All signs point to the passage of a Green New Deal sometime early in the next administration. The idea, which has been kicking around for a long time is to kill two birds with one stone: Save the economy and save the environment.
The Economist magazine has a message to Obama and the Democrats: Don’t do it!
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.
Why can’t you just combine the two? Because throwing money towards green energy doesn’t work. Witness the inflating and subsequent bust of the ethanol bubble. Or take subsidies of solar:
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.
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