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The one thing a green new deal needs

March 4, 2019

Quite a few commentators who consider themselves moderate are pointing out that Alexandria Ocasio-Cortez has brought the problem of global warming to the center of political debate. Which is good. But that her green new deal is misguided. Which it is. And offering what they think we need instead:

When AOC’s critics say her idea is preposterously expensive and unnecessarily socialist (as it is), she is perfectly right to ask: So what’s your alternative? Here’s a suggestion: Focus on a non-carbon energy source that is already proven to be technologically feasible, can be quickly scaled up, and can potentially meet all our energy demands. What we need, given how little time we have, is a massive nuclear energy program.

And there, Sullivan is just as misguided as Ocasio-Cortez. It’s quite easy to imagine a future, ten years after a program to build nuclear power plants, where there is cheap energy both from them and expanded oil and gas production. A future where the fossil fuel industry responded to nuclear competition by more automation, ever better extraction mechanisms, and building closer relationships with select utilities and other sales chains. That future world is awash in energy, which is good. And, alas, emitting more CO2 into the atmosphere than now. A crash program to build nuclear reactors changes the energy production mix. It does nothing, by itself, to guarantee a reduction in CO2 emissions. The mistakes such a proposal makes are those conservative economists rightly warn against: trying to closely plan the nature of an unknown future economy. And underestimating how entrenched industry will react to any such proposal to protect its own interests.

Fossil fuels have been a great boon. Unfortunately, the necessary change now is to slow their use and to reduce carbon emissions into the atmosphere.

Economists know that the way to do that is to target the problem directly. Tax fossil fuels. Ideally, rated to the carbon emitted by their use. Write the law so the tax ratchets up every year.

That directly reduces their use by increasing their cost. It generates a variety of economic adaptions to that. People and businesses will reduce some use just by forgoing what they otherwise might have done or better planning it, from travel to construction. They will turn to substitutes: buildings will be built with energy efficient lighting and solar roofs, people will purchase electric vehicles, and in areas where there is a choice, more will travel by train than by plane. Companies building ships and planes will redouble efforts to increase fuel efficiency per passenger mile traveled or per ton mile carried. Utilities, reading the writing on the wall, will roll out non-fossil fuel sources. Some might opt for more solar and wind and batteries.

Some might opt for new nuclear power plants. Those like Sullivan calling for that might be right that it is a part of the solution. Despite a recent skeptical assessment of that, who knows? The federal government certainly should do what is necessary on the regulatory front to ensure that new variants can be tried as economically and expeditiously as practical, while retaining high safeguards.

But any program that tries to roll it out as the solution both overlooks the target — reduced use of fossil fuels — and attempts exactly the heavy-handed kind of economic planning that so rarely works. Create a price wedge using a carbon tax, and let entrepreneurs and technologists and investors find the right path forward. Don’t insist on the outcome of that. Don’t pretend that we can know now what the right outcome is for the future economy.

A good carbon tax will reduce future CO2 emissions, even with no other public policy. All other proposals combined might fail to do so, without it.

The large question is whether we can muster the political will. The fossil fuel industry has spent decades and hundreds of millions of dollars to prevent a solution. Reducing CO2 emissions requires burning less fossil fuel which means reducing their revenue. That is a simple equation for them. So they have created faux think tanks such as the Heartland Institute, churned out massive amounts of propaganda, and funded right-wing politicians. Their messaging creates the desired fog. It will say that a Pigovian tax is socialist. (It isn’t.) It will boast the benefits of fossil fuels. (True, but they still are causing this global problem.) It will talk down all alternatives. (As if capitalism can’t create new solutions.) It will ridicule climate science. (Read this article on the notion that scientists in the 1970s were predicting a soon ice age.) It will minimimize the US’s role. (As if this global problem doesn’t require leadership and cooperation.)

A Democratic presidential candidate who runs on a carbon tax will face the full assault of the fossil fuel industry’s media fury. They should take it with pride, because it is the one thing any real green deal must have.

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