The estimated cost of nearly $90 trillion for the Green New Deal grossly underestimates the real cost of the proposed program.
That’s because most manufacturing companies, including those with minimal carbon footprints, will hop across the border and relocate themselves and their jobs to Canada or Mexico — neither of which is likely to shoot itself in the foot by pursuing a similarly lethal Green New Deal.
In short order, the U.S. economy would go from $20 trillion per year ($65,000 per capita) to something more like that of Paraguay ($4,000 per capita). The biggest impact would hit someone like my rural Virginia grocery store clerk — a single mother who is struggling to have pizza night out every two weeks, much less payments on a $40,000 Tesla. Even more troubling is that this self-sacrifice on the part of the United States would do nothing about the massive number of coal-fired power plants coming online in China and India each week. With 20% of the world’s carbon footprint (and decreasing), a U.S.-only Green New Deal makes no sense.
Although the GOP is quick to criticize the ridiculous GND, it is remarkably silent about advancing the feasibility of using renewable energy more extensively. As Rep. Alexandria Ocasio-Cortez says, “You try. You do it (a solution to climate change) …..Cuz you’re not. So, until you do it, I’m the boss. How about that?'” She and fellow liberals view the true ultimate resource as massive government spending and regulation to counterweight man’s tendency toward “flat earther” scientific ignorance.
Before her formative experience tending bar, Ocasio-Cortez’s economics undergraduate experience at Boston University apparently never included the writings of professor Julian Simon. A colleague of mine at the University of Illinois, the late Simon was an economist who believed in supply and demand adjusting to one another.
In a famous bet with biologist Paul Erhlich, Simon said that Erhlich’s forecasts of widespread commodity shortages, including food, were unfounded. He won the bet. Simon today would say that the ultimate resource is man’s inventiveness, which will supply solutions to climate change when the need and demand for such a change is great enough. Whether it is cutting edge carbon-eradicating laser-firing satellites circulating in space above or simply new manufacturing processes that reduce the cost to produce solar panels by 80%, Simon’s disciples would argue that there are solutions out there waiting to be discovered.
As a businessman, President Trump knows that scientific and business acumen can lead the way to developing cost-benefit solutions that could take ridiculous proposals such as the GND off the table. His administration should propose the funding of a NASA-type private-public partnership on renewable energy research, to get the cost of solar, wind, and geothermal power within 15% of the cost of the fossil-fuel solution to energy. The usefulness of clean energy should be another initiative; the range of Tesla-type electric cars needs to be increased to 600 miles, and electric-powered transportation needs to become feasible for semi-tractor trailer trucks.
At its peak, NASA’s budget was 4.5% of the federal budget. Today, a bold first investment of $30 billion would be only 0.75% of the federal budget; much of this could be reclaimed by the thoughtful licensing of the technology developed. But the release of intellectual property should not be too restrictive. The real advantage is that solutions developed by this program are scalable; both China and India would be presented with better cost-benefit trade-offs for clean energy.
It’s hard to believe that Republicans would vote against an approach that keeps the U.S. economy competitive with the world or that the Democrats would not support something that might reduce the world’s carbon footprint, but neither side has failed to disappoint. It certainly does fit the Trump style of an action-orientation of double-daring the other side to give Americans a better (Green New) deal. President John F. Kennedy also believed in man’s genius and inventiveness to deliver a moon landing in eight years. We can do the same with the environment.
Frederick W. Winter is dean emeritus of the Katz Graduate School of Business at the University of Pittsburgh.
