The case against the revitalizing power of the “new green economy”

Elizabeth Kolbert writes:

The basic premise of Jones’s appeal—that combatting global warming is a good way to lift people out of poverty—is very much open to debate. Economists generally agree that the key to addressing climate change is to raise the cost of burning fossil fuels, either directly, through a carbon tax, or indirectly, through a cap-and-trade program. Low-income families are the ones that would be hardest hit by such a cost increase. They could be compensated through some kind of rebate, or a cut in other taxes; it’s been proposed, for example, that revenues from a carbon tax could be used to reduce the payroll tax. But it’s not at all clear that the number of jobs created by, say, an expanding solar industry would be greater than the number lost through, say, a shrinking coal-mining industry. Nor is it clear that a green economy would be any better at providing work for the chronically unemployed than our present, “gray” economy has been.

When I presented Jones’s arguments to Robert Stavins, a professor of business and government at Harvard who studies the economics of environmental regulation, he offered the following analogy: “Let’s say I want to have a dinner party. It’s important that I cook dinner, and I’d also like to take a shower before the guests arrive. You might think, Well, it would be really efficient for me to cook dinner in the shower. But it turns out that if I try that I’m not going to get very clean and it’s not going to be a very good dinner. And that is an illustration of the fact that it is not always best to try to address two challenges with what in the policy world we call a single-policy instrument.”

Matthew Kahn, an economics professor at U.C.L.A.’s Institute of the Environment, noted that public-works programs have a history of inefficiency. Why would an environmentally oriented public-works program be any different? “How do we make sure this isn’t just a giant green boondoggle?” he asked.

Jones’s response to such critiques is, in effect, to do them one better. Yes, it may be difficult to address climate change and poverty at the same time, he says, but it’s even harder to do so separately. “You’ve got to have a holistic, integrated set of solutions or you’re going to wind up with half your energy being used up to fight ‘Drill, baby, drill!’ ” he told me. “People say, ‘Oh, we’ll take a shortcut.’ Well, those shortcuts are a lot longer than they look.”