As Canada’s Prime Minister Trudeau contemplates the future from the safety of his cottage and absence of Parliament Question Period, his thoughts have turned to the opportunities to reshape the country.
Ah, the Brave New Green World where renewable energy and economic growth march hand in hand into the sunset.
In this Green World, everyone prospers. The economy grows by leaps and bounds. There is no racism. There is no poverty. There is no pollution. All is peace and harmony.
The central tenet of Liberal philosophy regarding both climate policy and economic growth is that the latter is created because green technology subsidies or the carbon tax encourages the creation of new clean energy businesses.
These businesses, in turn, increase demand for goods and services, employ people who spend money in the local economy and create the green products.
Damn it. It is the virtuous circle.
This description of paradise has been repeated so many times by green advocates and their politicians that people have come to believe it.
Sadly, economics teaches us otherwise.
As a recently published study of the climate policies of California and New York shows, green subsidies increase costs for businesses and individuals alike without a corresponding effect of CO2 emissions.
Far from being the best of both worlds, says the Pacific Research Institute, the approach adopted by California and New York is an abject failure.
The reason is simple: All businesses created in the new green sector, all jobs created, must come at the expense of the dirty, non-green jobs.
After all, the goal is not economic growth but rather the elimination of CO2 emissions. Any jobs which are involved in the production of CO2 would have to be eliminated.
Duh. Double Duh. Triple Duh.
In other words, there is no NET increase in jobs and, therefore there is no economic growth.
The fact that the green sector is more labor intensive merely compounds the problem.
It is, as economist Milton Friedman once observed, thinking that giving everyone a shovel to move earth for a road is preferable to employing a few earth movers.
Worse still is the fact that the green policies of the two states have raised prices for consumers, disproportionately affecting the poor.
As the study points out, the costs of renewable energy cannot be wished away. Those costs must be paid for by someone – either the ratepayer or the taxpayer. There is simply no getting around that fact.
Those states that have embraced fracking and natural gas, the study says, have kept costs down and reduced emissions.
It’s a study that should be read by all who care about sane economic policies and required reading by Canada’s Prime Dreamer.