Wednesday, January 1, 2020

The Best Green Future May Be Socialist

Writing the last two posts has been a wrenching experience. I knew, abstractly, just how big a task we face in decarbonizing the US economy, let alone the global economy, but laying out the problem with natural gas in the USA – only one fuel in only one country – brought home the scale of the problem. Hundreds of millions affected. 30 trillion cubic feet of natural gas consumed in 2018. (Or, if you like, 850 billion cubic meters.) 7.5 billion barrels of petroleum. And we are to make a significant dent in this in just ten years?
Just dropping fossil fuel subsidies and eliminating hydraulic fracturing (fracking) within the USA would raise the price of natural gas significantly. Before fracking became a routine practice, natural gas cost roughly 2.75 times its current price. Abandoning fracking and subsidies would perhaps raise the price to 5 times its current level. There would be knock-on effects. Roughly 35% of US electric power comes from natural-gas fueled plants. But doing that alone would simply lead to a shift to petroleum, which is priced on an international market. So there have to be other changes: tariffs on imported petroleum to maintain parity with still-subsidized imported fuels as a start. This would raise energy prices overall. Plastics are made from natural gas and petroleum byproducts and those prices would also be affected. In turn, the prices of products made from plastics will rise.
Wind and solar energy might, if brought online fast enough, fill much of the gap in energy production, but those technologies have their limits. (I’ve written about this before, in several posts. Start with The Green New Deal: Running the Numbers.) And there are sure to be problems, because there are always problems.
The cascading changes and the need to respond to unexpected consequences demand a managed economy. Not managed in minute detail, no, there is no need to pre-calculate exactly the number of each type of widget a factory is to produce, but management that responds to gross systemic needs as they emerge. This is exactly what conservatives have been fighting against, all these years. In their fight, they rejected every moderate solution, until a managed economy is the best hope that remains.
If this is not quite the moneyless planned economy of communism, it is at least Keynes’ “somewhat comprehensive socialization of investment” and nearer to planned state socialism than anything that has previously been attempted.
The best green future may be socialist.

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