Common Tragedies

Thoughts on Environmental Economics

Twisted green stimulus logic of the day

Posted by Rich Sweeney on January 23, 2009

From RenewableEnergyWorld.com, which, by the way, is one of the best sources for renewable news on the web. Tam Hunt, who’s is apparently a lecturer at Daniel’s alma mater, thinks we can mandate our way out of recession. He wonders, “Where the local stimulus packages are?”. When I saw that title my initial reaction was “states can’t run deficits, so that pretty much takes Keynesian stimulus packages of the table.” Despite acknowledging this budgetary reality, Hunt suggests some crazy other ideas states can use to promote green growth:

One way states can provide a boost is through enacting aggressive renewable energy standards.

Local governments can also enact their own building energy efficiency standards. By doing so, they can spur local investment in energy efficiency projects, creating jobs and leading to cost savings for homeowners and businesses through energy savings.

Last, by choosing to build renewables under CCA, local governments can provide jobs and local infusions of capital that will help kick start local economies more generally.

This is pretty brilliant stuff. If we want to avoid depression, but are concerned about the deficit implications of fiscal stimulus, we can instead simply mandate people to build things. The mind boggles….

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9 Responses to “Twisted green stimulus logic of the day”

  1. Tim said

    cynic

  2. odograph said

    So say when London decided to mandate sewers, stop the cholera epidemics, etc., let’s say they might have done in a period of high unemployment.

    Would the mandate itself be wrong? Wrong only when someone noticed that it might have “health jobs” associated?

    In programming (I’m up all night after syncing with Japan and Moscow, let’s see if I can still make sense), we have this idea that information can be “decorated” with more information. Perhaps a thing is a file, decorated with an icon, or a photo decorated with location information.

    The decoration adds without changing the thing. I see arguments against “green” jobs, which seem to attack the decoration. Maybe an efficiency drive makes sense, and is called green at the moment. Or in one of my favorite examples, the Hoover Dam was built in the 30′s without being called green at all (though now it is of course counted under green power generation).

    There can be bad projects, sure. There can also be wrong times for stimulus, true. I don’ think those rational weighings of good projects and good times add up to an injunction against “green jobs” by any consistent measure.

    No more than sewers were bad because they had jobs associated.

  3. Evan Herrnstadt said

    Odo,

    Correct me if I’m wrong, but I think you’re confounding stimulus with mandates. The idea of stimulus, roughly, is that in a time of economic trouble, consumers and lenders are not confident. So the government can step in and borrow money to help kickstart the economy. The point was that the states cannot provide fiscal stimulus due to balanced budget amendments/clauses. Hunt’s proposal is basically saying that government should step in and make a law forcing consumers to buy stuff.

    There is a big difference between the government weatherizing everyone’s house and the government enacting an unfunded standard that all houses must be weatherized by the owner. As far as I can tell, the London government did not tell everyone that they all suddenly had to build a sewer system; the government itself provided the public good.

    Rich’s outrage stems, I think, from the inefficiency and high costs imposed by these proposed mandates. In fact, he did not mention green jobs anywhere in his post. Employment is not the only ultimate goal of a stimulus package.

  4. odograph said

    I was a little confused in my text, yes. If I recall correctly though the London sewer thing was a mandate at landowner expense.

  5. Evan Herrnstadt said

    Okay, I was actually wondering about the London program — this 1865 NYTimes article says it was going to be paid for by government loan (not sure if that actually ended up being the case or not). Do you have a source — I’m legitimately curious now.

  6. Carlos Ferreira said

    Enact standards, right! Like the US government did with ethanol production, for example. Suppose that, because of credit crunch or whatnot, the investment falls short and the standards are not met. Then what? Will the State’s Governor resign as consequence of his/her silliness?

    Price mechanisms beat standards every day. We’ve known that much for a long time. These standards are just hopeless wishful thinking, most of the time.

  7. odograph said

    I am remembering my read of a story of statistics and science, the doctor, who traced a cholera epidemic back to a well?

    Maybe I was reading something like this:

    Drainage in East London was very poor, as indeed it was over the whole of London. The Commissioners of Sewers, set up by Henry VIII, collected a rate and were meant to maintain the sewers in their area. However, many of the sewers were open ditches, and those which did run underground had not always been properly surveyed, so that the course became blocked up. The worst drain was the ‘Black Ditch’, an open sewer running from the parish of Christ Church Spitalfields and emptying into Limehouse Dock. The Tower Hamlets Commissioners of Sewers had made an attempt to drain it by diverting the flow, but this had made the stream stagnant and more offensive. The Act for the Prevention of the Cholera Morbus came into force in February 1832 and allowed boards to perform some compulsory cleansing of houses for the first time, but was passed too late to have much effect on the epidemic already in progress.

    I see not that the ‘compulsory’ could be read differently. I have no idea now which version of the Snow story I was reading at the time (also colored my modern idea that house owners pay for hook up to the street).

  8. odograph said

    s/I see not/I see now/

  9. justice1023 said

    Where’s the JUSTICE? must be out Rappin!

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