The Green in the Green New Deal is Money

Let's approach the issue of climate change in a slightly different way than usual. Let's ignore it. (OK, that's not unsual, but follow me for a bit to see where this goes) Let's look at a completely different problem and see if we can find the best way forward. Take the economy in general and the energy sector in particular. How can we save money?  How can we make everything cheaper for everyone? That seems like something we should all be able to agree is a good goal.

We start with the energy sector, something that is a basic component of almost every other product in the world. Our energy sector is heavily dependent on fossil fuels and the associated technologies that run off them, and has been for a long time. This historical aspect is very important. It means the industry is well developed and technological advances and increased efficiencies have become slow and incremental, while at the same time it also means the industry is quite wealthy and naturally uses that wealth to protect its own interest. It's based on raw materials (oil, coal, and natural gas) that are limited and whose extraction necessarily becomes more difficult and expensive over time. It's an old industry that fights change has hard constraints on future savings.

Fossil fuels are not going to get much cheaper and most likely will get more expensive. If they seem cheap now, it's largely because they are heavily subsidized, both directly and indirectly. The industry has used its wealth and power to get concessions from governments worldwide through cheap land costs and drilling rights to go along with lower tax rates, but that's just the start. The true subsidies for fossil fuel lie in the rest of society absorbing their externalities.

Burning fossil fuels pollutes our environment (well established) and this pollution damages health and kills people, lots of people (again, this is well established). The healthcare for the millions of people affected costs a lot. So does the lost production of the people who die. And the rest of society pays these bills instead of the companies that cause them. Other externalities include the cost of all the wars we fight over fossil fuel rich lands, both in terms of military expenditures and population upheaval.That's not even counting the damage from climate change - because we're ignoring that, right?

All these costs add up, which means the price you're paying at the pump isn't really the true price for fossil fuels. You're paying a lot more - $5.3 TRILLION a year worldwide. So if fossil fuels are really expensive, what's the alternative? Renewable energy.

In particular, solar and wind energy are relatively young industries. That means they are experiencing rapid efficiency improvements through technological gains. They also rely on natural resources which are, for practical purposes, readily at hand and infinite. They will keep getting cheaper and cheaper for the foreseeable future (and they are already price-competitive to fossil fuels for electricity generation). Ignoring climate change again, in ten years time renewables will provide cheaper power than fossil fuels, and the sooner we make the transition to electricity everywhere possible the more money we will save (don't take my word for it, read the reports from the financial sector - the people who only care about saving and making money: Citi Report; Investment Report).

And renewables don't have anywhere near as large of externality costs.We'd be saving money and saving lives by reducing pollution. We'd be reducing U.S. reliance on external sources for our energy needs. We'd be reducing the necessity of armed conflict (thereby protecting our troops) by not having to protect oil supplies. I think most of us would agree these are all good and useful things on top of all that money we would save.

So, if renewables are cheaper and better, why are we stuck in this petroleum based world? How do we, as individuals in a large society, help convert our system to the better option? Isn't that how the free market is supposed to work - can't we just let it do the job? The problem with free markets is that they only exist in theory. Every market in the real world is imperfect and regulated, so that is what we have to deal with.

We are in this situation because at one time in the past fossil fuels represented the best (cheapest) solution. The oil companies grew rich and powerful because they provided cheap energy, cheaper than any alternative, and that was just fine. But once a market is established and the players involved have both large market share (to control buyers' options) and political influence (to control regulation and subsidization), change, even for the obviously better, will be resisted by those who benefited in the past. The old guard will fight free market forces, and the only way to restore a free-market preference is to counteract the anti-free market companies.

We do that by regulation, a necessary evil to help the market function as it should. We do it by removing the subsidies from the old and dying fossil fuel industry (and making them pay for the full cost of their products). We do it by subsidizing and encouraging renewables through government investment and incentives. And to make that happen, we, as citizens, need to vote for elected officials who will implement such changes to our benefit - regardless of their reasoning.

If you want to save money, if you support free market solutions, if you want everything to be cheaper and more efficient, you need to support the Green New Deal. It doesn't matter if other supporters are a bunch of do-gooder leftists who think they're saving the planet. If global warming is a complete hoax we will only save ourselves a bunch of money. (If it's not, we'll also save millions of lives and leave a better world for our children, but that's just a perk). We just want cheap transportation, reduced energy costs, and lower health care costs. And we want it now.