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How Do You Pay for the Green New Deal: Cost of Fuel

by gmoke Thu Jul 4th, 2019 at 08:31:36 PM EST

I did some back of the envelope estimates of the cost of the fossil fuels we use in a year.  
The source of these figures is the USA DOE Energy Information Agency https:/www.eia.gov/tools/faqs/faq.php

But any mistakes in arithmetic are my own.

-----------------

7.5 billion barrels of petroleum products consumed in USA in 2018
average price $69.78 per barrel
Cost of petroleum products:  $523,350,000,000

In 2017, the United States consumed about 27.11 trillion cubic feet (Tcf) of natural gas
average of $4.08 per thousand cubic feet
Cost of natural gas:  $110,608,800,000

EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst)
$39.09 per short ton (2017 price)
Cost of coal:  $27,011,190,000

Total:  $660,969,990,000

We spend nearly $661 billion per year or something like that on fuel alone every year.
And these are only ballpark numbers, probably on the low side.

With the 2018 USA GDP at $20.50 trillion, the cost of fuel is approximately 3.22% of annual GDP

---------------------------

Another "cost" of fuel is covered in the International Monetary Fund's recent report on fossil fuel subsidies, covering 191 countries:
https:
www.imf.org/en/Publications/WP/Issues/2019/05/02/Global-Fossil-Fuel-Subsidies-Remain-Large-A n-Update-Based-on-Country-Level-Estimates-46509

They look at the difference between the market price and "how much consumers would pay if prices fully reflected supply costs plus the taxes needed to reflect environmental costs and revenue requirements."

Global fuel subsidies were $4.7 trillion (6.3% of global GDP) in 2015 and were projected to be $5.2 trillion (6.5% of GDP) in 2017
China subsidizes the most with $1.4 trillion per year
$649 billion in 2015 for the USA, 3.6% of GDP
Russia at $551 billion
EU at $289 billion
India at $209 billion

"Efficient fossil fuel pricing in 2015 would have lowered global carbon emissions by 28% and fossil fuel air pollution deaths by 46%, and increased government revenue by 3.8 % of GDP."

Subsidies consist of underpricing for local air pollution, the largest source (48% in 2015),
global warming at 24%
broader environmental costs of road fuels at 15%
undercharging for general consumption taxes 7%
supply costs 7%

Coal and petroleum get 85% of the global subsidies monies.
Coal receives 44% of subsidy monies
petroleum 41%
natural gas 10%
electricity 4%

"If fuel prices had been set at fully efficient levels in 2015, estimated global CO2 emissions would have been 28% lower, fossil fuel air pollution deaths 46% lower, tax revenues higher by 3.8% of global GDP, and net economic benefits (environmental benefits less economic costs) would have amounted to 1.7% of global GDP."

---------------------------

The USA spends about $661 billion per year on the cost of fuel
and another $649 billion on subsidies for that fuel
That's about $1.2 trillion per year for the full cost accounting of fossil fuels and such fossil foolishness.
That's about 7% of USA GDP

The energy transition, Energiewende, of Germany is estimated to cost 0.5 - 1.2% of GDP per year
Source:  https:
/www.cleanenergywire.org/factsheets/how-much-does-germanys-energy-transition-cost

How do you pay for the Green New Deal?  You do away with the cost of fuel (and all the subsidies that go along with it).


Poll
More ways to pay for a Green New Deal?
. yes 100%
. no 0%
. not yes 0%
. not no 0%
. neither yes nor no 0%
. both yes and no 0%
. don't understand the question? 0%
. none of the above 0%

Votes: 1
Results | Other Polls
Display:
Shrewd change in tack.

I am a fan of "cold turkey" behavioral modification of corporate persons. I have hinted.

Willing to suspend disbelief in legislative unanimity.

Besides rhetorically exploiting the market power of government treasury, opportunities to prove the falsifiability of sunk cost not only to incumbent firms' investors but to "avg US taxpayer" await. Capitalists' objections to "interference" by the state with "free" market solutions is inevitable. However, double-entry accounting of expenses ("cost") is demonstrable and should foreclose protracted fraudulent activity, including but not limited to litigation.

The search for "recoverable" costs must immediately and explicitly be met with revenue guaranteed by state subsidies withheld from undesirable industry. No credit. No deferred tax obligations. No exceptions.

Every cost is also income. Money is not "lost."

Diversity is the key to economic and political evolution.

by Cat on Fri Jul 5th, 2019 at 03:54:45 PM EST
I'm looking for economists who are studying what happens when the cost of fuel goes away.  Would be good to imagine what that would look like.

I went to a day-long event at Harvard Law School a few weeks ago on "how to pay for the Green New Deal" and none of this was mentioned there, surprisingly.  It turned out to be an invocation of Modern Monetary Theory instead so I did my little bit of research since I haven't found any "experts" who seem to be thinking in this direction.  

Solar IS Civil Defense

by gmoke on Fri Jul 5th, 2019 at 08:31:32 PM EST
[ Parent ]
"Cost" will never "go away". Call it "loss" or call it "death", call it a recurring fact of human experience. So are birth and union.
--
HLS seems to me an unlikely venue for exhibitions of intellectual plasticity. Institutional peculiarity per se is not so important as professional limitations of its members. I expect them to convene discourse in defense of "common law" tradition, eg. stare decisis. Topical interest, eg. MMT, necessarily reinforces status quo valuation and social boundaries. Sometimes that strategy's appropriate, sometimes not.
--
Where else might one find amateur and professional economists who are actually sensitive to fuel demand elasticity and routinely recommend optimal allocations of public and private equity?

Market Makers
real-time demand destruction
Have you been paying attention to industry diversification in this space?

Price Takers
UN Climate Fund to make funding green projects easier
Have you been paying attention to grant-making and concessional loans in this space? 14 June RFP, illustrated.

Diversity is the key to economic and political evolution.

by Cat on Tue Jul 9th, 2019 at 07:56:46 AM EST
[ Parent ]
"The reforms should encourage the industrialised countries to increase their contribution to the fund," said Dagnet.
[...]
The gap left by these states must be closed, said CMIA's Tracy, who is relying on Japan and on EU member states to close it. Non-state actors should also be targeted - but in order to reach them, the fund needs to become more efficient.

"That's the big goal for the weekend," Tracy said.

United Nations Framework Convention on Climate Change (UNFCCC) in Bonn (17-27 June).

Diversity is the key to economic and political evolution.
by Cat on Tue Jul 9th, 2019 at 08:03:39 AM EST
[ Parent ]
If you aren't buying petroleum, natural gas, and coal and burning them up for power, the costs of those commodities to your enterprise, private, public, or national, goes away.

That may be simplistic but it is also real.

Of course, the externalities from previous burning of such commodities goes on costing but that's another consideration entirely.

Solar IS Civil Defense

by gmoke on Tue Jul 9th, 2019 at 06:48:51 PM EST
[ Parent ]
Thar you go!

"Cost shifting", as the proles say, is real. It never goes away, and sumbuddy gets paid/compensated to "clean up". Thank Kuznets for the shambolic arithmetic expression, Y = C + I + G + (X − M), or ...


Diversity is the key to economic and political evolution.

by Cat on Tue Jul 9th, 2019 at 10:27:14 PM EST
[ Parent ]
However satisfying I would find stiffing the fossil fuel industry it might not be the wisest course. To prevent serious disruption of the economy it would be wise to phase in the discontinuation of fossil fuel. We want to make it uncompetitive and then let market forces do the rest. But transition takes time.

We need to front load the process with subsidies for renewable energy and funding for transmission infrastructure and energy storage capacity and related research projects. Several technologies are mature enough for initial deployment including fuel cells combined with hydrogen generation from renewable energy, pumped hydro, thermal solar electrical battery storage and some flow battery configurations.

The goal should be to get to 100% renewable energy and then some ASAP, so we will have the capacity to convert polluting manufacturing and refining processes to renewable energy ASAP.

The fossil fuel industry is ripe for disruption and it is hard to compete with energy sources that require no fuel. Do that and avoid disruptions during the transition. Five years should be adequate to transition to renewable energy generation. Ten years to transition most of the transportation infrastructure.
 

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Jul 6th, 2019 at 03:10:43 AM EST
It also will be easier to pass legislation that funds and subsidizes initial renewable energy infrastructure than to take down the entire fossil fuel industry for starters. That victory alone will guarantee that fossil fuel will be eliminated in time. Better that than fighting and losing a battle over preemptively closing down fossil fuel. The second step would be eliminating fossil fuel subsidies.

That said, as soon as it becomes politically possible to eliminate subsidies for fossil fuels go for it. Even if we start by only reducing them.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Jul 6th, 2019 at 03:18:03 AM EST
[ Parent ]
If a pleasant and gradual reduction in fossil energy is the strategy, it will have to also include large negative emissions technology.

Delay in Dealing with climate change.

by asdf on Sat Jul 6th, 2019 at 05:18:33 AM EST
[ Parent ]
1 point for recognizing concept and (implied) values of externality in economic doctrine.

1 point for adding that barrier to ideation of GAAP doctrine (double-entry real number Q).

0 points for displacing the goal of the state: eliminating fossil fuel production by private firms.

Let's note the unstated assumption: Public interest is identical to private interest. This assumption is deeply, ironically ingrained in utilitarian ("neoliberal") economic rationales for legislative acts. This assumption is not true --especially in the USA-- wherever litigation of commercial business occur. Hence gmoke's disappointment with HLS "expert" testimony and spatic revivals of undead market failure literature examining quantitative, not qualitative, factors of "unmet demand."

Diversity is the key to economic and political evolution.

by Cat on Sat Jul 6th, 2019 at 01:44:21 PM EST
[ Parent ]
"Public interest is identical to private interest."
A modern competition [sic] policy. The economy ministers of Poland, France and Germany, met in Poznan on Thursday to discuss EU competition rules. Following the Alstom-Siemens failed merger, the three countries said the EU should be more flexible when it comes to mergers in the EU in order to compete with China [for WHAT? WHY?].

In a joint paper, the countries said the EU Commission [!] should take into account [!] competition at global level but also ensure that the "political demands from the Council [!] are heard". (EURACTIV.fr

Unpack payment (type ±) between the state and firms from process (firm competition) for (WHAT?). Then determine WHO? owns WHAT? --exclusivity of property "rights".

Diversity is the key to economic and political evolution.
by Cat on Sat Jul 6th, 2019 at 05:02:09 PM EST
[ Parent ]
to fossil fuel producers

Diversity is the key to economic and political evolution.
by Cat on Sat Jul 6th, 2019 at 05:05:07 PM EST
[ Parent ]
Carbon drawdown resources:
 http://drawdown.org - 100 methods of carbon drawdown and Drawdown 2.0 is said to be on the way
https://www.crcpress.com/Geotherapy-Innovative-Methods-of-Soil-Fertility-Restoration-Carbon-Sequestr ation/Goreau-Larson-Campe/p/book/9781466595392 - probably the first peer-reviewed text on geotherapy, using existing ecological systems to repair the damage homo sap sap (the sap) has done
http://bio4climate.org - conference proceedings on a variety of different methods of geotherapy including not only soil carbon sequestration but freshwater and ocean geotherapies and biodiversity strategies
http://soil4climate.org - specifically on soil sequestration with a focus on grasslands and grazing to draw carbon out of the sky

Solar IS Civil Defense
by gmoke on Sun Jul 7th, 2019 at 12:58:37 AM EST
[ Parent ]
Thank you for reminding your readers, again, of GHG emission mitigation and alternative technologies which do not enjoy the full faith and credit of governments' subsidy awards. Episodic reporting over the years remains instructive in this respect.

WHICH candidates merit priority of services diverted from fossil fuel producers' transfer payments is the topic of another article.

POINT OF ORDER: agreement on the proposition, eliminate subsidy of fossil fuel production, is a prerequisite for alternative gov policy goal and admin of public interest.

If this comment section is indicative of prevailing cost aversion ...

Diversity is the key to economic and political evolution.

by Cat on Sun Jul 7th, 2019 at 06:16:03 PM EST
[ Parent ]


Diversity is the key to economic and political evolution.
by Cat on Tue Jul 9th, 2019 at 04:08:24 AM EST
[ Parent ]
It IS 2019 and monumental sequestration IS already a dire necessity. I recommended 5 and 10 year timelines because that is the minimum likely required to perform the transition. I do not see accomplishing those goals to be either plesant or graual. I just hope they are technically feasible. Outlawing fossil fuel after 2021 would just crash the economy. By 2026 it could be feasible if we have built enough renewable infrastructure. That would be $Trillions of infrastructure in five years.

We have been in the territory that requires massive removal of existing carbon from the ecosphere ever since we failed to act seriously in the 1990s. Meanwhle we still have a denialist federal government under Trump until at least Jan of 2021. IF we get a chance to even try saving the ecosphere we dare not blow it, crash the economy from a massive energy shock and risk a reaction that will surely doom subsequent generations.

We have to go carbon negative as soon as possible and keep right on getting more and more carbon negative as fast as we can. Even then there are no guarantees we will hold warming at even 2C. We have been screwed by denialist and gradualist politics.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jul 7th, 2019 at 02:58:31 AM EST
[ Parent ]
Budget Control Act of 2011 Reality Check: "hysteria" and magical MMT limit US policy options

US government faces potential default in Sept.

the Congressional Budget Office estimated that the government posted a budget deficit of $746 billion for the first nine months of fiscal year 2019, on track to approach or top $1 trillion. Revenues were $69 billion higher and federal spending was $208 billion higher over that period.
locating "sequestered" fossil fuel expenses and payments
The new estimate echoes warnings from Treasury Secretary Steven Mnuchin, who is the lead Trump administration negotiator in talks on a bipartisan deal to lift the government's borrowing cap and prevent automatic budget cuts from hitting the Pentagon and domestic agencies.
automatic Pentagon and "select" agencies top-up
Both Pelosi and McConnell vow that the government won't be allowed to default, but both also wish to link the debt limit issue with a concurrent effort to set new spending "caps" for the agency budgets that Congress sets every year.
[...]
The deadline for risking a debt default is imprecise since it depends on shifting revenue estimates and when the government needs to post major outlays. It's still most likely that the so-called X date wouldn't fall until October, but a shortfall in early September is at least possible.
US Joint Select Committee on Deficit Reduction: "Except for the five public hearings, the committee proceedings comprising the majority of the negotiations and counter-offers will remain sealed for 20 years under current rules". 2031

Diversity is the key to economic and political evolution.
by Cat on Tue Jul 9th, 2019 at 07:19:59 AM EST
[ Parent ]
Where's the graph for "nobody does anything, and emissions keep rising until we all die?" That would be the one with the strongest predictive weight.
by Zwackus on Mon Jul 8th, 2019 at 06:58:22 AM EST
[ Parent ]
That would be this one:

by asdf on Mon Jul 8th, 2019 at 03:08:34 PM EST
[ Parent ]
Also note that long-term sea level rise estimates vary between 50 and 90 meters. The temperature graphs level off, but the sea level graphs still have steep upwards slopes even if you go out to 2300. We will all be dead by then.
by asdf on Mon Jul 8th, 2019 at 03:17:38 PM EST
[ Parent ]
Also, I keep reading about how new research suggests that extant sea-rise models are far too conservative.

Sea level rise could be even worse than we've been led to expect

by Zwackus on Tue Jul 9th, 2019 at 07:20:03 AM EST
[ Parent ]
Almost all climate change estimates are too conservative.  As a layperson who has been following these issues since the 1970s, this is something I realized nearly 30 years ago.  It is only now that climate scientists themselves, I observe, are beginning to realize themselves (or is it just say publicly).

Solar IS Civil Defense
by gmoke on Tue Jul 9th, 2019 at 06:52:42 PM EST
[ Parent ]
Catastrophic collapse of the Greenland ice cap could occur within 100 years, by itself raising sea levels by ~ 30'. That would make almost all coastal cities in the USA non-viable. Due to ocean floor morphology this effect will be worse on the US Atlantic seaboard than in Europe, but still it would be catastrophic for much of coastal Europe.

Current estimates of around 3 feet of sea level rise by 2100 are based on assumptions that the Greenland ice sheet will meld in the same way as an ice cube on a saucer melts. That is obviously an unsound, if soothing, assumption. Gravity plays a major role with ice sheets, as does melt water streams cutting through and under glaciers.


"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 9th, 2019 at 07:04:41 PM EST
[ Parent ]
I am NOT advocating "stiffing the fossil fuel industry."  I wanted to get an idea of the scale of what we spend on fuel and see what that might mean in advancing the idea of a renewables transition.  An orderly transition would be much more preferable than a guillotine cut but, if we are to transition to a renewably powered future, then the fossil fuel industry, by and large, is going to shrink dramatically if not completely vanish.

One way to create the orderly transition would be to examine and reduce wherever possible the subsidies now going to fossil foolishness.  It won't happen, of course, because the political will is not there yet but somebody with expertise in the field should make the effort and begin imagining what that might be.

The fact of the matter is that every wind turbine and solar panel is reducing the market share of fossil foolishness (and nuclear power).  I'd also like to see any discussion of carbon pricing include the economic reality of today's subsidies to fossil fools but that is probably asking for too much.

Solar IS Civil Defense

by gmoke on Sun Jul 7th, 2019 at 12:54:43 AM EST
[ Parent ]
I never thought YOU were. I would just prefer to get started building renewable energy ASAP and think this can best be accomplished by just doing that and leaving fossil fuel subsidies alone until we have enough  renewabel energy to be self sufficient without fossil fuel.

Economically, the benefit of having no fuel cost is ALREADY driving fossil fuel out of the market. But there are frictions, like the time required to convert transportation to renewable energy, the time to convert industrial processes to renewable energy and the time to develop sufficient recycling technology so as not to exceed resource limitations.

Learning to prosper in a world with a declining population is also a necessity - unless we wish our children and grandchildren to be part of a giant involuntary population reduction.


"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jul 7th, 2019 at 03:09:01 AM EST
[ Parent ]
to be self sufficient without fossil fuel

is not the goal implied by the proposition offered in this article or indeed the supposition, GREEN NEW DEAL. Certainly self sufficiency appears to be an inappropriate attitude for integral regulation of international investment and capital formation. Please, elaborate.

"Leaving fossil fuel subsidies alone" is the null hypothesis of government policy for a large number of nation-states, irrespective of the Paris accord. Adding discriminatory incentives (commercial or transfer payments) to fossil fuel preference policy has not produced statistically significant change in rates of adoption of alternative fuel industries (upstream and downstream) over the prior 40 years. Controversy in Germany over coal, nuclear decomission, solar FITs, LNG  FDI is one highly visible case study on point. USA commitment to any is simply incoherent and disregarded.

Setting aside tendency for misplaced precision in industrial surveys and research bias manifest in select regional output surveillance and crazy IMF USD debt marketing to sovereign governments to fund fossil fuel subsidies, over all, PPM has increased to 413.

I infer, "leaving fossil fuel subsidies alone" neither impedes production and consumption nor facilitates alternative fuel production and consumption. I conclude: fossil fuel subsidy is a barrier to goal attainment.

Diversity is the key to economic and political evolution.

by Cat on Sun Jul 7th, 2019 at 05:17:33 PM EST
[ Parent ]
Paying for a Green New Deal and a maximum effort to minimize climate change is not really the problem. The world is teetering on the edge of recession at present in no small part due to the economic orthodoxy of tight money and austerity in Europe and the USA. Aggressively pursuing a Green New Deal would change that dynamic and put the economies of those following such a plan into a growth mode. Growth will provide additional resources to support the endeavor. That growth largely needs to be channeled into social overhead capital rather than personal consumption.

The renewable energy investments would be self liquidating and profitable due to the reduction in cost of energy they would bring. To quell deficit hysteria it might be wise to form a federal agency tasked with issuing bonds at rates around 2% with interest returning to the US Treasury. Injection of more than $1Trillion per year in GND projects would boost GDP and employment growth as it would be investment in real assets, vs. money supplied simply for stock buy backs and asset speculation. With broader understanding of economic possibilities these investments could simply be deficit financed.

The challenge then would be to encourage the additional income derived from this activity to go into buying new products that have low carbon emissions, such as electric vehicles, energy efficient housing, education and cultural activities. We would want to see longer design lives for durable consumer goods so as to amortize the carbon costs of their manufacturing over a longer time period. And we need to reduce the waste involved in the sale, distribution and consumption of food and clothing.

But all of the above is conditional on wresting control of the US Government from Republicans and diluting the influence of 'centrists' in the Democratic Party. When we can start such programs depends on how much political power changes and how quickly. We may not be able to pursue the most ambitions aspects of such a program until 2022, if Republicans and centrist Democrats retain too much control after 2020. Even with a Democratic Senate in 2020, unless the Senate majority is in the mid to high 50s pushing through a bill to end fossil fuel subsidies will likely be a non starter. That is not to say we should not do so at the earliest real opportunity.

But just having control of the House and the Presidency allows significant progress. Regulations and regulators that Trump has changed can be changed back and some aspects of a GND could be started. The fact that the climate won't wait just increases the extent to which our efforts have to go when we do get the chance.

Politics is the art of the possible. That does not well comport with the urgent needs of the ecosystem.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 8th, 2019 at 05:59:10 PM EST
Reading The Fifth Risk by Michael Lewis now, an examination of the Trmp transition to government.  The first thing, the FIRST thing Trmp's transition people asked the Department of Energy and Department of Agriculture about was the names of people doing climate change work in order to stop them.  Trmp is supporting the carbon bubble with the help and probably at the behest of both Putin and Mohammed bin Salman, leaders of two countries which depend upon fossil foolishness in order to survive.  Getting rid of Trmp will not get rid of either Putin or MSB, both of whom are committed fossil fools and keeping the carbon bubble floating.

Transferring a trillion a year (in the USA) from burning fuels to building renewables would be a very good thing but not likely.  However, that is the scale of the problem and my little exercise has enabled me to measure it, something I haven't seen from any of the "experts" I've watched over the decadess while attending public lectures on these subjects at Harvard and MIT.

Solar IS Civil Defense

by gmoke on Mon Jul 8th, 2019 at 07:16:50 PM EST
[ Parent ]
Trump doesn't have to be the stooge of international conspirators to be pro-oil. The US has been the biggest oil producer in the world since oil production became a thing, it is the home of the biggest multinational oil conglomerates, and whole areas of the country are devoted to oil and oil infrastructure support. Add the coal legacy to that, and tribal conservatives who will oppose anything the "libs" suggest on principle, and there is a large and important home-grown fossil fuel lobby just itching to shut down climate science. Climate denialism was born in the US, after all.
by Zwackus on Tue Jul 9th, 2019 at 07:47:59 AM EST
[ Parent ]
BLOOMBERG | The U.S. Just Became a Net Oil Exporter for the First Time in 75 Years, Dec 2018
market share gain by sanction against competitive exporters

Diversity is the key to economic and political evolution.
by Cat on Sat Jul 13th, 2019 at 03:22:09 AM EST
[ Parent ]
Transferring a trillion a year (in the USA) from burning fuels to building renewables...is the scale of the problem and my little exercise has enabled me to measure it, something I haven't seen from any of the "experts" I've watched over the decades...

To paraphrase Upton Sinclair: "It is hard for a man to measure something if his livelihood depends on him not being able to measure it." Trump's >$1Trillion tax gift to the 0'1% has done one good thing. It has clearly demonstrated that the USA CAN make expenditures on that scale. The task then becomes convincing the electorate that making that scale of expenditure, but on a Green New Deal, is a much better use of the money.

The first argument is that our descendants are doomed if we do not. 'How would you like your great grandchildren? Baked, broiled, boiled or fried?' The next argument is that a Green New Deal instead of fossil fuel subsidies will be vastly more beneficial to the average citizen as mobilization for such a project will end austerity and bring prosperity back to ordinary people by offering them well paying jobs to perform needed tasks. The third argument is to ask them where they suppose their great grandchildren are going to live? Is where they currently live more than 230 feet above sea level?

A fourth argument is subversive of our current understanding of economics. We do not have to choose between abandoning fossil fuels immediately or losing the climate for future generations because of affordability. How did we afford to fight WW II?

Our economy has been limping along because we have allowed economics to be defined by academics who have been bought by billionaires. Money clearly does not work the way it is described by Mainstream Economics. Trump's tax cut for the rich is about the same size as are the needs to finance a Green New Deal, and we have not yet seen high inflation; so do both until we start to see inflation, and then cut the tax break and the subsidies to fossil fuel. What do you fear - prosperity?

And the fifth argument is that the abundant oil from fracking is not now sustainable. Fracking has destroyed capital since the boom started. Wells don't last long enough after being drilled to pay for the cost of drilling. They need to be re-drilled after a few years with new capital. And every reasonable prospect is that this will get worse and that the US will cease to be either an exporter of fossil fuel or even self sufficient in fossil fuel at any price, monetary and environmental, we are able to pay. So it is vastly better to transition to renewable energy while we still can.

Carrots and sticks.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 9th, 2019 at 03:41:53 PM EST
[ Parent ]
How did we afford to fight WWII?

JM Keynes wrote a book about that back in 1940.  It was one of the references mentioned at that Harvard Law School conference and suggested as a method of funding the Green New Deal.

Wikipedia article on the book:
https:/en.wikipedia.org/wiki/How_to_Pay_for_the_War:_A_Radical_Plan_for_the_Chancellor_of_the_Exche quer

Full text:
https:
/archive.org/details/in.ernet.dli.2015.499597

Solar IS Civil Defense

by gmoke on Tue Jul 9th, 2019 at 07:00:20 PM EST
[ Parent ]
The consensus view in US Mainstream Economics is that the Stagflation of the '70s discredited Keynes. That is a lie that has been promoted by propaganda spread by media owned by conservative billionaires and taught in countless universities, but it is the common view of those who have even taken introductory economics.

Keynes' discussion in The General Theory about the 'euthanasia of the rentier class' was taken very seriously by the wealthy. Stanford economist Laurie Tarshis sat in on lectures by Keynes in the '30s in England. After WW II he wrote Elements of Economics, an excellent introduction to economics based on Keynes' thinking. William Buckley led the charge against him and stirred up Joe McCarthy who further denounced Tarshis. Elements of Economics became radioactive.

Samuelson introduced some analytical techniques devised by followers of Keynes, Hick, Hanson and Phillips, as what became known as the Samuelson Synthesis in his introductory text 'Economics' in 1948. It was that version, especially the Phillips Curve, that was demolished by stagflation. The Phillips curve was based on assumptions of relatively closed national economies.


"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jul 9th, 2019 at 07:33:06 PM EST
[ Parent ]
we have here is a failure to communicate.

What is a subsidy? It is a gift from government treasury to an individual or corporate person. It is a grant. The meaning of grant and subsidy are identical.

A fossil fuel producer which receives a subsidy does not repay any amount of the subsidy. Accordingly, no one pays interest in return receipt for the subsidy received.

A renewable fuel producer which receives a subsidy does not repay any amount of the subsidy. Accordingly, no one pays interest in return receipt for the subsidy received.

Is a subsidy payment to a fossil or renewable fuel producer a financial investment?
No.

How do fossil and renewable producers spend their subsidies?
That is an excellent question. The answers pertain to merits of subsidy for either venture and may or may not be ascertained from information provided by recipients in financial statements, as required by SEC regulations or statute governing subsidy disbursement, for relevant reporting periods. Guessing might be more entertaining.

Who pays for a subsidy received by a fossil or renewable fuel producer?
The amount is drawn from current accounts of government income collected from foreign and domestic persons --individual and corporate tax returns, interest income from (un)marketable securities in custody of the FRB, penalties and fees, and proceeds of treasury bonds sales by government-- in the fiscal year budget(s) for which legislators itemize payment of the subsidy.

Is "growth" a transaction entry recognized by GAAP or GASB rules anywhere?
No.

"Growth" is a euphemism for the rate of earned income (sales, revenue) and unearned income (interest income) collected over time (reporting period) by a commercial firms.

Is a government a commercial enterprise?
Some people might believe, the most important purpose of government is financing commercial and war adventures. Legislators do appropriate funds for executive agencies to lend money to commercial firms operating in selected industries. Borrowers repay loan principal plus interest at a rate less than prevailing interest demanded by commercial lenders. Every subdivision of a government relies on subsidy to provide numerous, local public benefits.

Diversity is the key to economic and political evolution.

by Cat on Tue Jul 9th, 2019 at 03:31:10 AM EST
[ Parent ]
$5B on wars in the Middle East over about a dozen years is no problem, though
by asdf on Wed Jul 10th, 2019 at 06:16:22 PM EST
Well, after all, war is the health of the state, isn't it?

Solar IS Civil Defense
by gmoke on Wed Jul 10th, 2019 at 07:04:13 PM EST
[ Parent ]
US military is a bigger polluter than as many as 140 countries - shrinking this war machine is a must
In 2017, the US military bought about 269,230 barrels of oil a day and emitted more than 25,000 kilotonnes of carbon dioxide by burning those fuels. The US Air Force purchased US$4.9 billion worth of fuel, and the navy US$2.8 billion, followed by the army at US$947m and the Marines at US$36m.

It's no coincidence that US military emissions tend to be overlooked in climate change studies. It's very difficult to get consistent data from the Pentagon and across US government departments. In fact, the United States insisted on an exemption for reporting military emissions in the 1997 Kyoto Protocol. This loophole was closed by the Paris Accord, but with the Trump administration due to withdraw from the accord in 2020, this gap will will return. ...



Diversity is the key to economic and political evolution.
by Cat on Sun Jul 14th, 2019 at 07:35:19 AM EST
[ Parent ]
The USA military has also been one of the test beds for renewable energy with a wide variety of ideas like renewably powered forward bases, hydrogen vehicles, green jet and naval fuels, and permanent large-scale  renewably powered neighborhoods in both Texas and Hawaii, among other places.

Not to take exception with your justified criticism which is accurate and on point.

It's the nature of our complicated reality that the profligately wasteful military gushes fossil foolishness it is also helping to make renewables practical and affordable, all at the same time.

I remember an article in Rolling Stone magazine back around 1974 in which Tom Hayden, then with the Solar Lobby, arguing that the Department of Defense could prime the pump for renewables by replacing remote diesel generators with wind and solar.  It was a good idea and is actually, slowly but surely, becoming real.

But then, "Let's blow up an Iranian oil refinery," may not be a remote possibility under the Trmp administration.

Solar IS Civil Defense

by gmoke on Mon Jul 15th, 2019 at 10:46:51 PM EST
[ Parent ]
I have been asked by the French chapter of the Union of European Federalists to write an article on DiEM25's version of a Green New Deal.

I suspect I will write it as a diary here, in the next couple of weeks.

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Fri Jul 12th, 2019 at 11:06:56 AM EST


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