Biden Administration Launches A Great Leap Forward Into Green Energy

From THE MANHATTAN CONTRARIAN

Francis Menton

Probably very few readers here are old enough to remember China’s “Great Leap Forward.” You’d have to be my age (73 – born in 1950), or close to it, to remember the GLF from reading about it at the time. The name “Great Leap Forward” refers to Mao Zedong’s second Five Year Plan, launched in 1958, and intended to catapult China’s economy from backwardness into modernity. This was to be not just any old central planning project, but a whole new approach designed by the really smart people to correct the mistakes and failures that the Soviet Union had encountered on the road to communism. This time, they were going to get central planning right.

Yesterday the Biden Administration launched a significant new climate initiative with a design that has some remarkable resemblances to the Great Leap Forward. Since most readers probably don’t know how the Great Leap Forward worked out, I’ll save that for the end of the post.

The new Biden Administrative initiative is called “Community-Driven Solutions to Cut Climate Pollution Across America.” The press release from the EPA is here. Nick Pope covered the new initiative in this post at the Daily Caller, which was then also re-posted at Watts Up With That here.

This new initiative is just one small piece of the vast economic waste of the falsely-named Inflation Reduction Act, with its multi-trillion dollars of subsidies for uneconomic projects. But the “community-driven” tag line here is what brings the memory of the Great Leap Forward. The basic idea is that the new investments and technologies to transform our energy economy are going to come from federal selection and subsidizing of various projects originating out of state and local governments, otherwise known as “communities.” From the EPA release:

Today, July 22, . . . the U.S. Environmental Protection Agency announced selected recipients of over $4.3 billion in Climate Pollution Reduction Grants to implement community-driven solutions that tackle the climate crisis. . . . The grants will fund projects supporting the deployment of technologies and programs to reduce greenhouse gases and other harmful pollution across the country. . . . Together, these selected projects will implement ambitious climate pollution reduction measures designed by states, Tribes and local governments that will achieve significant cumulative GHG reductions by 2030 and beyond.

Enough of the outmoded idea that the way to an efficient and reliable energy system is through profit-driven businesses competing with each other to find the most cost-effective solutions. The new idea is that local governments, aka “communities,” run the economy, directed and supported by some lavish funding from the feds. Here is the quote from Biden Administration “climate czar” John Podesta:

“President Biden’s Climate Pollution Reduction Grants put local governments in the driver’s seat to develop climate solutions that work for their communities.”

Pope gives some examples of the kinds of projects that will be getting the funding:

The projects include electric vehicle (EV) charging station construction, funds to help local governments expedite green energy siting and programs to enhance heat pump adoption.

The unifying aspect of all of these projects is that they are uneconomic and would never be adopted by the people of their own choice with their own money. Thus there must be coercion through the federal funding and mandates from the local governments.

Compare this vision to China’s Great Leap Forward. A decent short history of the GLF can be found at the Association for Asian Studies here. The basic idea was that communes would be formed, of about 5500 households each, to become the main economic units, then taking direction from above as to what businesses to pursue:

The movement bore [Mao’s] characteristic faith in China’s bucolic masses—now unfettered by skeptical intellectuals—to surmount any obstacles and achieve a Communist utopia through unity, physical labor, and sheer willpower. In this final stage of collectivization, communes formed—each with some 5,500 households. . . .

In classic the central planning way, the businesses selected to be pursued were based on an ideological vision of utopia, rather than economic reality. The trendy thinking of the time was that strong and modern economies produced a lot of steel, so therefore making a lot of steel was proof of success. And thus the best-known example of the GLF’s folly in economic development was that every household was to build its own furnace to make steel:

One of the most infamous innovations of the Great Leap involved an industrial revolution in the countryside, where farmers constructed millions of backyard furnaces and then divided their time between tending crops and smelting steel.

This promptly led to myriad unintended consequences. Examples:

Gathering fuel to stoke all these furnaces resulted in the loss of at least 10 percent of China’s forests. . . . Rather than mining the ore to be smelted, everyone contributed iron implements, including tools, utensils, woks, doorknobs, shovels, window frames, and other everyday items, while children scoured the ground for iron nails and other scraps. . . . [T]he campaign essentially converted practical items into useless lumps of pig iron good only for clogging railroad yards. . . .

And as labor got diverted from productive uses to unproductive, the economy collapsed. It only took about a year:

Starvation became a widespread problem with the harvest of 1959. . . . As food reserves in the countryside diminished, peasants began dying in droves by the summer of 1960. They collapsed in fields, on roadsides, and even at home where family members watched their corpses rot, lacking the energy for burial or even to shoo away flies and rats. . . . Estimates of deaths directly related to the famine range from a minimum of twenty-three million to as many as fifty-five million, although the figure most often cited is thirty million.

Well, the good news is that this latest Biden program is a lousy $4.3 billion — big, but still not much more than a rounding error in the federal budget. The Inflation Reduction Act as a whole — touted as $1.5 trillion, but estimated by many to be more like $2-3 trillion — is not a rounding error. Devoting that kind of money to uneconomic and wealth-destroying projects can have disastrous consequences. I expect that we will escape the fate of China in the 1950s, but we can’t be sure until the climate crazies are defeated.