Guest essay by Eric Worrall
“You look at where California is now going, the federal government needs to get there.” – radical greens are rushing to offer their guidance to Joe Biden on climate policy. But the immediate risk facing the US people is not climate change. The greatest near term risk is an abrupt structural economic adjustment, in which even people who keep their jobs lose an estimated 30% or more of their spending power.
A Biden victory positions America for a 180-degree turn on climate change
New administration will seek to shift U.S. off fossil fuels and expand public lands protections, but face serious opposition from Senate GOP.
By Juliet Eilperin, Dino Grandoni and Darryl Fears
November 8, 2020 at 3:22 a.m. GMT+10Joe Biden, the projected winner of the presidency, will move to restore dozens of environmental safeguards President Trump abolished and launch the boldest climate change plan of any president in history. While some of Biden’s most sweeping programs will encounter stiff resistance from Senate Republicans and conservative attorneys general, the United States is poised to make a 180-degree turn on climate change and conservation policy.
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Biden has vowed to eliminate carbon emissions from the electric sector by 2035 and spend $2 trillion on investments ranging from weatherizing homes to developing a nationwide network of charging stations for electric vehicles. That massive investment plan stands a chance only if his party wins two Senate runoff races in Georgia in January; otherwise, he would have to rely on a combination of executive actions and more-modest congressional deals to advance his agenda.
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League of Conservation Voters President Gene Karpinski pointed to California — which has already adopted a low-carbon fuels standard and requirement that half its electricity come from carbon-free sources within five years — as a model. “You look at where California is now going, the federal government needs to get there.“
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“It’s really important to remember that personnel is policy,” said Tom Steyer, a billionaire environmentalist who ran against Biden during the primary but who then raised money for him. “And every Cabinet position has to be staffed by somebody who has an awareness about climate.”
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Read more: https://www.washingtonpost.com/climate-environment/2020/11/07/biden-climate-change-monuments/
The Congressional Budget Office estimates national debt will hit 98.2% GDP this year, and will blow through 100% next year. On its current trajectory, the CBO estimates national debt will hit $25.657 trillion by 2024, 107% of GDP.
100% GDP debt is bad. The European experience suggests 130% gets really bad. Greece entered the 2009 Global Financial Crisis with 130% debt, a debt which rapidly ballooned. Since then, although Greece has enjoyed a few years of anaemic growth, investors have shied away from Greece, because of a persistent credit shortage caused by investor concern over high public debt.
How close is the USA to 130% debt to GDP? The answer is too close for comfort. After deducting borrowing which will occur anyway, to service baked in government deficits, the next US President has room to borrow around $5 trillion, before US national debt hits 130% of GDP.
Biden seems to be well aware of the $5 trillion limit – Biden claims his green revolution will cost $5 trillion. If Biden had costed his plan at more than $5 trillion, his plan to push US national debt beyond 130% of GDP would have attracted a lot of negative comments from US economists.
How does the USA solve its debt problem? Cheap energy and a return of manufacturing to the USA could have cut the baked in deficit, by stemming the ongoing haemorrhage of cash to foreign trading partners.
President Trump’s support for the shale revolution cut the US trade deficit to two thirds of what it would have been without shale. Returning manufacturing jobs to the USA could finish the job, by reversing the structural trade deficit, eliminating a significant underlying reason US public debt keeps rising.
The other option is for the USA to become a leader in a valuable new technology. The post WW2 US public debt crisis was resolved by the post war manufacturing boom; the USA leveraged new technology, the USA’s newly developed manufacturing skills, to grow the economy out of the wartime debt trap.
If the USA found a way to say make renewable energy work, and created an energy system which was cheaper than existing technology, the world would flock to buy a piece of US knowhow.
But there are good reasons to think this isn’t possible. Solar panels and wind are already close to theoretical efficiency. Squeezing a few percent additional efficiency is not going to significantly tip the balance in favour of renewables.
And nothing can solve the horrendous capital cost of collecting diffuse, low density renewable energy.
The Limits of Clean Energy
If the world isn’t careful, renewable energy could become as destructive as fossil fuels.BY JASON HICKEL | SEPTEMBER 6, 2019, 8:51 AM
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We need a rapid transition to renewables, yes—but scientists warn that we can’t keep growing energy use at existing rates. No energy is innocent. The only truly clean energy is less energy.
In 2017, the World Bank released a little-noticed report that offered the first comprehensive look at this question. It models the increase in material extraction that would be required to build enough solar and wind utilities to produce an annual output of about 7 terawatts of electricity by 2050. That’s enough to power roughly half of the global economy. By doubling the World Bank figures, we can estimate what it will take to get all the way to zero emissions—and the results are staggering: 34 million metric tons of copper, 40 million tons of lead, 50 million tons of zinc, 162 million tons of aluminum, and no less than 4.8 billion tons of iron.
In some cases, the transition to renewables will require a massive increase over existing levels of extraction. For neodymium — an essential element in wind turbines — extraction will need to rise by nearly 35 percent over current levels. Higher-end estimates reported by the World Bank suggest it could double.
The same is true of silver, which is critical to solar panels. Silver extraction will go up 38 percent and perhaps as much as 105 percent. Demand for indium, also essential to solar technology, will more than triple and could end up skyrocketing by 920 percent.
And then there are all the batteries we’re going to need for power storage. To keep energy flowing when the sun isn’t shining and the wind isn’t blowing will require enormous batteries at the grid level. This means 40 million tons of lithium—an eye-watering 2,700 percent increase over current levels of extraction.
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Read more: https://foreignpolicy.com/2019/09/06/the-path-to-clean-energy-will-be-very-dirty-climate-change-renewables/
The USA can survive four years of Biden. Even a USA at 130% of debt to GDP can recover, if the President you elect in 2024 is an economic literate. But the opportunity to address deep structural US economic problems without severe economic hardship for ordinary people is closing fast.
A continuance of Trump’s cheap energy manufacturing boom might have worked, though even this was not a guaranteed escape from the looming US debt trap.
The alternative, if the US government fails to address underlying economic problems, is the US government could lose control of the situation. If the USA runs out of money and creditors pull out, a painful structural economic adjustment could occur, in which ordinary people abruptly lose an estimated 30% or more of their spending power.
US government borrowing has held back the looming structural adjustment for at least 20 years, but the US government cannot defy the laws of market economics forever. There is a narrow window of opportunity to fix the problem without severe economic pain. Renewable energy is unlikely to be part of the solution.
History teaches us that even the world’s great powers eventually hit their credit limit. The road to ruin is paved with seductive but ultimately unsustainable opportunities for short term relief, like the US government’s frantic government borrowing to hold back a painful economic contraction. The other old standby is running the printing presses, to try to fill a growing hole in public finances and inflate away the debt, but we all know how that ends. Collapse is not inevitable, but if a collapse occurs it will be sudden.
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One thing’s for sure – we have not yet reached “peak stupidity” but will surely advance a long long way in that direction under Slow Joe!
Well worth seeing! Vote rigging ,how to spot telltale signs. From the bbc !!!!!!!
https://www.bbc.com/news/world-Africa 37243190 dated 2sept 2016.
It’s the US a election to a tee.
Tell me, are they still cutting down trees to print that rag?
The problem is the climate does not care who is President of the US. The Climate is influenced by the President exactly as much as it is influenced by me. Not measurable.
Just stick a solar cell on it strong enough to power the ATM or cash register!
If that’s not enough, put a little windmill in it that the consumer only needs to blow on the part sticking out.
MODS
Accidental repeated comment of
https://wattsupwiththat.com/2020/11/07/washington-post-a-biden-victory-positions-america-for-a-180-degree-turn-on-climate-change/#comment-3121248.
Feel free to delete this one.
The reason Greece was in strife is because they gave away their authority to issue money. Government debt in the currency they issue is not a problem. It just means there is a lot of money held privately or by other countries.
When interest rates go negative, debt becomes a money earner. Denmark already has negative interests rates. Banks are willing to pay people interest if they take their money for a house mortgage. Japan has negative interest rates but I do not know if banks are offering money for people to take out loans.
Interest is simply a measure of people’s propensity to spend. Old people do not spend much. Most old people have savings that they rely on for living expenses. Negative interest rates are a fact of life for ageing populations.
Basically people are willing to pay banks to look after their wealth rather than keeping it in their mattress or in a hole in the back yard.
I had a friend who could not grasp the concept of negative interest rates until I pointed out his exposure if he backed his Beemer up to the local bank and started stuffing millions into the trunk. For a starter he would have to arrange the bank to have that much cash available. Then the authorities would be awfully suspicious of what he planned to do with the cash. He would need to be very careful that no one saw what he was doing because he would be a soft target. He eventually agreed that he would be prepared to pay the bank a small fee to keep account of his wealth and keep it safe.
“Cheap energy and a return of manufacturing to the USA could have cut the baked in deficit, by stemming the ongoing haemorrhage of cash to foreign trading partners.”
No. There is no trade deficit. Dollars out have to equal dollars in unless someone is burning dollar bills. There is no hemorrhage of cash to foreign trading partners. This is one of the most basic Econ 101 principles. Read Henry Hazlitt’s “Economics in One Lesson”.
“You look at where California is now going, the federal government needs to get there.”
Ominous words indeed.
Only in the USA would you find people who would vote for some doddery old chap who has TWICE had brain surgery. America soiled itself today
Can someone point me to the unbiased details about the Paris Global warming agreement. How much will it cost the US? Who will get the money. What will the US have to really do? What will China have to do and by what year?
Will fracking be effected? Will our Nat Gas production be effected? Will the US be more dependent on other countries for key raw materials? What will be the cost of recycling used renewable energy sources?
Is it possible to get all the FACTS published so the people can make good Lomg term decisions?
I appreciate further info on the above. Ultimately I think it would be useful for discussion to have the pros and cons in some concise but factual articles
Richard