From the Global Warming Policy Foundation: We are keen to receive review comments for our new report which is now available for open review here.
Jonathan Lesser: Green energy and economic fabulism: The mirage of subsidy-propelled economic growth and employment.
The Inflation Reduction Act (IRA) has expanded the availability of subsidies for green energy, with direct spending estimated to be over $1 trillion the next ten years. In addition to claims that these subsidies will address climate change, a primary justification for this increased spending is the claim that it will increase economic growth and provide millions of new jobs in green industries. The economic reality is far different.
Given rising U.S. deficits, much, if not all, of the tax credits for green energy, especially wind and solar facilities, will be financed with additional debt. The staggering amounts of money available, more than even was spent by the government during the Great Depression, will have long-lasting and adverse consequences on energy supplies, economic growth, and the well-being of the citizenry. The subsidies will further distort energy markets and raise energy prices. The subsidies will crowd out more productive private investment and reduce the resources available for more efficient energy resources, such as nuclear power. As in Europe, the subsidies will result in higher energy prices that will cause economic and job losses throughout the entire economy. These losses will far exceed the gains provided by the subsidies themselves.
Although policy makers may choose to ignore basic economic principles in favor of political expediency and, in some cases, personal gain, those principles will not ignore them. Eventually, the profligate spending on costly, but low-value green energy will collapse under its own economic weight. The unanswered question is how high an economic and social price the U.S. will pay for this folly before that occurs.
Submitted comments and contributions will be subject to a moderation process and will be published, provided they are substantive and not abusive. Open review here.
Review comments should be emailed to: benny.peiser@thegwpf.org
The deadline for review comments is 30 November 2023.
“Eventually, the profligate spending on costly, but low-value green energy will collapse under its own economic weight. The unanswered question is how high an economic and social price the U.S. will pay for this folly before that occurs.”
This says it all.
And in the UK, too, sadly…
POTUS recently approved seven regional hydrogen hubs to receive $7 billion in federal funding but only two plan to use exclusively renewable energy and the other five will use a combination of renewables, nuclear power, and natural gas with carbon capture and storage. When there is money sloshing into the trough its amazing how creative the pigs can be.
The whole hydrogen idea is physically and thermodynamically foolish. I went over all the reasons in essay ‘Hydrogen hype’ in ebook Blowing Smoke. Just shows that Biden and his advisors like Grenholm are ignoramuses.
Unfortunately it is hard to prove that something cannot be invented. Since we are talking about 2050 this uncertainty gives the politicians great leeway to be foolish.
“Jam tomorrow” as an economic policy? Any politician that produces that as a blueprint should not hold office. Planning for tomorrow should be built on what we have available today not wishful thinking of what might be, could be, possibly, maybe available at some unspecified time in the future. ‘Foolish’ is not the term I would use, ‘malfeasance in office’ might be closer.
Rud,
“Blowing Smoke” (I downloaded it today, thanks) is almost 10 years old and much has changed since you wrote it.
Or has it? Some science moves slowly.
Is it time for an update or are your arguments then still valid today?
Ignoramus or sociopathic grifters, laughing all the way to the bank.
The self-described “elite” are raking in the filthy lucre of skimmed tax payer monies, by the truck load. The “Green” companies do go broke, but a large % of the subsidized “investment” is long gone at that point.
No, it is a given!
California curtailment keeps rising: https://www.eia.gov/todayinenergy/detail.php?id=60822
2.4 million megawatt-hours a year now.
UK curtailment very likely to hit all time high in spending, if not amount of electricity curtailed in 2023: https://www.ref.org.uk/constraints/index.php?tab=yr
Note November is usually the single largest curtailment month of the year…
I’ve written before about German and Portugal/Spain curtailment – in the billion euro range – but more importantly these countries’ experience shows that not only does absolute curtailment amounts increase as renewable percentage of overall electricity generated – the relative percentage of renewable electricity curtailed also increases.
All eyes should be on Texas though. Texas curtailed 5% of wind and 9% of solar generation in 2022 and may curtail as much as 13%/wind and 19% solar by 2035: https://www.reuters.com/business/energy/rising-curtailments-texas-magnify-grid-storage-shortfalls-2023-10-19/
Everyone expects IRA subsidies to turbocharge renewable installs onto the Texas grid hence the jump.
Texas solar + wind curtailment in 2022 was 7.5 million MWh = 7.5 Twh. Costs are now grouped under “binding constraints” with 2022 congestion due to binding constraints costs for 2022 being about $5 billion. In 2021 – about 1/2 of congestion was wind, 1/6 was solar and the rest was maintenance, squirrel attacks and so forth. 2022 saw about the same congestion but significantly more wind and solar curtailment.
Much as I agree with the GWPF paper and it’s premises, I dunno how much US impact it will have since originating from a UK organization.
There are perhaps more immediate issues US direct actions.
Biden has obvious cognitive impairment. Comer is showing that while VP he was also very corrupt—3 pseudo email accounts, obvious money laundering from family to him (10% for the big guy was real). Biden policies drained the SPR, directly resulted in Bidenflation, and destroyed the southern border. The auto big three are pulling back from Biden favored EV because they aren’t selling despite subsidies—Ford just deferred $12 billion in EV capex.
Let’s get him voted out in 2024. That means locally fixing the stolen election states. That means a lot more counterpropaganda—Proterra just went under. Oersted just booked a $4 billion impairment charge related to withdrawing from two (in sufficiently subsidized) off shore wind projects in NJ. That means pressing on with court injunctions against government interference in social media (proven by the Twitter files released by Musk).
It’s going to have zero impact as long as the climate-mongering billionaires determine the policies of the democrat party. Most of these money-men, BTW, are making money big-time from these climate policies. They are rent-seekers. They lobby for programs that directly line their pockets with taxpayer dollars. Also known as a racket. Also known as business as usual.
True. But ‘we’ are working on it. Musk bought Twitter and exposed a lot. Yes, he has lost 55% of Twitter (now X) purchase price—so what, he is worth almost $300 billion. And with his future vision, he will make it back multiple times over. PayPal plus dating plus mostly free speech platform.
He called the SF politics infected, government steered, formerly Twitter censorship a globally spread ‘mind virus’. Exactly right. Apt COVID analogy. Vaccine risk now worse than predictably now mutated virus. So Pfizer just took a $8 billion COVID writeoff.
Safe and effective.
https://t.me/thearcangel/73774
https://www.lifesitenews.com/opinion/a-masonic-leader-was-at-vatican-environmental-conference-to-promote-depopulation-world-govt/?utm_source=popular
Oops, wrong link, damn where’s the Edit option!
https://www.lifesitenews.com/news/world-economic-forum-co-founders-son-calls-for-the-arrests-of-covid-jab-pushers-for-democide/?utm_source=digest-world-2023-11-02&utm_medium=email
A story: First there’s this.
Then, there’s this:
Steven DavidsonVice President, Government Affairs
Steven Davidson is Vice President of Government and Public Affairs at Tallgrass. Here, he manages the company’s social and political risk and oversees the Government and Public Affairs. Before joining Tallgrass, he was a member of the Leadership Team at Moda, leading the policy, stakeholder engagement & sustainability functions, including demonstrating the company’s performance in these areas in connection with its $3.2 billion sale to Enbridge in 2021. Prior to that, he developed the award-winning communities & social performance team at Cheniere Energy’s $15 billion Corpus Christi Liquefaction Facility. Steven began his career as a Sergeant in the Army, serving one tour in East Africa for which he was named “Soldier of the Year” by the Army Times. Following his tenure in the military he served at the Department of Energy. Steven has master’s degrees from Johns Hopkins University and the London School of Economics. He received his bachelor’s degree from the University of North Texas. He lives in Texas with his wife, where he serves as a trustee of the state’s aquarium and coaches the University of Houston’s rugby club.
Pretty good if he started as a Sergeant. I thought most started as a Private.
Salute!
One large problem I see with all the green programs being promoted in democracies is an assumption that some capitalist sources of income will finance many of the ill-concieved programs and actual factories and such.
The problem is the geese laying the golden eggs are being starved by taxes and other dictates and are moving away from the so-called wealthy countries. So only way to enforce all the programs and plans to limit carbon dioxide from fossil fuels is damned near a police state as the Soviets attempted for 70 years. You know, central planning and allocated labor by the state toward some area of industry or agriculture or….
Well, Gums, where is the money come from? Answer from studying the Soviet example is the $$$ comes to the proles as coupons or allowances depending upon the state’s idea of your worth. So free education, free housing in crappy apartments, free health care, and the beat goes on. After 70 years, we saw the best example of the grand experiment, and I compare it with the first 70 years of this country in the western hemisphere that embraced a different economic system and different/limited governmental authority over its citizens.
Oh well…..
Gums sends…
It’s Bastiat’s window in $pade$, and the $$ come from Margaret Thatcher’s other people. That’s you.
The biggest issue with these government subsidies, besides the huge debts they create, is that they distort the economic and financial decision-making for energy generation and sources. And they benefit the connected few at the expense of the many.
But what is really damaging are the opportunity costs caused by pushing certain technologies over others, diminishing development of better or more useful and efficient sources, while providing less reliable and higher cost energy.
This is not sustainable, but it benefits the powerful, and there are people who don’t understand science or economics who let themselves be led like sheep to the economic slaughter that will surely ensue.
And the whole green energy merry-go-round breaks down as soon as the subsidies end.
Yes. There was a time, in many Western governments, where it was believed that government shouldn’t be in the business of picking economic winners amongst technological competitors. History shows they are not good at it.
Maybe (maybe) we would have fusion energy by now (or at least much better fission) were it not for government ‘help’ and regulation.
The more general problem is the inverse of “trickle down” economics. Making energy more expensive than it needs to be is “suck up” economics. It makes everything else less productive and more expensive.
Almost everybody gets poorer, except those getting the subsidies.
They will believe any and all scary predictions of what an increase in the atmospheric concentration of a trace gas that is essential to life will have but they will not believe what effect profligate deficit spending not seen since WW2 will have as based on sound empirical evidence.
To me, the major issue is that the supposed rationale for this investment in “green” energy is that these systems will produce CO2 “net zero” emissions. They will not.
Until there are solar silicon, lithium refining, aluminum smelting, steel production, and concrete plants powered by this mythical green energy, what is happening is a huge misdirecton.
Taking abundant coal, ccgt, nuclear and hydro energy to make these green beasts is exactly like buying thousands of AA batteries and using them to charge your Tesla, and then calling it “green,” . Its a magic trick, and not a very well hidden one.
The IRA is a veritable Tower of Brandon; there are countless levels of grift and graft from top to bottom where the pols in Washington, District of Corruption, can join their cronies in feasting at the trough!
How high will it grow before it collapses under its own useless economic worth!? That will depend on how long the population remains asleep in their Green fever dream! The real question should be whether it’s collapse will bring down the Western ruling elites, or the whole world economy with it!
There was a time when the US ( economy and most of the western world) was so far ahead of the rest of the world; that we could absorb the consequences of a lot of bad policy decisions. But what is going on now is at a whole new level. And the rest of world will move on with out us.
so the new speaker Mike Johnson said that any new spending must be paid for with cuts from other areas, like slashing the IRS budget to pay for Israel defense funding – it would certainly seem that cutting these worthless subsidies for intermittent and unreliable “green” energy would be the most obvious option
I applaud the idea of putting the paper out for genuine peer review rather than “pal-review”.