds for the common good are easy to get behind, but often do not serve their causes. We have already made a $35 billion mistake. Let us not forget the lessons of history and repeat it again.