Can Green Sustain Growth? From the Religion to the Reality of Sustainable Prosperity

Can Green Sustain Growth? From the Religion to the Reality of Sustainable Prosperity

Can Green Sustain Growth? From the Religion to the Reality of Sustainable Prosperity

Can Green Sustain Growth? From the Religion to the Reality of Sustainable Prosperity

Excerpt

A simple question motivates this book: Can “green” sustain growth? The notion of “green growth” emerged as a justification for investments and policies intended to address the challenge of climate change. In that conflicted political environment, green growth was a powerful temptation: if climate policy can generate the jobs and productivity growth necessary to sustain rising incomes, then sustaining political support becomes much easier. We could act regardless of whether we agreed on bigger questions about the threat of climate change, the size of the damages it threatens, or the urgency of action.

To some, the answer to this question seems obvious: build the emissionsfree windmills and solar energy systems, and in one stroke we reduce carbon emissions and create jobs. But the reality is more complicated. Building out a new green energy system may provide temporary stimulus, but it is not immediately evident that it is the source of sustained growth. For now, “green” energy—energy that entirely eliminates or substantively reduces carbon emissions from energy production—usually costs more than traditional energy sources. This both annoys consumers and raises costs for producers, requiring them to adapt to new energy sources that otherwise offer them few advantages. Similarly, arguments that green energy sources generate more jobs than traditional sources per, for example, kilowatt-hour of electricity also imply that those jobs are less productive, requiring more workers to accomplish the same thing. There is, then, an economic price for green energy in the short term. Whether green can overcome these short-term costs to create growth is thus at present unclear. The present enthusiasm for it thus appears more religion— taken on faith—than reality.

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