How Green Is My Recovery...

MMGW proponents will tell you that the road to economic recovery is to be found in "green jobs". These jobs are supposed to save us all and thus need to be subsidized heavily. One problem with that (HT Powerline) .....

When everybody seems to have the same big idea, you just know it can only mean trouble. Remember sub-prime mortgages? Now universally excoriated as the spawn of the devil, the proximate cause of the credit crunch and all that followed, a few years back “sub-prime” was everyone’s darling. Financiers loved it because it generated sumptuously high-yielding debt instruments; governments, because it promised to make even the poor into proud property owners.

Now business lobbyists and governments on both sides of the Atlantic have got a new big idea. They call it “green jobs”. Leading the pack is, as you might expect, Barack Obama. The president recently defended a vast package of subsidies for renewable energy on the grounds that it would “create millions of additional jobs and entire new industries”.

In all fairness, I wouldn't say that President Obama is necessarily "leading the pack". That honor goes (as it should) to former VP Al Gore! However, the point of the column really is what happens when government decides who is going to win the innovation lottery (as opposed to letting the market decide)....

In Britain, the business secretary, Lord Mandelson, promises billions in state aid for the same purpose. To add verisimilitude, last week he gave a royal wave from the inside of a prototype electric Mini. Mandelson’s chauffeur was a representative of the lower house: the transport secretary, Geoff Hoon.

The occasion for this photo opportunity was the government’s proposal to offer a £5,000 subsidy to anyone buying an electric car of a type not yet available: exact details to be given in Alistair Darling’s forthcoming budget. The idea is to create a “world-beating” British-based electric-car-manufacturing industry, while also attempting to meet Gordon Brown’s promise to have the nation converted to electric or hybrid cars by 2020.

Can I just another quick aside here. If we all convert to electric cars, aren't we going to need to bring more power plants on the grid soon? If we add more coal fired power plants to the grid, how are we reducing green house gasses?

All snark aside, what do you think will happen should the day come when the US, Canada and Enlightened Europe all impose cap and trade restrictions on their businesses?

If making carbon this personal seems rude, then think globally instead. During the presidential race, Barack Obama was heard to remark that he would bankrupt the coal industry. No one can doubt Washington’s power to bankrupt almost anything—in the United States. But China is adding 100 gigawatts of coal-fired electrical capacity a year. That’s another whole United States’ worth of coal consumption added every three years, with no stopping point in sight. Much of the rest of the developing world is on a similar path.

Seriously, with all of the other more pressing issues facing our leaders, one has to wonder just how much money can be thrown into these "green jobs" initiatives.

Analysts say the focus next week will be on help for renewable energy such as wind power, grants to make homes more energy efficient and perhaps a scheme to encourage drivers to trade in old cars for less polluting new models.

But while such promises may impress voters, Brown has little spare cash to throw at large-scale environmental projects as the budget deficit is expected to top 10 percent of GDP this fiscal year because of the economic downturn.

"He hasn't got a lot of room for manoeuvre, it is window-dressing," said Alan Clarke, UK economist at BNP Paribas.

Don't get me wrong - I am all for finding alternative fuel sources. It does need to be done. However, as I have said before, the government should not be in the business of deciding up front which alt fuel is going to win. I said that when President Bush and Tim Pawlenty were pushing ethanol and I'm saying it now while President Obama is pushing electrics. Let the car manufacturers figure out which alt fuel is going to be the easiest to convert their cars to. Let the oil companies go the route that BP is going - for they have been working on synth fuels for some time now. Let the businesses who know their business best go about finding these alt fuels and get the governement the heck out of the way. That is the quickest way to get the innovation that we need done!