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Jay Inslee, the governor of Washington, threw his hat into the 2020 Democratic Presidential Primary race last week. The centerpiece of Inslee’s campaign is to make “defeating” climate change America’s number one priority.
Billionaire Michael Bloomberg announced this week he was launching a new campaign called Beyond Carbon, that seeks to move America toward a 100% clean energy economy.
Alexadria Ocasio-Cortez (AOC), the up and coming socialist congresswoman from New York has proposed a Green New Deal that also seeks to move America to 100% clean and renewable energy.
With many of the presidential candidates increasingly focused on climate change legislation, now is the time to start thinking about the impact of those polices.
Would climate change legislation really be as bad as some make it sound? Well yes if you are a climate change skeptic, and yes even if you aren’t a skeptic.
The proposed solutions are almost always expensive and overly reliant on the government picking winners and losers.
AOC’s Green New Deal, for example, is expected to cost between $53-$93 trillion according to the American Action Forum. Yes, trillion. And yes, on GDP of only $21 trillion.
Where is America supposed to come up with $93 trillion for the Green New Deal? Much higher taxes on income and wealth for starters, but that only makes a small dent.
Cue Jay Powell say AOC & Company. Yup, the Democratic Socialists propose we simply print the money to pay for the Green New Deal.
How cute!
But even a more realistic climate policy has major problems. Germany’s experience with renewable-energy highlights the folly and unintended consequences of a government mandated energy policy.
In 2000, the German government voted to phase out nuclear power. To prevent coal from taking market share, the government also passed a renewable-energy support policy.
Even though Germany only produces about 2% of the world’s carbon, the German government moved forward with massive subsides of solar, wind, wood, and other renewables.
Today, thanks to those subsides, Germany generates about 35% of its power from renewables, but the cost of German electricity is now among the most expensive in the world. Germans pay about 3.5X as much as Americans do. Your $100 electric bill would be closer to $350 in Germany. Talk about jamming it to the working poor.
Surely though, Germany has reaped some environmental benefits in return for stiffing its citizens with expensive electricity?
Despite the enormous cost of the shift to renewables, German greenhouse gas emissions haven’t declined in almost a decade.
Is there any doubt that a Green New Deal in the U.S. wouldn’t create a similarly expensive and ineffective policy with unintended consequences that are many and varied?
