A Campaign Compromise on Wind Power • In Defense of Affirmative Action

Extend subsidies for wind power, then let them die

Wind power has emerged as one of the most clear-cut issues of the American political season. President Barack Obama wants to renew the technology’s soon-to-expire federal production tax credit. Mitt Romney, his Republican opponent, wants to let the credit lapse.

The best way to handle this is to find an option other than all or nothing. Yes, clean wind energy should receive continued federal support, as Obama says, especially at a time when the industry’s tens of thousands of jobs are helping the U.S. economy. But wind power should also be expected to make it in the marketplace on its own one day, as Romney would have it.

Onshore wind power has improved to the point where it is now the most competitive of all renewable energy sources except hydropower. According to recent estimates from Bloomberg New Energy Finance, it’s on a path to reach “grid parity” — the point where its cost is equal to the baseline price of power on the grid — by 2016. In the long run, in other words, wind can be expected to thrive without the tax credit.

A clear plan to phase out the credit over the coming four years could actually be a gift to the wind industry, which has suffered from the federal program’s unpredictability even as it has benefited from its support. The 2.2¢ tax credit, paid to wind-energy companies for every kilowatt-hour of power they produce, has brought the industry more than $1 billion a year, according to the Joint Committee on Taxation. Yet over the two decades it has existed, Congress has allowed the credit to expire three times, and each time progress in building wind capacity has fallen precipitously.

Renewing the tax credit would add 54,000 jobs over the next four years, according to the American Wind Energy Association, an industry group. Letting the credit expire, on the other hand, would mean losing 37,000 jobs in the sector. Wind power has a promising economic future as the cost per turbine continues to fall.

If Congress takes the easy route and simply extends the credits for a year or two, it would only perpetuate the wind industry’s boom-and-bust cycle. A smarter solution is to apply the longer-term planning that is critical to good energy policy. Let the wind industry know the production tax credit will eventually die out — but over four years so companies are able to plan their operations without the need to guess what tax support they will have.

Even smarter would be to ultimately replace the tax credit with market-based support for wind as well as other forms of clean energy. Many states now have so-called renewable portfolio standards, which require utilities to use a certain percentage of electricity generated by wind and other kinds of renewable power. These states set a target, in other words, and the market figures out the most efficient way to reach it.

Race should still be a factor in university admissions, within limits

The U.S. (i.e., the Obama Justice Department) has filed a brief in support of the University of Texas in Fisher v. Texas, which will probably be the Supreme Court’s most important case next year. Abigail Fisher, a white student, wanted to go to college at the University of Texas at Austin but didn’t get in. So she sued, charging the university with violating the various legislative and judicially imposed rules governing the use of race in college admissions.

It’s clear from the briefs in this case that the Supreme Court’s attempt nine years ago, in Grutter v. Bollinger, to clarify this muddy situation hasn’t worked. The Grutter case contrasted undergraduate and law school admissions at the University of Michigan. It held that a rigid mathematical formula (such as Michigan’s undergraduate policy), where extra points were given to minorities, was unconstitutional at a state institution, but a more flexible policy (such as one used at the law school) could use race as one of many factors without violating the Constitution. “Holistic” is the word that the court used, and it has become a standard one-word description of what the court wants.

The University of Texas’s undergraduate admissions system is a combination of numeric and holistic considerations. The university’s main campus is required by law to admit the top 8 percent of each high school graduating class in the state. That uses up most of the slots. The rest are awarded on the basis of two different indices. An explicit favoritism for blacks and Hispanics was dropped in 1996, after a lower court ruled that race was an illegitimate consideration. Then it was added back into the mix — holistically, of course, only as one of many factors — in 2004, in response to Grutter.

The purpose of affirmative action is not, if it ever was, reparations for wrongs done to a student’s ancestors. Nor is it intended primarily for the benefit of the minority students who do, in fact, benefit. The purpose is diversity. This much-abused notion has a legitimate core: In a multicultural society, a state university (or any university) ought to reflect as many of the diverse strands of society as possible. This is part of the education it offers its students and part of the service it performs for the state.

The question is whether UT’s particular stew recipe meets the Grutter standard. Is it holistic enough? The university argues that, while there may be plenty of blacks and Hispanics on UT’s huge campus, many individual classes have few or none. This, to us, seems like a stretch. Affirmative action can be toxic. We agree with the Supreme Court that it ought to be reserved for vital state interests and applied as sparingly as possible. And we agree that it should be temporary, not a permanent part of the American landscape. But it’s still needed.

To read Caroline Baum on health care and the free market and Susan Crawford on Apple vs. Samsung, go to: Bloomberg.com/view


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