Are Economists Blocking Progress on Climate Change?

By Servaas Storm, Senior Lecturer of Economics, Delft University of Technology. Originally published at the Institute for New Economic Thinking website

Dutch economist Servaas Storm, co- author of a widely-read 2018 study on climate change, “Why Green Growth is an Illusion,” talks to the Institute for New Economic Thinking about where we are today.

Lynn Parramore: In 2018, you and your colleague Enno Schröder warned that economists promoting “green growth” are fostering illusions. Why can’t we have economic growth and development without destroying the planet?

Servaas Storm: In our work, Enno Schröder and I look at the historical record on economic growth around the world, along with human energy use and the resulting CO2 emissions. Then we construct a growth path for the global economy during the period 2015-2050. Our model path is based on optimistic, but still feasible, assumptions concerning future energy efficiency improvements and reductions in carbon emissions.

To understand what’s driving carbon emissions, it’s helpful keep a couple of things in mind. First, emissions will tend to grow at the same rate that the economy is growing. Economists call it the “scale” effect. But the more efficient we become at using energy and the better we get at reducing pollution through technology and changing human behavior, the more we can reduce carbon emission growth relative to real GDP growth.

So while the scale effect always raises CO2 emissions, what we call the ‘technological-change” effect lowers carbon emissions. That’s why economists talk about the goal of “decoupling” economic growth and CO2 emissions. You want a “technological-change” effect that’s bigger than the scale effect.

Disappointingly, we find no evidence so far of decoupling. Despite the 2017 Paris pledges and good intentions, CO2 emissions are still rising, not just in China and India, but also in OECD countries (a coalition of wealthy countries that work together on common eco-social problems).

The energy efficiency improvements and rates of decarbonization aren’t yet enough to offset the carbon emission increases originating from the growth of the global economy. So the scale effect still dominates.

LP: What are economists missing when they talk as if decoupling is happening?

SS: There are deep uncertainties concerning the climate system and its interactions with the ecosystem of the Earth and the global economy, and self-reinforcing runaway warming is a real, though highly uncertain, possibility. Unfortunately, economists can’t handle any of this. It’s their first reflex to assume that it’s possible to use something called “optimal control.” That’s a technique of finding policy instruments that will control outcomes in a system, in this case working out the economically optimal pathways to solving or mitigating climate change in terms of the timing and the extent of CO2 emission reduction.

It all reminds me of a story told in Nathan Hill’s novel The Nix. In Norwegian folklore, the Nix is a ghost that takes on different shapes which it uses to mislead people, exploiting their vices and bad habits. The Nix appears as a beautiful horse which invites a young man to take a ride. Initially in awe and nervous, the young man steps on the horse’s back, and he rides – at first very slowly and cautiously, but then faster. The horse accelerates, and in his enthusiasm, the rider loses his awe and begins to feel all-powerful an in control. Surely he is the most talented horseman in the world. At exactly this point, the horse jumps off a cliff at full speed– and the young man gets killed on the rocky beach.

Economists suffer from similar self-deception when they believe their optimal control analyses of the costs and benefits of climate mitigation policies can inform climate policymaking in any meaningful manner. They can only become part of the solution once they realize that they are not engineers. The point is not to endlessly debate, for example, the optimal social cost of carbon, acting like the medieval scholars arguing about how many angels can sit on the head of a pin. Efficiency is not the issue. What matters is how effective the climate change policy is going to be.

The future has to be radically different from the past. Small tweaks and tinkering won’t cut it. We need structurally lower energy use and radically lower carbon emissions.

LP: What are some of the concerns with existing and well-known economic models?

SS: Climate economists, like economists in general, tend to forget that the policy conclusions drawn from their models are only as good, robust and realistic as the assumptions underlying the models they use – and this is precisely the problem: these assumptions are often flimsy, debatable and/or unrealistic. Let me mention three.

First, most well-known models fail to adequately capture small-probability but high-impact (catastrophic) outcomes associated with runaway global warming. Most models ignore that global warming may become an unstoppable self-reinforcing process once certain temperature thresholds are crossed.

Second, models estimate the societal net benefits of money spent on climate action and then compare these benefits to the returns which humanity could have made by investing the money not on some other, low-risk financial instrument, like government bonds. Such exercises imply that climate economists believe that government bonds will continue to yield rates of return of 3 – 3.5% each year even under deterioriating climate conditions. That’s a bit of a stretch.

Finally, most models assume that to finance the needed investments so as to have higher welfare in future, we must restrain our consumption today and raise savings. This logic is powerful. It appeals to the Calvinist notion of delayed gratification, which, according to Max Weber, was crucial to the Protestant Ethic and the rise of entrepreneurial capitalism. But it is wrong. Our economies are “monetary economies” in which commercial banks can create new money to finance investment and we don’t need to raise savings first. This means there is no trade-off between consumption now versus consumption in the future, as erroneously assumed in climate economics.

LP: What if we could acheive a radical break with the past? Could we then grow the global economy while reducing global CO2 emissions?

SS: Many scientists agree that the planet warming by more than 2 degrees Celsius above preindustrial levels will be catastrophic. So it’s useful to think of trying to stay within a range of 1.5 degrees warmer or less.

Let’s say we have some amazing technological breakthroughs and we reduce emmissions by 85% by 2050, which some optimistic scientists think would allow us to avoid that limit. Alas, we find that even in that perhaps overly-optimistic scenario, the global per capita income growth still has to be very low. Pretty close to zero. Is that even possible?

“Green growth” is a very tough goal. I think it’s the wrong thing to emphasize. It may be better to focus on radically decarbonizing our economies. If we do this, and it turns out that our economies can still grow, then that’s great. But if getting the carbon emmissions down means that we can’t also have global economic growth, then we’ve got to accept that.

LP: But does that mean we can’t have economic progress? No hope for people’s economic lives to improve?

SS: Not at all. Economic growth and economic progress are not the same thing. If we were to say that rich OECD countries should aim to avoid increasing the amount of stuff they produce, they could still have goals of economic progress. They could aim instead for more and better jobs, greater access to education, health, public transportation, lower pollution burdens, and clean energy sources. Things that would be great for the majority of the population.

The issue is one of better distributing our economic resources, possibly as part of some Green New Deal.

LP: You’ve noted in the past that President Obama was not realistic in arguing that the U.S. economy could keep growing without increasing CO2 emissions thanks to the rollout of renewable energy technologies. How do you assess the situation now under Trump? What about Europe and China? Is anyone being more realistic today?

SS: The outlook is not good. The Trump administration is not the only government announcing its withdrawal from the voluntarist Paris agreement. (I call it voluntarist, because the agreement concerns official pledges by countries to reduce CO2 emissions, but lacks enforcement mechanisms). The Bolsanaro government in Brazil, the new government in Australia, part of the Italian government, and more are threatening to do the same.

China has made huge advances in energy efficiency and has also started to decarbonize, but the scale factor of China’s economic growth is still more than offsetting the drastic improvements in energy and carbon technologies.

The European Union (EU) is not delivering and policies are often counterproductive. Look at the ‘Yellow Vests’ protests in France. French President Macron proposed a consumer carbon tax on (car) fuels, which will hit the incomes of people who aren’t wealthy and who already have to cope with all kinds of economic insecurities and downward mobility. The outcome is not just a populist revolt, but a major discrediting of climate change mitigation policies.

In the Netherlands, the center-right government proposed a carbon tax on consumers but not on major polluting corporations. In March 2019, voters revolted. The government parties lost the provincial elections to a new rightwing populist party, which says that climate change is just a Marxist plot!

The EU has to come up with climate policies which protect the lower- and middle-income groups as much as is possible from the costs of adjustments, while taxing carbon emissions at their source. That means taxing the 100 global corporations which together are responsible for around 70% of cumulative CO2 emissions. It means taxing the rich to bring about a more fair and politically acceptable burden of adjustment.

LP: Is there any new political momentum on climate change that could help? What about the Green New Deal embraced by many Democrats in the U.S.?

SS: The recent electoral successes of the Green Parties in Germany, the Netherlands, Finland and France do appear to suggest that there is a growing political momentum on climate change in the EU. But there is more than meets the eye.

The growing support for the Greens within the EU has come from voters abandoning the established center-left parties, like the social democrats. At the same time, there’s more support for populist center- or far-right parties, which deny or trivialize climate change and rally around a false dichotomy of “jobs” versus “the environment.” These politicians claim that they prioritize jobs, supposedly in contrast to the Greens.

Overall, the political landscape is becoming fragmented and polarized exactly at a time when we need collective, coordinated climate action. Attempts by President Macron and other governments to raise taxes on carbon-intensive consumption have seriously weakened popular support for climate mitigation. That gives the populist right a golden opportunity to beat the drum of climate change denialism. Scary stories about an impending end to life on Earth drive working-class people, many of whom have been facing existential economic insecurities for decades, into denial, and from there into the arms of the populist far-right.

The Greens have not yet convinced potential voters that there is no conflict between saving the environment and having good jobs, decent income, and high standards of living.

This is where the Green New Deal is crucial, if by it we mean a comprehensive program to green our economy and to replace private with public investment and consumption in order to adapt social and economic life to a changed environment. A Green New Deal of this kind should create good jobs and benefits rather than burden the lower- and middle-income classes. And it has to involve progressive, redistributive taxation to fund high-quality, zero-carbon, and accessible public transportation rather than expensive individual Tesla cars, accessible high-quality education and so on.

LP: You’ve observed that even good solutions won’t work within a socioeconomic system founded on ideas like letting markets “decide” who gets what and allowing big corporations to operate with little regulation. How do we have to shift our basic thinking in order to avoid climate catastrophe?

SS: As a society, we’ve given deregulated financial markets the task of maintaining the stability of the social and political order. Corporations are supposed to behave themselves in the proper way through pressure from shareholders and the stock market. Individuals are disciplined by engaging in labor markets and through debts. Governments, arguably, are being disciplined by bond markets. Market forces are supposed to keep everything and everyone working together the best way.

Economists call this “social efficiency.” They’ve swallowed the idea so completely that it’s hard for them to think about any alternative social order. Within this system, the only way you get behavioral change, like reducing CO2 emissios, is to use price incentives. You put a price on carbon, and eventually costs and prices will motivate self-interested firms and consumers to change their decisions and cut carbon emissions. The same price incentives are supposed to focus the minds of innovators and engineers on developing new zero-carbon (energy) technologies and products.

This is a fantasy. Slowing global warming requires deep transformational change, a process which in turn needs long-term steady directional thrust (in investment and technology development), which short-termist financial markets have never been able to provide in history and can’t provide by their very nature. Why? Because vested interests in the fossil-fuel economy will try to block or delay needed structural change. Plus, self-interested market behavior by individual producers and consumers does not automatically or necessarily add up to a better outcomes for society.

Progress on climate change demands collective action, both between nations and within nations. Questions of who is paying the cost and who is getting the benefits are critical.

We need coordination, direct steering and guidance of investment, research and develpment, along with innovation and mechanisms for burden sharing.

The effort can only work if it is inclusive, democratic and fair: the strongest shoulders must carry the largest burden. Bottom line: we have to think about alternative ways to ensure social and political order. I know that all this seems far-fetched and well beyond what is politically possible today. But I am old enough to agree with Jan Tinbergen, the first Nobel laureate in economics (jointly with Ragnar Frisch), that the “idealists of today often turn out to be the realists of tomorrow.”

LP: What do you say to people who dismiss you as an alarmist?

SS: That they are wrong. Ignoring the cumulative evidence on global warming is behaving like an ostrich. I try to be a realist, staying away from the often naive “can-do” engineering attitudes of techno-optimists (which ignore or underestimate major practical social and political obstacles standing in their way) and steering clear from the fatalist pessimism.

Slowing down climate change is technically and economically possible, but we need immediate and radical actions, most of which go against the vested interests of fossil-fuel corporations as well as against the established ideas and interests of most economists working on climate, who wrongly think that the problem can be solved in an economic-engineering fashion. Establishment economics should become part of the solution intead of the problem.

There is also ample scope to raise corporate taxes on Big Oil corporations and carbon-intensive (chemical) companies, many of which succesfully engage in massive tax evasion and shifting. We also have to fix the problem of political money by finding ways to inoculate our politics from corporate billionaire power. And if central banks are able to use unconventional monetary policy instruments to fight a global financial crisis and rescue banks, then they clearly should be able to do the same when fighting a looming climate disaster. There are grounds for optimism.

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32 comments

  1. Ignacio

    Although I wholeheartedly agree with much of what Storm says here, and I have to say he is not the first Dutch I read/hear displaying very reasonable arguments (my admiration for Storm and the others), the big problem of this discourse, from a PR perspective, is that it is mostly about lecturing people that don’t want to be lectured. If someone says “almost everybody is wrong”, will almost certainly end painted into her/his corner as an alarmist no matter how righteous is the discourse.

    This is not to say that the author isn’t offering good ideas/solutions but the negative feedback he spells overcomes those. For instance, this phrase

    The Greens have not yet convinced potential voters that there is no conflict between saving the environment and having good jobs, decent income, and high standards of living.

    is almost certainly disheartening for many readers the way it is formulated. It will be read that because of CC, you can’t have a decent income, a good job or some comfort. Needless to say that, to fight CC, participation and enthusiasm is precisely what is needed. In the next paragraph he says the contrary, that a GND can bring good jobs and reduce the burden of the lower/middle income. The message is contradictory and I believe that the negative statements damage the whole discourse in a way that makes it useless if the objective is to bring people to your side.

    Reply
    1. philnc

      Green parties and proponents of a Green New Deal need to present detailed, concrete plans showing exactly what will happen if they’re given power. They need to begin by recognizing that their job is going to be a lot harder than that of the right-wing demagogues whose message is as simple and focused as it is brutal and dishonest. Getting it done is going to require a lot more than a series of twitter storms and sixty second campaign spots on cable TV. The fact that even (the often faux) alternative media haven’t really got on board beyond whimpers of support for the vague notions forwarded so far is not a good sign

      Reply
      1. Ignacio

        Detailed concrete plans…
        Why is it that when you have a green agenda you have to be more detailed, comprehensive, predictive and ultra responsible?. Why if you are a populist you don’t have to deliver and it is OK whatever you do? Is this kind of inverted calvinism? Is this just a simple way for deterring the GND?

        Reply
        1. Ignacio

          You should realise that you are asking for is well above human capabilities. Detailed concrete plans is not exactly what is required. I agree with the author that what is needed is a legally binding compromise on reductions in CO2 emissions, fuel fossil usage etc. Second, you need to bring the broadest possible spectrum of social actors into this compromise. Then, and only then, is when you start the planning, knowing that it will be dynamic and change rapidly depending on whether objectives are accomplished or not.

          Reply
        2. jrs

          Well that’s why I love the legwork the Jay Inslee campaign has been doing on proposing detailed and concrete plans, whether or not they go far enough (we needed this 30 years ago really but …). If plans were what we needed.

          But we don’t have power, and if we (we in this context = people who think we need deadly serious action on climate change) don’t get that it’s not going to matter if we have the best devised plans in the universe.

          https://www.vox.com/energy-and-environment/2019/6/24/18715163/jay-inslee-climate-plan-phase-out-fossil-fuels

          Reply
        3. Grumpy Engineer

          @Ignacio:

          The reason we need “detailed concrete plans” is so that we can avoid the fate the ill-conceived Energiewende. This was Germany’s equivalent to the climate portion of the Green New Deal, where they embarked on an ambitious plan to reduce CO2 emissions by pushing hard on renewable energy while de-emphasizing nuclear. They implemented massive feed-in tarrifs and direct subsidies, and the amount of renewable power deployed in Germany utterly exploded. Many of the Democratic candidates for president have proposed similar plans.

          Unfortunately, when you look at the numbers, you’ll discover that CO2 emissions in Germany have actually risen since 2009. Despite all their efforts, they’ve made ZERO progress on reducing their carbon emissions. As an added penalty, electricity prices in Germany have risen from about 1.5X the US average to nearly 3X. German electricity is some of the most expensive on the planet. And they’re mining and burning just as much lignite (the dirtiest coal there is) as they ever have.

          In contrast, CO2 emissions in the US have fallen by more than 10% since 2008, and coal consumption has fallen sharply over that same time period. All of this in spite of no formal commitment or industrial policy targeted at carbon emission reductions.

          Pledging to reduce CO2 emissions as a presidential candidate isn’t good enough. Even passing a law requiring that it be done isn’t good enough. German leaders did both and failed. A viable plan is required. And I want to see the details of that plan, as I’m not willing to “take it on faith” that anybody in the political class will get it right.

          Reply
          1. Ignacio

            We have not reached the moment when detailed plans are needed. You can try to do the most comprehensive plan possible spending millions with lots of experts brainstorming and it will be worthless. First because there is no legal binding to that plan and second because you haven’t done new deal-scale planning which requires the widest participation possible and compromise as it occured after the New Deal was approved. Second because the original plan will almost certainly be changed in many ways starting in the first minute of implementation and when you realise its many failures. This is too complex an issue to be planned in such a detailed way before starting. Guidelines would be more important initially.

            I think that what you explain about Germany precisely favours the approach I mentioned.

            Reply
            1. Grumpy Engineer

              How can you do “new deal-scale planning which requires the widest participation possible and compromise” when you don’t even know what steps you’ll be taking to combat climate change? Get everybody all ramped up and ready to go and then have them sit on their thumbs for a year while we figure out what steps we want to take? Or just throw people out there at random and hope that their efforts somehow work out for the best?

              No. You need to have plan before you deploy people. I agree that it doesn’t have to be flawless and that there would be adjustments along the way, but at this point we don’t have anything. The GND just lists a set of goals, with zero description of how to get there. They can’t even decide if they want to use nuclear or not.

              And the “legally binding” aspect is less valuable than you think. Why? Because such laws won’t be enforced. If you demand that the power station operators reduce their emissions by 40% and they can only get to a 15% reduction, what are you going to do? Throw them in jail? Impose rolling blackouts? Are you ready to impose a rationing scheme on fuel purchases (and then watch public support evaporate faster than a thin puddle of hot gasoline)?

              China tried some hard enforcement of carbon emission laws back in 2010 by imposing rolling blackouts. It was hugely disruptive, and they never did it again. Their ill-conceived coal burning restrictions of 2017 met a similar fate.

              Reply
  2. SufferinSuccotash

    During the Yellow Vest uproar one sign carried by one of the demonstrators read “no climate justice without social and economic justice”. This is exactly the message which the Greens have to sell, otherwise any serious effort to deal with climate change will be politically impossible.

    Reply
    1. mle detroit

      “No climate justice without social and economic justice” is exactly what the AOC-Markey resolution calls for. Unfortunately it’s impossible to tell if the New Consensus is actually getting anything done on details. Does anyone know what they’re up to?
      Also, it seems to me that reparations, which are certainly warranted, could best be achieved by starting the GND in the poorest areas and working up from there.

      Reply
    2. GM

      It is also a very good way to ensure nothing will ever be done about sustainability because what people usually understand by “social and economic justice” is completely incompatible with any imaginable set of measures that will actually address the crisis.

      Reply
      1. jrs

        GND type approaches seem untried. It hasn’t been proven it can win politically where others have failed but maybe it can.

        However, it seems some consensus has moved away from carbon tax type approaches as they don’t seem winners politically although some might still get passed and I have no problem with them (just if you can’t win politically, the issue of whether they are winners environmentally or not becomes a moot point – that’s a problem with democracy). Some of the Yellow Vests weren’t even left but they still represent a political problem if far from a political solution.

        I guess what I understand by social and economic justice is people’s needs gets met, aka reaching for an ecosocialism, an economy based on human needs (and define needs, sure that may be one problem, but maybe not the one you meant).

        Reply
        1. GM

          You seem to have missed the point.

          The two absolute prerequisites for achieving sustainability (though they are not necessarily also sufficient) are:

          1. reduction of global population by 90%

          2. immediate transition to a steady-state economy.

          It should be fairly obvious that:

          1. The difference between the GND and what we have now is negligible compared to the difference between the GND and that set of measures

          2. Population reduction is, to put it mildly, rather unpopular, and does not fit people’s definition of “social and economic justice”. Indeed, the racism accusation card was used very successfully back in the 1980s to eliminate population control from all mainstream discussions of ecological issues and from the agenda of all so called “environmentalist” organizations.

          3. An end and then reversal of economic growth is not popular either — people understand “social and economic justice” as “the rich share their wealth with the poor but otherwise it is business as usual”. They do not understand it as “most of us go childless, the rest of us live at the level of people in Eastern Europe in the 1970s, total material consumption does not go further up, and there is a draconian lack of reproductive and consumption freedoms” (even though people in Eastern Europe in the 1970s lived quite well).

          Reply
  3. Todde

    The House passed a bill requiring transgender males being able to compete with women in high school sports.

    Still no word on the 100 hour pledge to pass a minimum wage bill.

    Reply
  4. Rod

    #1 Slowing down climate change is technically and economically possible, but we need immediate and radical actions, most of which go against the vested interests of fossil-fuel corporations as well as against the established ideas and interests of most economists working on climate, who wrongly think that the problem can be solved in an economic-engineering fashion. Establishment economics should become part of the solution intead of the problem.

    #2 This is a fantasy. Slowing global warming requires deep transformational change, a process which in turn needs long-term steady directional thrust (in investment and technology development), which short-termist financial markets have never been able to provide in history and can’t provide by their very nature. Why? Because vested interests in the fossil-fuel economy will try to block or delay needed structural change. Plus, self-interested market behavior by individual producers and consumers does not automatically or necessarily add up to a better outcomes for society.

    IMO radical disruption needs to get started yesterday

    Reply
    1. Damian

      “Policy planners in the German government were hoping that wind and solar energy would replace the production capacity lost from nuclear reactors. A massive buildout of these technologies has dotted the country’s landscape, particularly in the north, with windmills. At a nominal capacity of over 100GWh, equivalent to five Chinese Three Gorges Dams, wind and solar now exceed peak demand. But only on paper.

      Because they work only when the wind blows or the sun shines, their contribution to energy production is highly variable. The unreliability of renewables has meant that an equal capacity of conventional coal and gas power plants had to be built, effectively doubling the amount of capital needed to produce a given amount of electricity and boosting electricity costs.

      The variability of energy production by renewables poses serious challenges to the operators of the electricity grid. Widespread blackouts can be avoided only by shutting off electricity to power users such as aluminum furnaces or glass manufacturers. 78 such mini-blackouts occurred last year. Unreliable electricity coupled with high costs is something found otherwise in developing countries, and this may be the direction in which the German economy is heading as the energy policy failure is beginning to lead to a slow, and perhaps certain ……….deindustrialization.”

      Reply
    2. John Wright

      Consider some recent experiences that I had.

      I visited relatives in the Boston area who live in a Boston suburb with a strong contingent of university professors.

      In this suburb there was some residential building activity, seemingly all to result in the building of larger houses to replace tear downs of smaller houses.

      In an educated community such as this Boston suburb, climate change might have suggested building smaller and more energy efficient homes due to peer pressure.

      But that does not appear to be happening,.

      Back on the West Coast, I visited a Los Angeles area big box store, and the parking lot was nearly full, with many people buying carts of “stuff”, probably created using primarily hydrocarbon energy.

      To me this suggests that cutting consumer consumption voluntarily seems unlikely.

      Coupled with a media (and government) bias toward promoting more population growth in the USA and elsewhere, I don’t see how the world can avoid a very painful adjustment to future climate change effects.

      These are only anecdotes, but my view is that simply too many people need to drastically change their lifestyles for much to be done about climate change.

      As I view it, there is little downside to being a CC denier.

      One can enjoy the current lifestyle, now, and then in a spirit of “we’re all in this together” ask for community support when things get bad in the future.

      Reply
      1. drumlin woodchuckles

        This is why a combination of America abrogating every Forcey-Free-Trade Agreement it is stuck in, going all the way back to GATT Round One . . . and the up-rampingly-harsh application of the Full Metal Hansen FeeTax on every fossil carbon before it is permitted to be sold to the first-link-in-the-chain customer.

        Full Metal Hansen can price-torture fossil carbon out of the marketplace and into extinction within a sealed-off America. Sealing-off America from the Outside EnemyConomy World will stop our Forcey-Free-Trade Trading Enemies from carbon dumping their fossil carbon drek into our beautiful Full Metal Hansen de-fossilized autarconomy.

        Reply
  5. Temporarily Sane

    A long article but well worth reading.

    An excerpt:
    The project of the Green New Deal is really nothing like the New Deal of the 1930s, except in the most superficial ways. The New Deal was a response to an immediate economic emergency, the Great Depression, and not a future climate catastrophe: its main goal was to restore growth to an economy that had shrunk by 50 percent and in which one out of every four people was unemployed. The goal of the New Deal was to get capitalism to do what it already wanted to do: put people to work, exploit them, and then sell them the products of their own labor. The state was necessary as a catalyst and a mediator, setting the right balance between profit and wages, chiefly by strengthening the hand of labor and weakening that of business. Aside from the fact that it involves capital outlays that are much larger, the Green New Deal has a more difficult ambition: rather than get capitalism to do what it wants to do, it has to get it to pursue a path that is certainly bad for the owners of capital in the long run.

    Whereas the New Deal needed only to restore growth, the Green New Deal has to generate growth and reduce emissions. The problem is that growth and emissions are, by almost every measure, profoundly correlated. The Green New Deal thus risks becoming a sort of Sisyphean reform, rolling the rock of emissions reductions up the hill each day only to have a growing, energy-hungry economy knock it back down to the bottom each night.

    Between The Devil and the Green New Deal

    Reply
    1. Susan the other`

      Generate growth and reduce emissions. Start by replacing industrial jobs with at-home jobs. Eliminate commuting; replace it with delivery. Require community and neighborhood gardens. Recycling. Doctors doing house calls. If we radically and abruptly change our lifestyles, with adequate provisions and communication, we can stop the worst abuses of CO2 almost immediately. That’s very important. It should be the first step. After that basic change a new structure will emerge upon which to build a functioning society; local efficiencies, etc. It is silly to say “generate growth and reduce emissions” because it is completely and intentionally ambiguous.

      Reply
      1. Susan the other`

        And I wondered tonight if the atmosphere is thinning, because as I drove home traveling south the sun was setting in the west and it felt extremely hot. We haven’t yet had a “hot” day here at 7000 feet in the Rockies – but the air is thin so it is probably 6s. It was 7:00 pm. That’s pretty late to feel that intense radiation. I used to feel it at around noon. Which leaves me wondering if it is possible for the atmosphere to be thinning?? When it once took a toll on the heat of the sun coming in at such an oblique angle, it now feels like noon. We’ll never hear the story on that one. I’m sure it is devastating.

        Reply
  6. human

    “… OECD countries (a coalition of wealthy countries that work together on common eco-social problems).”

    (/s)

    Reply
  7. Scott1

    Human nature is such that the most progress will depend on war.
    The good good war is the one to eliminate nuclear weapons.
    We require a Government of Governments. It was supposed to be
    the UN. We don’t have time for another UN and must give the UN
    an army of its own.

    This would grow the UN, and its Bank Fund. It is going to be
    permanent war to enforce any ban or severe limiting of nuclear weapons.
    When not at war to enforce limits to nuclear weapons the UN
    made more powerful, would use its new found status & bank to fund
    necessary changes to energy sourcing & uses.

    That economists need to recognize they are not engineers is something
    I have long believed for a full gamut of reasons.
    Our money is modern and that makes it more useful.
    Great leaders do hire the best engineers.
    I think well of Inslee.

    There is a difference between economists & financial engineers.
    Since Clinton Unit 1 the Meyer Lansky Mobster Methods of
    Financial Engineering has been dominate. I wanted Warren Mosler
    for President because Econ War is prevalent and he is both
    an economist of great importance and a Financial Engineer.
    As a flat out engineer his race car and his ferry qualify him there.

    To close here, thanks.

    Reply
    1. Math is Your Friend

      “The Greens have not yet convinced potential voters that there is no conflict between saving the environment and having good jobs, decent income, and high standards of living.”

      Hardly surprising, given that real world experience has a tendency to show that there is a conflict that may well be a fundamental conflict as long as one keeps holding on to a narrow ‘inside the box’ / ‘ignore the cultural and political realities’ approach to the problem.

      The major government attempt here to establish a “Green Economic boom” was a political, financial, and social disaster.

      We finally got rid of that government, but we’ll be decades repairing the economic and social damage, and we’ll be cleaning up the environmental side effects for a while. The mostly foreign companies that partnered with the government took their financial gains and huge subsidies, then shut down the ‘green economy’ plants and companies when they couldn’t soak the taxpayers for any more huge dividends, while some of their local accomplices are still being paid an order of magnitude more than other power sources while costing taxpayers more than a billion dollars a year in subsidy driven losses.

      It would probably take a book to lay out all the things that governments get wrong while trying to legislate economic and social Utopia… I will just note that after years and decades, and sometimes centuries, of government meddling and ‘fixes’, we are, oddly, not living in Utopia. Go figure.

      We need better solutions, and these people are not finding them.

      Reply
  8. shinola

    Addressing the question posed in the title of this article:

    Depends on who’s providing the funding for their studies/analysis.

    Reply
  9. Frank Dean

    Paragraphs like this one make me despair regarding MMT:

    Finally, most models assume that to finance the needed investments so as to have higher welfare in future, we must restrain our consumption today and raise savings. This logic is powerful. It appeals to the Calvinist notion of delayed gratification, which, according to Max Weber, was crucial to the Protestant Ethic and the rise of entrepreneurial capitalism. But it is wrong. Our economies are “monetary economies” in which commercial banks can create new money to finance investment and we don’t need to raise savings first. This means there is no trade-off between consumption now versus consumption in the future, as erroneously assumed in climate economics.

    The fact that commercial banks can create money to finance investment does not imply that investment doesn’t require labour and resources. Yes, labour might be unemployed and otherwise wasted. But the energy and raw materials used now are not available in the future. There is a trade-off. Many MMT economists are perfectly well aware of this.

    On the discount rate, he doesn’t go nearly far enough. There is really no justification for society to discount future measures of welfare at all. Yes, on an individual basis we’re going to die, so a payoff a century from now doesn’t mean much to us, but as a society much more patience makes a lot more sense.

    Reply
  10. Jon Claerbout

    Carbon dioxide benefits agriculture because it is plant food. Please do a web search for “NASA global greening”. Observations and theory are clear that polar regions are most affected. The dominant greenhouse gas is water. In the Arctic and on mountaintops the water lies on the ground as snow. There the secondary gas, carbon dioxide, is dominant. Farmers in Canada, northern USA, Europe, and Russia are delighted. View NASA images. CO2 is a benefit to hungry humans. Skeptical? See youtube science reports of noted scientists Patrick Moore, Matt Ridley, and Freeman Dyson.

    Reply

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