It is amazing to me that public officials are still pushing green technology as a cure for economic problems. We are in our current predicament in part because government policy directed resources into the housing sector with little regard for the economic efficiency of such investment. Now, these same officials would have us believe they will do better this time with green technology. Does anyone still believe that governments can allocate capital better than the market? If so, on what do they base that belief?
Ban Ki-Moon, head of the UN, has an editorial today in the Gulf Times laying out his vision for economic growth and climate nirvana:
NEW YORK: Amid the pressures of the global financial crisis, some ask how we can afford to tackle climate change. The better question is: how can we afford not to?
Put aside the familiar arguments – that the science is clear, that climate change represents an indisputable existential threat to the planet, and that every day we do not act the problem grows worse. Instead, let us make the case purely on bread-and-butter economics.
At a time when the global economy is sputtering, we need growth. At a time when unemployment in many nations is rising, we need new jobs. At a time when poverty threatens to overtake hundreds of millions of people, especially in the least developed parts of the world, we need the promise of prosperity. This possibility is at our fingertips.
Economists at the UN call for a Green New Deal – a deliberate echo of the energising vision of US president Franklin Roosevelt during the Great Depression of the 1930’s. Thus, the UN Environment Programme is launching a plan for reviving the global economy while dealing simultaneously with the defining challenge of our era – climate change.
The plan urges world business and political leaders, including a new US president, to help redirect resources away from the speculative financial engineering at the root of today’s market crisis and into more productive, growth-generating, and job-creating investments for the future.
I’ve got news for Mr. Ki-Moon – the science is not clear, climate change is not an existential threat and it is not sure to get worse. How can we help the poor by wasting scarce capital on green technologies that are less efficient than the alternatives?
As for the echo of the New Deal, I’ve heard that a lot lately. Democrats are chomping at the bit to copy the failed policies of FDR and turn this recession into something much worse. Why would we want to copy policies that were such obvious failures? FDRs policies did not get us out of the Great Depression – they extended it. And if we enact policies that are similar – such as raising taxes, raising government spending, attempting to control prices and wages and bashing business – we will get the same results as FDR. Those results are available for anyone interested in finding the truth rather than just believing in the myth of FDR.