Forcing an acceleration of Green Energy policies will march the world into heightened trade wars and confused market signals.
January 30, 2023
By: Bobby Casey, Managing Director GWP
Mandating or prohibiting something by declaration only creates criminals out of thin air and stifles progress. Demonstrating that one thing works better than another thing gets people to reconsider their choices.
When we deny people the right to succeed or fail, our marketplace of ideas become distorted. No one knows what is right or wrong, good or bad, good or better. Our signals are crossed and the path forward is unclear.
When officials both elected and unelected throttled information about how to manage Covid-19, and we had people believing standing up in a restaurant was a higher risk activity than sitting in one. In the meantime, people like Joe Rogan were being dragged on national television as snake oil salesmen for resorting to Ivermectin. Teams of doctors were discredited for suggesting a regimen of HCQ might serve as prophylaxis for contracting the virus.
These sorts of massive scaled failures bring into question whether their approach to problem solving… or even accurately identifying a problem… has any merit. Public trust in many countries is plummeting, and for good reason.
The latest is Net Zero or Green Energy. Many first world countries outsource their carbon emitting manufacturing to countries like China and India. It’s like a child moving food around on the plate to make it look like they’ve eaten more of their veggies than they actually have, though.
If my country has X level of carbon emissions, and I send 50% of X offshore to be produced elsewhere, my country can say it’s reduced its carbon emissions by 50%. What they don’t tell you is how that math works. It winds up being done cheaper offshore, in a country with less ecological regulations. So if consumption in my country stays the same, the net output of would actually go UP since my country is more energy efficient than where it sent its manufacturing to.
I don’t much care who is responsible for the labor. If you can get it cheaper, fine. But it’s a shell game on the ecological front. When the supply chain issues started to surface and then became untenable, many countries like England and the US started bringing back those manufacturing jobs to the US. If it’s cost or logistically prohibitive, the only solution is to do it yourself, right?
The Green Agenda people have decided, no. The jobs their countrymen can have are “Green Collar” jobs. Okay, but that still doesn’t answer the question of the goods your countrymen consume that are deliberately sent abroad to avoid accountability for the carbon emissions they generate in manufacturing.
The amount of energy and trace minerals it takes to make the turbines and solar panels is a major blind spot for these people.
I have no problem with jobs cycling out to into obsolescence. It happens. The cashier is going the way of the dodo, as is the bank teller. And that’s fine. Those jobs will be replaced by machines, which will unto themselves generate new jobs that never existed before. That’s what advancement looks like.
But to say we are ecologically advancing, but shuffling the emissions to other places around the world that are more lenient, is a bold faced lie. That’s not advancement. Advancement is when you can bring that job home because you have a better more ecological (and economical) way to meet demand. Developed countries don’t have that yet.
It’s like a policy that “identifies” as a solution, but in reality is nothing of the sort.
The latest brouhaha, is over incentive distortions in the Green Economy. We knew this was going to happen sooner or later. Just within the US alone, if you took away all the federal and state incentives to get an electric car and solar panels, you wouldn’t see nearly as many of them. It took a good amount of government incentives to make it worthwhile for people to bother with either of them.
In fact, it’s become part of their marketing pitch where people plug in their residential information to find out what sort of government subsidy they qualify for.
The incentives have gotten out of hand, however. Much like how Ireland’s low corporate tax regime was scolded by the rest of the EU for being “too competitive”, so too is the US being admonished for their excessive Green Incentives.
So we are entering another era of problematic trade wars complete with tariffs and subsidies.
As of December 2021, this was the Green subsidies globally and more specifically in the US:
Approved government spending on clean energy reached USD 480 billion. The USD 45 billion allocated to renewables – including electricity, heat and fuels (biofuels, advanced biofuels and biogas) – accounted for about 9% of announced public spending on clean energy.
President Joe Biden’s Inflation Reduction Act has a lot of Green Subsidies baked into it, which has created a rift… not only among other countries but even within the US itself. And it’s no wonder why, as many countries would struggle to keep up with good ole ‘Merican corporatism:
The Inflation Reduction Act includes $369 billion in incentives and funding for clean energy, mostly via tax credits for projects ranging from solar farms to battery manufacturing to facilities that remove climate-warming carbon dioxide from the air.
Global renewable-energy manufacturers and developers have announced tens of billions of dollars in new U.S. investments in the past half year alone, with many saying the subsidies spurred their decisions.
The EU will definitely have a difficult time competing for these investments as they are notorious for their bureaucratic red tape and there is the enormous elephant in the room of their high energy costs which is all but de-industrializing their federation.
Not only is this problematic for other countries such as those in the EU, it’s an interesting turnover to Red states within the US. Passing the Inflation Reduction Act was supposed to be some flagship piece of legislation that defined the Biden administration. The irony is, all the businesses are taking the federal subsidies and combining that with the low to zero tax regimes offered in Red states and heading there.
It makes me think of that tag group in Facebook: So, the comments section didn’t go the way you planned. The Blue administration misfired all his subsidies to Red states; and anti-subsidy Red States are now the gleeful beneficiaries of subsidies…
Meanwhile, you have the self-righteous nations that can’t compete with the US subsidies angry about the tax incentives offered to Green Energy… brought to you by none other than the president who introduced and demanded a flat 15% corporate tax across all countries so no country could compete on the corporate tax level.
Does that sound ridiculous? Good. It is.
Look, humanity has come a LONG way technologically. We’ve made profound leaps in a very short period of time. We have plumbing for goodness sake! What were once major operations, are now laparoscopic. We have cars that get 25+ miles to the gallon of unleaded fuel. We have digitized many things to eliminate the waste of paper and storage space. And we’ve done all this while elevating the quality of life for many in the developed and developing world.
Governments tend to ban what we want and mandate what we aren’t ready for. It’s sending a mixed signal of what is right for the moment. Accelerating aspirations before the ideas are fully baked will lead to low acceptance and low trust. Competing on who can bribe us into propulsion to Net Zero is not how good innovations come into market.
This affects the world. Every government will be structuring their tax, regulation, and welfare regimes to race to the bottom on this. This sort of contrived “change” over evolution from competitive improvement will not yield the kind of indelible elevation these grifters say it will. How can it? It’s being propped up by debt.
I believe we can improve our production in an economic and ecologically friendly way. But let the economics of it drive this. Government throwing money and laws at stuff is a new problem masquerading as a solution to a problem that is really mischaracterized.
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