Friday, March 27, 2009

No conflict between ecology and economy

The world does not need another blog, and I do not have time to write one. Nonetheless, I was a bit frustrated a few days ago to read something in the New Yorker (one of the best publications in English incidentally) with uninformed ideas about energy policy, so I wrote to the author. I got no response and decided that if I'm going to waste my time writing letters to the editor, I might as well put this stuff online. If nothing else, it might be read by passers-by.

Mr Owen's article contains quite a bit of outdated thinking. He writes: "the world’s principal source of man-made greenhouse gases has always been prosperity." I thought greenhouse gases emissions came from our consumption of fossil fuels, not prosperity. While prosperity has historically gone hand-in-hand with fossil fuel consumption, there is no direct parallel: France relies very heavily on nuclear power and has much lower greenhouse gas emissions than, say, the UK, though prosperity is roughly equal. Looking forward, a switch to renewable energy will be necessary to maintain prosperity as a fossil fuels become scarce/expensive and will, as a pleasant side effect, reduce greenhouse gas emissions.

Furthermore, Mr Owen asks this question without giving us an answer, even though other countries tell us the answer: "How do we persuade people to drive less—an environmental necessity—while also encouraging them to revive our staggering economy by buying new cars?" Germany managed to do just this by incrementally raising the tax on gasoline over a period of five years. As Mister Owen and others have pointed out, raising fuel standards only lowers demand, which in turn lowers prices, which in turn makes it cheaper for people to drive more. So do it the other way around: raise the price of gas and let people figure out how they want to react: by switching to more efficient cars or using other modes of transport.

Finally, "green jobs" is not a zero-sum game. In Germany, the nuclear sector makes up almost as much of the country's energy supply as all renewables together, but 280,000 people are employed in the renewables sector compared to only around 7,000 in the nuclear sector. More importantly, the oil jobs that Mr Owen fears will be replaced are not all domestic. The macroeconomic benefit of replacing oil imports with domestic green jobs is one of the best selling points for renewables.

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