'Green New Deal' Is a Raw Deal for the U.S. Europe's Path Deeply Inhuman, Economically Destructive

Article excerpt


The financial crisis and subsequent recession in the United States have prompted some to begin calling for a completely new kind of economy. This new economy would be based on environmental values, a so-called Green New Deal to be ushered in by President Obama and leaders in Europe. The plan includes cap-and-trade legislation, new spending on green jobs, subsidies for favored firms and technologies, and trade restrictions against out-of-favor products and industries.

The United States is the world's most crucial economic engine, and before it goes much further down this road, it might want to look at Europe's experience with a similar deal. It has done little to help the environment but much to harm consumers and the broader economy.

In Europe, green ideas have been in fashion for two generations and have driven policy to a much greater extent than in the United States. Despite this, we have not witnessed a sizable green wave of new jobs, as evidenced by our unemployment rates, which are routinely several percentage points higher than in America.

The green movement has succeeded in generating increased government spending and subsidies at taxpayer expense. Much of this spending has been directed toward inefficient renewable-energy projects, such as solar and wind power. In my own country, these subsidies appease Germany's mighty pro-green lobby, but they have done little to put downward pressure on unemployment, and their contribution to Germany's overall energy mix is small.

Germany, like the United States, is a major industrial and manufacturing powerhouse. It continues to rely on fossil fuels and will do so for a long time to come. There is no escaping this fact, no matter what the Green New Deal enthusiasts say.

To that end, it's important that Washington not make some of the mistakes we in Europe have made. Specifically, U.S. political and industry leaders should be careful not to follow Europe's path of buckling under to greenmail, which undermines sound policy and genuine sustainable economic growth.

Here is what has happened in Europe: Caving to pressure from alarmist environmental groups, European companies such as Carrefour, Metro AG and Unilever have elected to halt the purchase of certain food, industrial and paper products from developing countries. The green groups claim these products, made in Southeast Asia, Africa and Latin America, harm rain forests and other critical habitats.

However, several reputable studies show that nothing could be further from the truth. …