Home > Uncategorized > Combatting global warming and austerity

Combatting global warming and austerity

from Dean Baker

In the United States, proposals for a Green New Deal have been getting considerable attention in recent months as activists have pressed both members of Congress and Democratic presidential candidates to support aggressive measures to combat global warming. There clearly is much more that we can and must do in the immediate future to prevent enormous damage to the planet.

However, major initiatives in the United States to combat global warming will almost certainly require some increases in taxes. There is likely some slack in the U.S. economy (perhaps we’ll see more slack as a result of Donald Trump’s misfires in his trade war), but a major push involving hundreds of billions of dollars of additional annual spending (2-3 percent of GDP) will almost certainly necessitate tax increases. This doesn’t mean we shouldn’t move quickly to take steps to save the planet, but these steps will have some cost.

In contrast, most of Europe is in a situation where it could easily make large commitments toward increased spending on clean energy, mass transit, and conservation at essentially no economic cost. In fact, a Green New Deal Agenda in Europe is likely to lead to increased employment and output. The big difference is that Europe is much further from facing constraints on its economy. It has plenty of room to expand output and employment without seeing inflation become a problem. 

Before getting into the specifics on Europe’s economy, it is important to add a bit of perspective. The European countries have been far better global citizens in this area than the United States. Their per-person emissions are roughly half as much as the United States. Furthermore, many European countries have already taken aggressive measures to promote clean energy and encourage conservation.

Solar energy accounts for 7.3 percent of Italy’s electric power, 7.9 percent of Germany’s and 4.3 percent for the European Union as a whole. By comparison, the United States gets just 2.3 percent of its electric power from solar energy. There is a similar story with wind energy where the European Union’s installed capacity is more than 70 percent higher than the United States.

But in the battle to slow global warming, simply doing better than the United States is not good enough. The European Union can and must do more to reduce its greenhouse gas (GHG) emissions.

  1. Craig
    September 10, 2019 at 10:01 pm

    A good and correct post. However, we are doomed unless every economist and economic pundit quits fiddle faddling around with genuine but separate insights that are aligned with the new paradigm of direct and reciprocal monetary gifting….but are unconscious of that concept and precisely where, when and how to implement it.

    Every data point, every reform, every preaching to the academic and chattering class choir moves us a thousandth of a millimeter closer to the goal of monetary freedom, economic stability and ecological survival.

    On the other hand communicating the benefits to both the individual and enterprise of the handful of policies, regulations and structural changes of the new paradigm and building a mass movement that herds the political apparatus toward legislating and executing it would integrate the good intentions of all such reform movements and save us from our own apparent lack of survival instincts.

  2. Guy Frost
    September 11, 2019 at 9:19 am

    why would a v large ‘push’ have tax increases? Germany could issue ‘100s of BNs’ at zero cost.. no doubt

  3. Helen Sakho
    September 12, 2019 at 12:14 am

    Polluters must pay? When?

    I am afraid I am not at all hopeful that the damage that global warming has caused us will ever be put right, no matter how hard movements to protect future generations and the plant itself try. It needed genuine governmental cooperation across the globe. It never happened and it is unlikely to happen now.

  4. EDWARD K ROSS
    September 15, 2019 at 9:44 pm

    On the subject of global warming. Following Helen’s comments I agree with her concerns that in the rhetoric for or against global warming there has been very little in the conversation about how to reduce the damage already caused. For example not just stopping the destruction of carbon absorbing rain forest’s, but make serious efforts to re establish them.

    Apart from that what concerns me is that far to much of the conversation on global warming has concentrated on the prejudices of both the for or against global warming followers, not the actual problem.

    From my simple practical background it is impossible to have a meaning full conversation about a subject, such as global warming, without including all the facts involved in the subject in a scientific manor, combined with empirical evidence, Ted
    .

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