There's general consensus in the scientific community that global average temperatures are rising. It's also generally agreed that increased carbon dioxide is a major factor. However, there's still a great deal of uncertainty about the amount of warming and its expected ecological and economic effects.

Because of CO2's prominent role in warming (i.e., it remains in the atmosphere for over 100 years), many have argued for moving from fossil fuels toward energy sources with less carbon content. While this may be beneficial in principle, it's inevitably accompanied by demands for government sponsorship of alternative energy. But this ignores the dismal track record of previous government efforts, i.e., they degenerate into favors for politically connected industries.

The answer is not to increase subsidies for politically picked energy sources. The surest way to "level the playing field" is to eliminate subsidies for all energy sources. Then those that satisfy consumer demands at the lowest cost will win. It's important to recognize that "cost" includes a measure of the scarcity of the resource, as well as the difficulty of putting it in usable form. Thus, lower cost indicates a more efficient use of limited resources. For example, ethanol is a bad idea when it consumes more valuable energy than it creates. Further, its environmental benefits may be zero or even negative.

Bureaucracies can't pick winners -- no single central entity can. In his 1945 article, "The Use of Knowledge in Society," Nobel economist Friedrich Hayek explained why. The necessary knowledge for any undertaking is never found in one place. It is scattered among various individuals, each with time- and place-specific information. On a small scale (e.g., the family), coordination is relatively easy. But as the size of an operation increases, this dispersion of knowledge greatly limits effectiveness. Thus national, economy-wide plans are based on poor information and executed by individuals with disparate goals.

Involving the government in picking the "right" technologies for everyone -- a national energy policy -- is a sure way to waste money with little or no results. Consumers, from individuals to industries, don't have identical energy requirements. Nor do different regions have similar resources. No central authority can choose what best matches the variety of demands with available resources. The inescapable reality of government-sponsored research is that R&D will always be funded on political merit, not economic merit.

Success results from entrepreneurs discerning opportunities and attempting to provide services that people demand. Those who do this at the lowest cost, succeed; those who don't, fail. The risk of failure makes for prudent investing. More importantly, any funds lost will have been willingly provided by investors aware of the risks, not forcefully coerced from taxpayers who may or may not favor such research.

In contrast, government projects shift the risks to taxpayers. Taxpayers can't pull their money out of government research projects. In fact, when a government program fails to produce results, it's generally rewarded with more funding. Possibly, eventually, it might be abandoned.

Take the Clinton administration's Partnership for a New Generation of Vehicles (PNGV). After eight years and over $1.5 billion in subsidies, the Big Three automakers failed to develop the hyped 80-miles-per-gallon, full-size car -- or any fuel-saving innovations at all. Meanwhile, both Honda and Toyota produced affordable hybrid cars without the "advantage" of government subsidies. Bush has since "cancelled" PNGV in favor of his own boondoggle: the $150-million-per-year Freedom CAR program to promote the creation of fuel cell vehicles.

The very nature of politically decided research guarantees it will continue long after its failure. Political allocation of funds creates well-organized groups with a vested interest in maintaining the flow of plundered wealth. They then pressure politicians to continue funding. Because the cost is spread over the taxpaying population at large, those footing the bill have less incentive and more difficulty organizing to demand an end to the waste.

The government may have a role in funding basic research, which provides no profit potential, but it should not develop or direct applied technologies. There are many alternative energy sources to petroleum: nuclear, solar, wind, hydropower, biomass, geothermal, tidal, etc. The decision of which ones to use where is best left to consumers and firms communicating in the marketplace.