Saving The Economic Recovery From The Greens

  • Date: 20/04/20
  • John O'Sullivan, The Pipeline

Sensing a danger that the EU might soften its flagship Green Deal in order to revive European economies, environmental pressure groups have begun to make the case that restoring prosperity comes second to moving to the new green economy.

[ …] Those working on post-pandemic recovery policies have adopted a second aim which greatly complicates any plans to do that. The European Commission, most European governments, notably those led by Angela Merkel and Emmanuel Macron, the United Nations, the Democratic opposition party in the U.S., the Pope, the Davos crowd of morally correct CEOs, and bien-pensant liberal opinion generally supports a  “Green New Deal” of recovery on the back of a massive reduction of carbon emissions which is rather like eating without food or swimming without water.

If my description sounds somewhat over-critical, here is the EU’s own account of what the “European Green Deal” (click on the link) means: “a modern, resource-efficient, and competitive economy where:

* There are no net emissions of greenhouse gases by 2050

* Economic growth is decoupled from resource use

* No person and no place is left behind.

I will treat that last item as a meaningless piety until the EU manages to come up with a financial and currency deal that rescues the economies and unemployed youth of southern Europe left behind by the depredations of the Euro. First things first. On the other hand, I will charitably assume that the first item will not be achieved by “exporting” the EU’s carbon emissions to other parts of the world, mainly Asia, by investing in factories that operate under looser climate rules. As is done now.

That leaves item two. If my charitable assumption is correct, economic growth can only be de-coupled from resource use—to the extent that the economy grows while the carbon-based forms of energy that currently power it are massively cut—by new forms of energy as yet undiscovered or by scientific advances that allow us to use carbon-based energy while eliminating their emissions.

And here the Green New Deal faces a serious problem: Science isn’t Magic. It’s a powerful engine of progress but it doesn’t always deliver exactly what you want when you want it. For instance, most of the new alternative forms of energy currently in use—the so-called “renewables”—are either unreliable (i.e., winds don’t blow on schedule, not all days are sunny) or expensive to produce, commercially risky, and in need of subsidies.

Similarly, technologies that would allow us to “capture” carbon emissions and disperse them harmlessly have yet to be developed. That means not that they will never be developed, but that they might remain bright ideas for a long time and be prohibitively expensive compared to existing energy sources when they eventually come online.

And those caveats apply to other new technology “fixes” on which the Green New Deal implicitly relies. They explain too why the deal is so heavy on vague uplift and social justice rhetoric in its “roadmap to actions” section: “supporting industry to innovate,” for instance, and” “turning the political commitment [to making Europe climate-neutral by 2050] into a legal obligation.” Its rhetoric can’t be matched by its proposed actions.

What becomes crystal clear is that, barring some huge technological miracles, the only way that Europe can grow without net emissions of greenhouse gases by 2050 is by diverting the whole of any economic growth away from increasing the living standards of its peoples into transforming its economy along puritan green lines. Even then it will find it hard, probably impossible, to avoid actually depressing such living standards by a considerable amount.

In short, Greenery can’t rely on science to deliver the goods for it.

That, of course, is exactly how the Soviet Union destroyed itself. It diverted the proceeds of production (and of massive borrowing from abroad) from consumer living standards to investment in military technology, thus becoming as someone said: “Upper Volta with nuclear weapons.”

EU leaders can’t admit any of this, and they may well feel that—in response to pressure from their own Green parties (with whom some are in coalition)—they have gone much too far in promising this transformation. President Macron’s fierce threats to place sanctions on countries that don’t join the Paris Green accords would suggest so. It’s a classic attempt to get other countries to assume the burdens that would otherwise cripple France in competition with them.

Nations have sometimes made commitments they have no intention of fulfilling for a quiet life diplomatically. But repeated commitments create a general political atmosphere in which retreating from them looks like cowardice, bad faith, and even cynical duplicity. The existence and growing political clout of extreme Green parties and NGOs make that doubly difficult. Those movements have no qualms about adopting policies that will bring about a severe drop in the standard of living of countries, including their own, that they feel are looting the world’s resources. In fact it’s their policy is to bring about such a change—and in particular to use the transition from the recessions caused by the pandemic not to restore the living standards of 2019 but to foster a humbler, poorer, greener Western world.

In the last week, sensing a danger that the EU would begin to soften its flagship Green cause in order to revive European economies, environmental pressure groups have begun to make the case that restoring prosperity comes second to moving to the new green economy—and, more honestly and ruthlessly, to propose that some industries either shouldn’t return at all or at the very least should return in a shrunken form.

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