José Manuel Suárez Mier*
The absurd proposals to entrust central banks with fighting global warming by “greening” the financial system, which I have dealt with in this column in the last installments, extend to the entire productive apparatus, which if achieved would bring about a debacle.
The green fuss is based on false premises that, despite reiterating that their conclusions come “from what science tells us,” is a hoax: asking scientists what to do to keep warming below an impossible goal forces them to propose absurdities.
For example, Joe Biden announced that he will “support market demand” for electric vehicles (EVs) “by fueling” it with “point of sale incentives” to “encourage deployment.” Translated into Christian, it is about manipulating markets with subsidies to lower the price enough to manufacture the volume of EVs that the government wants.
Biden also wants $ 15 billion to build half a million stations to charge EVs, ignoring that when vehicle sales tripled in the 1920s to 23 million, without subsidies, the private sector built enough gas stations without government support.
Today the federal government is giving away $ 7,500 to the buyer of the EV, which can be doubled with state support. Who benefits from these gifts? The rich, since only 1% of these aid reached households with incomes of less than 50 thousand dollars a year. When the subsidies are canceled, the demand collapses, as happened in Georgia, where it fell 90%.
The correct numbers of low pollutants from using EVs make their virtue disappear since the large batteries they use come from China, produced with intensive use of coal. Its manufacture generates 25% of the gases that a normal car will produce in its entire useful life.
Climate catastrophism ignores the enormous advances of humanity in almost all areas in recent decades, thanks to the accelerated economic growth achieved, in large part, thanks to abundant and cheap energy.
If nothing is done to mitigate climate change, its reduction in economic growth would be 3.6% of global GDP, including the costs of stronger storms, additional deaths from heatwaves, loss of coastal wetlands, and protection works due to elevation sea level.
This means that instead of the average per capita income increasing by 450% this century, they would do so “only” by 434% by 2100, which is serious but far from catastrophic. As recently stated by the UN Panel on Climate Change:
“For most economic sectors, the impact of climate change will be small relative to the impact of other causes, such as changes in demographic profile, income, technology, relative prices, lifestyles, government regulation, governance, and other aspects of socio-economic development.”
Fighting climate change foolishly, as countries trying to fulfill their commitments in the Paris Agreement do, will be very expensive and can stall global economic growth, which is the essential ingredient for improving the world’s standard of living.
*Consultant in economics and strategy in Washington DC and professor at universities in Mexico and the US. Email: aquelarre.economico@gmail.com
This column is also published in Spanish on June 18, 2021, in the Excélsior newspaper, based in México City.