I thought this article in the Economist was very smart. How about this for an idea – fix the economy and global warming together. The premise is that the economy needs a massive stimulus. What if the there were a new deal that invested in environmental technology and other solutions, thus creating both ways to solve global warming and creating new jobs? Read on…
Green, easy and wrong
Nov 6th 2008
From The Economist print edition
Why a verdant New Deal would be a bad deal
TWO pressing problems face the world: economic meltdown and global
warming. Conveniently, a solution presents itself that apparently
solves both: governments should invest heavily in green technology,
thus boosting demand while transforming the energy business.
This notion is gaining credence around the world. Last month the
United Nations called for a “Global Green New Deal”. But it is in
America that the idea is really taking off. The United States
Conference of Mayors reckons that green investment should provide 2.5m
jobs. The Centre for American Progress, a leftish think-tank, thinks
$100 billion worth of spending in the area would spawn 2m jobs. The new
president tops both. Barack Obama proposes spending $150 billion over
ten years, thus helping, he says, to create 5m jobs.
There is a historical parallel to this synergy between two worthy
aims. Just as military spending at the end of the 1930s defeated both
fascism and the Depression, so spending on fighting climate change
should both wean mankind off fossil fuels and avert what might
otherwise turn into the most serious downturn since the 1930s. Isn’t
that neat?
No. Mr Obama’s commitment to solving climate change is devoutly to
be welcomed. There is also a case for giving the economy a boost
through government spending. But combining the two by subsidising
renewable energy is, like many easy answers, the wrong solution.
Governments can discourage companies and people from producing CO2
by making polluters pay or by reducing the costs of clean energy.
Europe does both, through a cap-and-trade system (which caps CO2
emissions and requires companies to buy permits to pollute) and through
subsidies. Mr Obama is, quite rightly, planning to introduce a
cap-and-trade system, but he is also promising massive subsidies.
Making polluters pay is unpopular with companies. Politicians don’t
much like it either, because it means a fight with business. But it’s
the efficient way to discourage pollution, because it shifts costs onto
those who should bear them, and allows the market to pick the best way
of cutting emissions.
Sunless solar and the biofuels bust
Subsidies are more popular but both theory and practice argue
against them. Subsidising clean energy requires politicians to decide
on the best way of delivering it, and their judgment is likely to be
worse than the market’s. America’s huge ethanol subsidies, for
instance, have led to overinvestment in the businesses, which is now
experiencing a sharp bust, and have helped drive up the price of food,
with painful consequences for the world’s poor. Germany’s generous
solar subsidies covered the roofs of one of the world’s most sunless
countries with solar cells, thus pushing up the price of silicon and
reducing the cost-effectiveness of solar power in countries where it
actually makes sense. Both subsidies promoted the wrong technologies;
both wasted taxpayers’ money.
The easy notion that there is a single solution to the world’s
economic and climatic problems is, thus, a dangerous one. Yet there is
a synergy, though a subtler one, between the two issues. In the midst
of a financial crisis seen as emanating from Wall Street, a
demonstration of leadership would help burnish “Brand America”.
Combating climate change, which demands technological and financial
resources of the sort that only America has, offers the right sort of
challenge.
The world needs America to lead the fight against climate change.
But if Mr Obama goes about it the easy way, rather than the right way,
he will discredit the cause he espouses, and thus damage the planet
instead of saving it.
The article’s author seems confused. Is he arguing that the best answer to climate change is to “leave it to the free market”. Given the events of the last two months I’m not sure I have much faith in the free market to save the planet.
President Obama may not have the perfect answer, but a concerted effort by the US government on all the fronts that President Obama is proposing would sure be a lot better than subidies to the oil companies and ranting “Drill Baby Drill”.
If you read President Obama’s (I love saying that) program he is not proposing a “single solution” but a broad multi-pronged approach to our energy policy. Who knows whether nuclear power or solar energy or wind is going to be the winner in the long run? But it’s important to stimulate activity on all these fronts if we’re going to make progress.
So many are pinning so much faith and hope on this one man, Obama.
Let’s hope he doesn’t disappoint.
I think it was Gunter Grass who once said, something along the lines, that it is a citizen’s duty to be difficult to govern.
So despite what that ‘bleary’ woman said all those pro Obama bloggers should perhaps, now take a more cynical approach, just to help keep him on track.
I am a naturally cynical person but I refuse to be cynical about Obama. At least not yet.
Remember how Margaret Thatcher had to be so much better than all the men to become Prime Minister? And how, because of that, she was such a successful PM? (Even though I loathed most of her policies.)
I really think we may be seeing the same phenomenon in Obama. He was a black man with only a few years experience on the national scene yet he beat all the Democratic contenders… including the Clinton machine. Then he beat a white war hero with 25 years experience in the Senate to win the general election. And he won by a huge margin. And he won Virginia and North Carolina! As a black man he had to be soooo much better than the others to beat them.
This guy is something else. I think he could be an exceptional president.
Th fascinating thing about Obama is that he appeals to the idealist in al of us, ey he is level-headed and pragmatic.
Ironically the hge challenges he faces may be good for him. I hope that he makes bold moves. He has the opportunity to inspire a generation to affect hugely positive change. It will be disappointing if he doesn’t.