Over at Max Sawicky’s blog, smart dude Gar Lipow has argued that market-based mechanisms (particularly emissions trading and carbon taxes) won’t do much to solve global warming. Instead, he claims that energy consumption is, in broad strokes, determined by infrastructure: highways, railroads, power lines, power plants, the layout of our cities, and the like. Market-based mechanisms might affect things at the margins, but major “decarbonization” can only follow from substantial change to infrastructure—which Gar argues can only come about as the result of major investments by the public sector.

It’s a point of view worth considering, and I have no interest in debating him on the point right now.

However, in today’s Seattle Post-Intelligencer, I notice that proposed Washington State energy efficiency standards for new apartment buildings were just scrapped, because developers argued that the they would make new downtown high rises too expensive to be worth building.

In other words, a misaligned energy market is making it harder to make the case for the kind of greener infrastructure that Gar seems to think we need.

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  • If it’s really true that the energy standards would have prevented downtown highrises from being built, they could have been a net minus for energy efficiency. Compared with standard single family homes in the suburbs, downtown living tends to save lots of energy, both for commuting and for heating and lighting. According to a construction industry energy expert:

    “You’ve got 30 high-rise buildings that are about to come out of the ground that won’t be permittable in downtown Seattle.”

    Now, I don’t want to debate that claim either, since I have no idea if it’s accurate.

    But I do think it’s worth wondering: if carbon were taxed—and energy were more expensive as a result—then would tighter energy standards have pencilled out? If there were a market for carbon credits, could the builders have found a way to make money by promoting even greater efficiency?

    Or, more broadly, could taxing the externalities of carbon, coupled with a robust carbon market, make everyone—public and private sector alike—more willing to make the sort of smart infrastructure investments that will allow us to thrive as a society while emitting less carbon? I don’t have answers to those questions, obviously—but they’re worth asking, before we poo-pooh the power of taxes and markets to influence our choices.