Green growth

Sean and I have an article on green growth at Vox. It builds on a paper recently published in the Energy Journal. Research funded by the EPA.

40 replies on “Green growth”

“High energy taxes spur investment, we presume in primarily in energy-saving equipment. The average effect is positive. Overall, higher energy taxes spur investment in Europe.”

I don’t know, perhaps what we might need in a recession?

Sure aluminium smelting only happens here because of tax policey , using NG for such a energy intensive activity is not rational if we lived in a world without national gaming – with Iceland’s excess geothermal being a more rational alternative.
Although its not a perfect anology I prefer to think of countries with a certain energy ration based chiefly on the vagaries of geopolitics – sure we cannot tax foreign trade movements as the various churches have cornered that sphere of life but certain activities are captured.

Transport is perhaps the best example – ok we exclusively purchase foregin vehicles but their use is dictated by our tax policey / built envoirment / external costs such as raw material costs etc etc.

Also why does the economics discipline wish to increase our employment ? , it should be concerned with the creation of wealth – service employment will spring from that source.

When we were running around chasing deer we strived to reduce our workload by creating technology and new tactics – what has changed in the course of human existence ? , do we all wish to be galley slaves again ?

PS Toll
I urge you to look into this tram – train concept in the town of Valenciennes.
http://www.trams-in-france.net/valenciennes.htm

The place has been gutted by industrial decay and exhibits similar population distribution & density to Irish urban / suburban areas unlike many other more compact French towns.
Although looking at Google earth the ancient train lines it uses to Denain and under new construction toward Vieux Conde are more or less intact displaying forward planning conservatism unheard of in Ireland.

“High energy taxes spur investment”

Any data to backup that statement? what about companies leaving elsewhere due to high energy costs

my own company moved all equipment and servers to US and France, beside better network electricity is much cheaper, leading to job creation/support in those countries and loss here

Also why does the economics discipline wish to increase our employment ? , it should be concerned with the creation of wealth – service employment will spring from that source.

I don’t think most particularly do wish to increase employment, except as a rhetorical device (full employment might lead to the plebs demanding better conditions – sorry, “decreased flexibility”).

@EWI
Most of todays western employment problems stems from a gigantic slave wage arbitrage system that is now grossly unsustainable.

Even SuperMario alluded to the potential breakdown of the modern slave trade in his first ECB press conference given its inherent contradictions.

The fact is this transcontinental trade is now just too energy intensive with too much Bunker fuel lost in the great expanses of the Pacific & Atlantic.

This could be good news for depressed former industrial centres such as Valenciennes but not so good for Financial capitals who shave the now smaller & smaller surplus from this depressing long distance arbitrage.

Efforts by the financial elite to shore up Italy for example is simply attempting to bolt up the present slave based system and is preventing the likes of Turin from making Fiat 500s again. (they are made in Poland now)
New York like other financial centres will again use their local hinterland again (Buffalo NY)
From wiki if you care to believe it……
“The loss of traditional jobs in manufacturing, rapid suburbanization and high costs of labor have led to economic decline, making Buffalo one of the poorest amongst U.S. cities with populations of more than 250,000 people. An estimated 28.7-29.9% of Buffalo residents live below the poverty line, behind either only Detroit,[80] or only Detroit and Cleveland.[81] Buffalo’s median household income of $27,850 is third-lowest among large cities, behind only Miami and Cleveland; however the median household income for the metropolitan area is $57,000.”

“The loss of traditional jobs in manufacturing, rapid suburbanization and high costs of labor have led to economic decline […]”

I don’t have a hard time believing this at all. The decline of actual economic activity in favour of what a number of people have termed the Great Casino (the banking/financial industry) should worry any economist concerned with the real world – a small subset, I know.

@ EIS

Any data to backup that statement? what about companies leaving elsewhere due to high energy costs

I believe Mr. Tol states it in his paper, so you’ll need to direct any inquiries to that quarter. And “companies leaving elsewhere” has a number of easy solutions.

By the way, Richard Tol; you have claimed that mentioning the recent endorsement of the global warming work done by CRU etc. is off-topic to this blog.

This does not at all match with your track record of running here to repeatedly cast doubt on the warming record:

http://www.irisheconomy.ie/index.php/2009/11/23/crugate/

http://www.irisheconomy.ie/index.php/2009/12/07/climategate/

http://www.irisheconomy.ie/index.php/2010/01/17/more-trouble-in-climate-land/

http://www.irisheconomy.ie/index.php/2010/01/27/ipcc-reform-now/

http://www.irisheconomy.ie/index.php/2010/05/20/climategate-ctd/

I see also that despite four independent inquiries clearing CRU, you have never seen fit to note that here.

“And ‘companies leaving elsewhere; has a number of easy solutions.”

@EWI

I prefer the communist solution to {capital/people/companies} moving out, the best, build a big frigging wall around the state man it with dogs and machine guns and shoot anyone trying to escape, I heard it worked wonders in East Berlin and N Korea 😀

“Green Growth” That would be photosynthesis then?

It would be useful if we had a Mark Twain type around to rubbish this sort of guff. Its nauseating stuff. Modern economies need copious quantities of real energy – like coal, and oil and gas. Electricity is a transformed form of energy. You lose quite a bit of energy in going from one to ‘tother. Absent that coal, oil or gas, our economies are dead meat. You can PR spin it anyway you want, and fool most of the folk most of the time (as well as mugging them tax-wise for subbies). But Nature sure is not fooled.

If every soul on this planet got the same amount of liquid fuel each day, it comes out at approx 3 litres each. When was the last time anyone in Ireland lived on 3 l a day? The 1930s? Someone had better get real, real quick! Or are we in the Advent of an Easter Island extinction event?

@EWI: Thems be very attractive smokestacks, thems be! Lovely symmetry.

Brian.

Jokes aside

I have spent some time working for a certain generator in this state in the past and quite interested on subject of energy.

I am highly sceptical of anything prefixed with a “green” nowadays, as far as I can see the current obsession with wind generation in this country despite billions spend and subsidies paid by all of us has not translated into more jobs or for that matter cheaper electricity 🙁

From personal experience “green” if anything is leading to job losses.

But hey not like and obsession with an industry and subsidies of it have not caused any issues in this country before, no no the construction bubble also promised us loads of jobs and for a time seemed to have been delivering until the whole thing was exposed for a pile of manure that it was.
Fool us once? fool us twice??

The accounting system we use is simply flawed.
New York is one of the most wealthy if not thee most wealthy cities on the planet yet Buffalo NY is now a dump – before it was at the hub of industrial innovation.
There must be a massive loss of wealth in the financial ether from this Industrial outsourcing.
Indeed from a holistic viewpoint it does not make any sense and is a complete rejection of the city / hinterland geographic models of the late 19th and early 20 th century.

But it simply is finance agents bypassing local labour to maximise their profits – however with this rational action on their part a huge amount of wealth / energy is wasted.
(under utilisation in NY state and over utilization in Asian sweatshops as even China must import coal to keep up with demand)
What it is on a larger scale is the CB war model turned in on itself as the nation state morphed into the market state.
A truely spectacular freak show of economic inefficiencies.

Ah, so I see that it’s only a particular question to Mr. Tol that gets moderated.

@ Brian Woods Sr

Modern economies need copious quantities of real energy – like coal, and oil and gas.

It’s going to be a relative blink of the eye before “modern economies” will have to do without fossil fuels, one way or another.

@ EIS

Get the taxes EU-wide, and where are they going to go?

@ Pat Swords

Tell me where the ideology isn’t in farmers and the grubby fumblers in tills deciding climate change policy, then.

Tounge-in-cheek, ‘green growth’ requires water, seriously though, the latter might be the reason for military conflicts concerning 2 billion people rather sooner than later.

@EIS: “Fool us once? fool us twice??”

‘They be trying, they be trying!”

@GRB: “Tounge-in-cheek, ‘green growth’ requires water, seriously”

Your seriously on the button there! Funny how folk who have a natural abundance of the stuff forget what’s in 99.9% of that cuppa! And mores to the point, how it arrived in their kitchen.

@EIS again: Note your interest in the energy thingie. I’m not an engineer or physicist, but I have a nose for thermodynamics and suchlike. Also I have a bad hunch about the availability (readily accessible, that is) of many of the essential ingredients to build-out the type of ‘green’ (God help us, its an utterly useless term) enenergy infrastructure that might have ‘saved’ us. Methinks it too late in the day. We need (sic) to engage in a real energy reduction and conservation campaign, about a decade back!

Cheers.

Brian

Brian what we need is latest generation nuclear, follow the lead of France and Finland, with Moneypoint gone in about 10 years now would be good time to plan replacement for the base load that this huge dirty coal burning plant provides. Having 1-2GW of reliable, predictable and cheap power (that provides “smart” jobs) as part of the energy mix replacing coal/turf is where we should be aiming

All that radon that causes so much trouble in this country is a natural decay product of of uranium and thorium, we could be quite literally sitting on top of a goldmine in this country (if not for use then for at least exports) but a certain Green Eamon Ryan banned all exploration and extraction of these 2 back in 2007…

@EWI

“Get the taxes EU-wide, and where are they going to go?”

Erm outside the EU! Some of our servers are already in US (cheap electricity, great networks), 80% of all users of our services are outside the EU and large chunk in Middle East of all places with a growing population and middle class, when I tell people we make money from customers in Egypt they scratch their heads and say “aint they all poor there”!

We already have to pay 21% VAT on all sales to EU residents 🙁 making it very hard to compete with companies in China, India, US etc

At the rate europe is going its going to be a pimple on the side of the growing global economy, pricing yourself out of more markets for the sake of being “green” would lead to more job losses, if you told me 5 years ago when started out as small company that would be making so much money from “emerging” economies would have told you to get of it

@EIS: I am not a great fan of ‘nuclear’ – for all sorts of biological science reasons, … … but!

This does not mean we cannot have a meaningful exchange about it – and not about IT, but about whether our society can manage to merely stand-still as we are to-day, absent some element of ‘nuclear’ as part of our energy mix. I have my opinion, views, beliefs, ideas, as they say. But …???

Fuchishiman. This is what has folk’s underwear in a complete twist. They are simply sh*t scared. Now, you could explain that it is possible to build, maintain and decomission small nuclear power generators, but if folk have only sufficient cognitive processing power to watch the X-Factor, or ****’s Got Talent, or whatever. Attempting to explain nuclear is very bad idea.

I note you somewhat optimistic views about ‘growing global economy’ in a subsequent post. I have a very, very bad hunch about the outcome here. I believe that global economic ‘growth’ will indeed go Ka! (in the short-term). but the Poom! is not too far away. Diminishing Marginal Returns and all that jazz.

I hope your firm is ‘investing’ whatever surplus you are earning in good agri land – here in Ireland, where it cannot be looted by Chinese corporate brigands. One never knows the future. But folk need to eat and drink, and have a roof over their heads.

Brian

Pat do please stop being an ass. You give our profession a bad name.
Lots of people dont accept the independence or balance of research where the sponsor has an interest in the findings.

‘it seems that dirty, smoke-filled growth may well be better for the firm’s workers and their customers.’

This is so counter intuitive it needs clarification. It implies there is no cost for climate change.

@fergaloh

The paper itself suggests that there is a trade-off between current employment and higher long-run investment and productivity. However, that headline does not make climate change look good, so they didn’t choose it.

Complete the following (opening) sentence to any article:

“Politicians around the world like to argue that … ”

And then cooly point out that the opposite is the case.

Throw in “We include a range of other explanatory variables.” and who can argue with that?

Job done.

Hmm, let’s try:

“Politicians around the world like to argue that … jaw, jaw is better than war war.”

But we argue that for economic reasons war, war is better than jaw and erm, jaw.

Because (explanatory variable) a future war will leave only two people and the whole world between them – winner!

Yes, it works.

“It implies there is no cost for climate change.”

That itself is worth commenting on, “climate change is bad”TM (hey whatever happened to global warming, i never got the PR dept memo it seems) because it will lower/raise temperatures globally by X degrees, with some regions more and some less, leading to more extreme weather and so on

To which future Chinese (who else but are authoritarian friends!) geo-engineers (remember Beijing Olympics?) float several pipes on balloons and pump sulphur directly into the atmosphere recreating large volcanic eruption effects (Mount Pinutabo lowering worldwide temperatures for some time) and lower the world wide temperature

The Chinese then proceed business as usual with job creation being their utmost priority (to prevent “dis-harmony” of course) and continue with their mercentalist policies, all while we in the west wasted billions going “green” and of course buying Chinese made wind and solar equipment, or products which require large amounts of rare earths (market cornered by China) and bad to environment and people to produce http://www.dailymail.co.uk/news/article-1241872/EXCLUSIVE-Inside-Chinas-secret-toxic-unobtainium-mine.html

Thats the future we face make no mistake about it

@EIS: ” …the west wasted billions going “green” and of course buying Chinese made wind and solar equipment, …”

Which have sh*tty electronic thingies deliberately used so as to cause the aforementioned equipment to ‘fail’ in short order. Now, you have to buy the spares!!!

Brian

* aka: re-cycled, opps, meant “re-purposed” (PR GUY please note) discarded electronic component material.

@Brian

Your typical 3MW turbine uses 2 tons of neodymium and other rare eaths main for the permanent magnets, take a wild guess where these rare eaths come from (and most likely the actual turbine itself), yep thats right China, who do not give a rats arse about the environment and posioning its people, the same country that is on its way of pumping half of CO2 ever created by 2016.

And thats just wind turbines, battery in a Toyota Prius car contains more than 22lb of lanthanum. Low-energy lightbulbs need terbium, and so on

more here (sub required)
http://www.timesonline.co.uk/tol/news/world/asia/article6946038.ece

@EIS: Thanks for the laugh. Yeah, there used to be a spell-checker. But a Preview would be good too.

Funny how dopey the ‘greenish’ folk can be about ‘sustainable’ technology. Clueless! But full to the brim with ideologically spun-sugar lollipops* (the biggish ones you got at the seaside – in de olde daize!

Brian

aka: Candy Floss!

Richard,

I glanced at the paper but couldn’t immediately see whether you had reduced other taxes to make the climate/energy taxes fiscally neutral.

Chris

It’s a shame that the use of the revenue was not observable. There are models which propose that some uses of the revenue are superior to others, and it would have been instructive to have tested that.

Chris

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