China, Economic Growth and ‘Green Jobs’
by Christopher C. HornerThe news about China overtaking Japan as the world’s second-largest economy is actually quite relevant to the US climate and energy policy debate, which promises to continue despite the scientific scandal and evaporation of political will to associate with a “global warming” or cap-and-trade legislation.
Thanks to a poll by Stanley Greenberg, the measure has been re-branded as “green economy” and “clean energy”. But whatever you call it, and lame duck or otherwise, this latest excuse for central planning will be with us until it is unavoidably tied to serious political costs, like its forerunner the 1993 BTU energy tax, which according to Al Gore in a 2006 interview with the Financial Times led to the Democrat’s loss of Congress. Instructively, that experience originally prompted the re-branding to cap-and-trade.
Now, about the relatively fading Japan, it is important to note that although it has been a persistent economic basket case, it nonetheless serves as one of President Obama’s models for stimulating an economy with “renewable energy” mandates (as we’ve documented in this space on numerous occasions, he’s not always the best-informed about these matters).
China’s relevance to our current policy debate is in part due to the ritual “but, China’s doing it…” line of — for lack of a better word — “argument” for why the US should impose all manner of global warming policies on itself. That deserves scrutiny.
For example, my representative, Tom Periello (D) — who in some circles is famous for insisting that mandating economic redundancy and inefficiency will “grow the economy”, a specific case study in economic illiteracy out of which I get some mileage in “Power Grab” — justified his then-recent vote for the Waxman-Markey cap-and-trade bill by telling a local Charlottesville radio station that we are hemorrhaging jobs to India and China because they’ve already done it.
Yeah. That was my reaction when hearing him say that, too. I was as surprised as the Indians and Chinese.
This was surely Mr. Periello taking more than a bit of rhetorical license with the fact that China is installing windmills as it seeks to get every conceivable joule or megawatt of energy it can to feed its emergence from poverty. But whatever the merits of the silly claims of lessons to be learned and followed from this — and please note that China is installing windmills because Brussels and EU member states are paying them to under Kyoto, to get “credits” in lieu of actually cutting European CO2 emissions — you might recall they are doing so without cap-and-trade.
So if our green advocates mean that we, too, can let Europe pay us to employ a bunch of windmill installers in these tough times, well, ok, let’s do what China did. But otherwise China is not really relevant to the cap-n-traders who nonetheless invoke the Middle Kingdom at every turn, apparently for lack of any material argument.
With one exception. That is that China is growing economically thanks to increasingly providing access to reliable, affordable energy (neither of which terms describe wind or solar power, incidentally). China has been building a coal-fired power plant a week, a nuke a month, and plans a new coal mine every three months. They aren’t playing absurd global warming energy rationing games with their future and security other than a little fun on the side fleecing the frivolous Europeans, like a kitten with a ball of string (and, they hope, soon us as well).
So, upon reflection, is “China’s doing it!” really an “argument” you “green economy” and cap-n-traders would like to wed yourself to? Because I’m all for it. Let’s have that discussion.
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24 Comments
symbolized by the light-bulb that only China produces, legislated to use in the US and hazardous waste removed when disposed or broken
America has been hypnotized to think that we can't rise out of this "decline." That is a bigger LIE than "global warming," Clinton fidelity, and obama qualifications, all rolled into one. If we decided to, and if we had the right leadership, we could rise to levels of prosperity that have never been seen before, even in this country.
Please don't believe the "progressive" lies. We can "fix" our economy TOMORROW if we truly wanted to.
Almost everything you see here in the US is Made in China. This isn't good. But then neither is Made in the USA that happens to be taken over by Unions.
Kermit would love things to be green. I have always loved it when someone uses a communist country as an example of how to do things. Meanwhile the communist country named is adopting free market principles to fuel its rapid growing economy. Uhhhhh, what's up doc? How about that green economy? The only green I care to see right now is the green of the dollar bill. Our economy will be as grey as the darkest cloud if the buffoons don’t get off the economy crushing elitist trip they are on.
You can have that discussion, problem is you will be having it with the true believers and these days they outnumber common sense.
So the best discussion to have is one that makes cap and trade obsolete before they make it mandatory, the way to do that is promote green energy that LOWERS the cost of electricity in place of a tax on all energy. Green Energy that is cheaper than big centralized coal fired power plants. Green energy that supports the existing grid and doesn't need a smart grid. Green energy that pays for itself with lower cost to the consumer. Green Energy that uses American natural gas.
Let's have that discussion.
So, it seems like you are saying that this perverse Progressive attraction to cap-n-trade and centralized energy planning is not truly related to growing the economy?
Well, sir, I need only refer you to the Progressive bail out of GM and the economy expanding stimulus package as references to Progressive economic prowess.
Just because YOU don't have the academic chops to understand how these policies will expand the economy and secure our future is no reason to interject China (a country at a completely different stage of development) into the argument.
Just look at the adjusted Q1 economic growth rate that Progressive economics have given us.
That's all you need to know, Mr. Bloggerguy.
Does anybody care that 800 million peasants in China are barely subsisting?
Human rights in China do not exist.
Oh please. Progressive economics have otherwise SLOWED recovery. If the government had not meddled in the market place we would probably be out of the recession right now. As it is we are facing a double dip. GM didn't get better with a bail out. The gov simply propped up a failure that should have gone bankrupt and allowed its subsidiaries to be purchased or reform into more profitable ventures. But further more it would have allowed GM to renegotiate its strangling union contracts.
Attributing Q1 growth to gov efforts is like standing next to a volcano, waving your hands and then brag that you made the volcano erupt. What we are seeing is the economy slowly recovering DESPITE the massive load put upon it by gov intervention. This just shows how strong the US economy is. Given that MOST of the stimulus was NOT spent on the private sector and instead spent on the public sector to make more unsustainable jobs is not proof that the gov helped with growth.
Keynes is flawed because and boost made by gov is always followed by a bust no different than a family gaining a temporary boost from a new credit card and then going through a bust when the bill comes due.
Don't worry. Any so called marginal gain in Q1 will be offset by the massive 1 trillion in interest we will have to pay this year on the national debt. Add to this when the tax cuts are removed and the gov increases taxes, you will see a huge halt in recovery.
Damn Skippy we can!!!!
Hahahahahahaha
Blahahahahahahaha!
You have got to put down the pipe and get back to your academic (anemic) crowd at Harvard!
1. Economy expanding stimulus? This is the biggest toilet drain ever in the history of the world. The FACTS demonstrate that with this $1 trillion theft of US working taxpayer's money, the unemployment has risen and WILL continue to rise.
2. Bail out of the Unions, NOT GM. Bondholders got screwed and told FU by this administration. GM should have been placed in receivership and undergone normal bankruptcy.
I could continue but you most likely will not understand.
Since you believe that you are entitled to YOUR OWN facts, please enlighten all of us here to a point in history (any country, any timeframe) when progressive economics have grown ANY economy by 5% or greater year over year with a lowering of unemployment!
Mr. Horner,
Why don't you educate your readers instead of just bashing Obama…why don't you tell them that there is green energy that is cheaper than the old coal plants. Why don't you tell them that regulation of the grid is the major obstacle for lowering our power cost in this country???
I have searched the company you work for, Competitive Enterprise Institute, and they are very aware that what I say is true. Do you want the Tea Party to know there are economical solutions that would lower the cost of electricity or not??
Why don't you help fight the ignorance? I don't get it.
"why don't you tell them that there is green energy that is cheaper than the old coal plants."
I'm just curious, sorebird. Which green energy are you referring to?
Ok what green energy is cheaper than coal that can provide as much power as coal. Yes wind is free but its contribution is negligible. And which green tech is available that isn't heavily subsidized by the government. Subsidies are not free money.
Yes this is something nobody is taking into account. China essentially runs on slave labor. They even round up villagers and put them into work cities.
But the other thing that is not taken into account is as these workers gain economic power, they will be putting huge demands on the economy and the gov for better work conditions, higher pay etc. We saw this in India already within 10 years.
China is only doing well cause it has slave labor. That will end after a time.
Industrial Combined Heat and Power CHP and decentralized CHP called microturbines that can be used to power individual buildings–mostly powered by natural gas. The technology is already being used but the pace and regulation against it has slowed the growth to a snails pace. This is the technology that can defeat cap and trade and gain a majority of Americans support.
These are articles authored by Mr. Horners company promoting CHP and microturbines, and there are a few that talk about regulation and depreciation as being the two main obstacles. I can give you links from the EPA,DOE, ORNL, EERE ect that say in no uncertain, glowingly optimistic and unabashed terms that CHP should be at the forefront of any green energy solution in this country and the world. They also agree regulation is the bottle neck along with the fact that utilities "lose revenue"<<<<
DOE and EPA;
"CHP can avoid 60% of the potential growth in carbon dioxide emissions between 2006 and 2030"
"CHP Provides a Profitable Path to “Going Green”"
From
Newer facilities and equipment are almost always cleaner and more energy efficient than older capital stock. That is widely understood. So is the fact that advanced technologies face market barriers due to their higher cost. What is not as well understood is that America’s plodding depreciation schedules penalize investment in new energy assets, such as combined heat and power systems, pollution control equipment, and smart meters.
The American Council on Capital Formation (ACCF) commissioned Ernst & Young to compare the tax depreciation rules for eleven types of energy investments in twelve countries. Ernest & Young found that, in every investment category, U.S. depreciation rates are the slowest, or among the slowest, of the countries studied.
For example, after five years, U.S. firms recover 29.5% of their investment in combined heat and power systems compared to 49.7% for Japanese firms, 79.6% for Canadian firms, and 100% for Malaysian firms.
Ernst & Young also note that, “Because the United States has the second highest statutory corporate marginal tax rate among OECD countries combined with generally less favorable tax depreciation rules, the differences in effective tax rates are even greater.”
The policymaker’s Hippocratic Oath applies here: ‘First, Do No Harm.’ Freeing up investors to improve both the productivity and environmental performance of U.S. firms should be at the top of Congress’s energy agenda. http://cei.org/op-eds-and-articles/time-real-win-...
———————————————————-
A study sponsored by the American Council for Capital Formation found that, as of December 2001, the United States lagged behind several of its trade partners in terms of capital cost recovery for electric power generation, pollution control technology, and other energy assets. For example, after five years, a company that builds a combined heat and power plant in the United States recovers only 29 percent of its investment compared to 51 percent in Germany, 53 percent in Japan, 100 percent in the Netherlands, and 105 percent in China.
By removing the tax penalty on capital investment, expensing would encourage more rapid turnover of plant and equipment. In general, state-of-the-art facilities are more productive than older units, delivering more output per unit of input, including energy inputs. Expensing would thus accelerate carbon intensity decline – yet without building political support for energy rationing .http://cei.org/outreach-regulatory-comments-and-testimony/ceis-fred-smith-and-marlo-lewis-send-coalition-letter-pre
Other competitive pressures include potential adoption of lightweight microturbines, capable of serving a 7-Eleven or a large home, which some researchers believe could rival the change in computing from the mainframe to the desktop in significance.Ending exclusive distribution franchises is necessary to ensure that firms other than existing distribution utility monopolies can exploit all these options. If the delivery monopolies remain intact, a homeowner’s association or business park deploying microturbines, for example, could find itself in violation of a local franchise. As Tom Casten of Trigen Energy notes, if he crosses the street with a wire he goes to jail. Open access can similarly stand in the way of localized exploitation of alternative energy options by entrepreneurs. http://www.google.com/search?hl=en&rlz=1B7GGG...
That's great news!
So, then…..why do we need cap-n-trade and higher taxes?
Think of the money the government will save in operating costs of all the building, facilities, bases,etc etc that will abound with this cheaper energy.
What possible reason could there be to raise taxes or inflict cap'n trade based on all these savings???
i) GM's numbers give hope for a brighter future
ii) We can only reasonably assume that if the government did not 'meddle' in the market place; things would have been worse. Things were looking bad. Doing nothing would have led to worse. We hoped for a quicker turn around, but, sometimes changes take longer than we hope for…
iii) The government won't be increasing taxes. Although, Bush's inability to make his cuts permanent won't help. We would have hoped Bush would have come through on that one.
Good question and the answer is Crime Inc., and the bastardization of 3BL.
Those entities want their tax payer funded smart grid and a captive power distribution system–like the one we currently have only smarter. And they want a market for their technology–EVs, solar, wind, smart devices, carbon and energy.
You think?
I dunno.
How much smarter can it get??
Have the Unicornian Progressives ever really looked at what goes into a Prius? What is required for "green technologies?"
The Prius is loaded with rare earth minerals. Next generation solar technology requires (drum roll please) OIL. Yes OIL. You know? The stuff we are supposed to be shunning.
China has a corner on rare earth minerals. The same rare earth minerals that go into your beloved Prius, your cell phones and even the Predator drone. There are few companies that are pure rare earth mineral plays. Molycorp has one mining operation in California. Avalon Rare Minerals is a Canadian company with just a handful of assets. Try and dig (pun intended) deeper and you will find slim pickens' outside of China.
Don't chase stocks but it would behoove of you to start accumulating the equities. Unless you think that the world will stop buying cell phones and drones will be shelved and be replaced with muskets and minutemen. Oh yeah. And Obama will shelve solar for coal.
i) GM still went bankrumpt, and still has a long way to go, but will only get better after it becomes private once again.
ii) Government intervention much like with the New Deal, only keeps the recession in hold. Instead of getting better, it just keeps us in the state of a poor economy longer than we normally would without the unneeded involvement of the government. If the government didnt do anything, we would have come out of this reccession alot faster than we are now and have much more growth than what the government has pittifully done.
iii) Yes, the government will increase taxes. It may raise some of them indirectly to where it will increase the prices of products and services. What we need is less government spending, and fix the damn tax code to a single damn page, and give the federal government enough money just to fuction and nothing more.
1. GM's numbers are lies. They claim profit when they haven't come close to paying the taxpayers back. How can you claim a profit when you are STILL DEEP IN THE RED?
2. It was the meddling in various markets that caused us to crash. Government should NEVER EVER think they have the wit to decide winners and losers. The real estate mess – Who is at fault? The progressives. The stock market mess – who was at fault? The progressives. Destruction of the manufacturing base in the USA – who is at fault? The progressives. And the list goes on and on…
3. The liberal pigs HAVE ALREADY increased taxes through the healthcare compost pile and they are just dying to do more though the cap and tax compost pile and by any other means they can pass in the dead of night while the "press" nods approvingly.
Don't worry though, I can see November from my window.
Mr Horner, thanks so much for what you do, you have been relentless!
The Carboniferous Period was called that for good reason. AGW is a fraud and crime against humanity. Lock them all up. The USA is an energy superpower and we need to start acting like it or go bankrupt and let the world slip into despotism.
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