Friday, May 1, 2009

Green Policy Fantasy

Czech President Vaclav Klaus once again proves that he is the voice of reason amoung western statesmen. Here is his op-ed: Green policies = economic decline
So I am amazed to see people going along with the currently fashionable political argument that policies like cap-and-trade, government mandates, and subsidies for renewable energy can actually benefit an economy. It is claimed that government, working together with business, will create "a new energy economy," that the businesses involved will profit, and that everyone will be better off.

This is a fantasy. Cap-and-trade can only work by raising energy prices. Consumers who are forced to pay higher prices for energy will have less money to spend on other things. While the individual companies that provide the higher-priced "green" energy might do well, the net economic effect will be negative.
Exactly. I would have a lot more respect for environmentalists who will come out and say: "It will hurt growth, but that is the price we have to pay." Fair enough. Then we can decide if we want to make that trade off. But please don't say it will create more growth and make the economy better. If it did, then nobody would oppose it. Lying to advance your argument will not work and is ruinous to your credibility.

Hat tip: Pat

1 comment:

  1. Keep your eye open for this guys material, he is great. He is not only pro capitalism, but has lived through communism. He knows exactly what big government can do to an economy, from first hand knowledge. I wish people like Jack Layton, would go and visit North Korea. I lived through the Bob Rae years, and after words, even Bob Rae gave up on socialism.