The Democratic Party continues to rush ever further into the climate swamp. The left wing of the party accepts climate junk science and now wants to implement rapid decarbonization as national policy through a so-called “Green New Deal” (GND). See also here. They have added many non-climate aspects including providing economic security “to all who are unable or unwilling to work.” This post, however, is limited largely to economics. Presumably most readers of this blog understand why I believe that the scientific basis for climate extremism is invalid, and whatever is done under GND will have no significant effect on temperatures even if fully carried out. Using the GND, however, will make decarbonization even more expensive.
One of the problems with the GND is that it ignores the huge costs of accelerating changes in the basic equipment used to provide energy. This is very expensive and vital equipment for a modern economy. The problem is that this equipment is very long-lived, and moving to new equipment that can use different technology or different fuels is very expensive. Changes in technology/fuel are much less expensive if implemented gradually so that aged, less useful equipment can be retired when it is near to retirement anyway. But the GND proponents want to do just the opposite: Use the power of government to push change rapidly rather than when the old equipment is about to be retired anyway. If the entire civilian airline fleet must be retired within 10 years and replaced with high-speed trains, the cost will be much higher than if the transition is made gradually as it becomes more obsolete and will need to be replaced anyway. But somehow the GND proponents never seem to have understood this. This particular proposal is lunacy, of course, but making the changes slowly would reduce the cost enormously.
Hopefully, the Democratic Party will perceive this reality before they waste ever more of other people’s resources on a decarbonization campaign that we can already say will not accomplish its objectives. They are already bucking history, which has brought about a pronounced shift from lower density, less reliable fuels such as wood and wind to higher density, more reliable fuels like coal, oil, and natural. And they are all for government intervention to bring this about despite the lack of a basis for such intervention. Bucking the trend to higher density, more reliable fuels is a difficult change even for governments to bring about. An additional problem is that economic markets usually make much better decisions on shifting technologies while governments have a rather consistent record of making bad decisions in guessing what the technology/fuel winners will be.
So GND is clearly one of the most expensive technology/fuel approaches to implementing decarbonization. Germany has already tried it by more gradually reducing the use of coal and nuclear fuels. and it appears to be a major disaster with sky-high electricity prices and increasingly unreliable energy availability. Why should we repeat their disastrous approach, but in an even more extreme manner?
Obviously much better policy would be to eliminate government intervention in the choice of energy technologies and fuels. But since decarbonization will not make any significant difference in temperatures, at least use a more economically rational approach.
via Carlin Economics and Science
February 15, 2019 at 10:16PM