STAFF NEWS & ANALYSIS
Elite Rewind: Green Best for Jobs
By Staff News & Analysis - February 27, 2010

In Bali, 130 governments quite rightly agreed that low-carbon growth offers a better future than the oil-soaked present, says Geoffrey Lean. I don't know what the opposite of Groundhog Day might be, but whatever it is, I have been experiencing it for the past week in Bali. As the world's shell-shocked environment ministers met for the first time since December's chaotic climate summit in Copenhagen, everything was the same, and yet different … The most important difference was in the discussions. Climate change dominated the agenda – but instead of concentrating on its negative side, such as emission cuts, the ministers focused on the positive, namely how making economies greener could bring low-carbon prosperity. Low-carbon prosperity? It seems an oxymoron, and one guaranteed to boil the blood of many climate sceptics and energy companies. For more than 200 years, after all, economic growth has been founded on the burning of more and more carbon-dioxide-emitting fossil fuels. But things change. Low-horse-dung prosperity must have seemed just as improbable a dream when transport emissions came from backsides rather than exhausts. Now, however, it is high-carbon prosperity that looks increasingly unlikely. Oil prices are on a rising trend, despite the recession-induced dip: the International Energy Agency predicts that they will eventually hit $180 (£115) a barrel, more than double today's level. As supplies get scarcer, so will energy security, as our dependence grows on a few, often unstable, parts of the world. The amount oil available is expected to peak over the next 25 years (and probably much sooner), with catastrophic effects on economies that still rely on it. And that is to ignore the risks from climate change. – UK Telegraph

Dominant Social Theme: Even if the climate isn't warming, pretending it is will help employment worldwide.

Free-Market Analysis: Here at the Bell we cover power elite dominant social themes. Now there are plenty of people who may not believe in them. They may find it hard to fathom that over the past hundred years or more, a mostly Anglo-American elite has built a nearly seamless structure of think tanks, government agencies, non profits, external research authorities, educational establishments and media structures to promote fear-based themes that centralize control and generate wealth for a mere handful.

But in the article excerpted above, one can actually see the reconstruction of the global warming meme along different lines than before. Perhaps there is no global warming, but those in charge are not about to discard the idea of a greener future. Meanwhile, those who believe that these constructions are merely serendipity and that the world operates haphazardly might conclude that the discussions at Bali are just the rhetoric of concerned politicos. No, these are marching orders, we think. And we will bet it is not too long before we may all be reading factoids in major publications about how going green produces jobs and is an antidote to a world running out of oil.

Yes, of course, the hoary "peak oil" meme is waiting right behind the damaged global warming one, like the next bullet in a gun. We are running out of oil, dear reader, and only the combined wisdom of a worldwide bureaucracy can save us from starving in the dark.

And so we ask: Whatever happened to the free market? One more expensive conference burns up loads of precious "fossil" fuel and for what purpose? Would not these esteemed politicos agree that the market itself will provide solutions to scarcity? Why does the combined might of the world's most important leaders need to muster yet again to discuss lagging energy resources? And how do they know anyway? They apparently got global warming wrong. Why is it necessary to believe they have peak oil right?

Free-market economics is very clear about this. Adam Smith's invisible hand shows us that competition not governmental dictates will provide the plenty that humans need to live better lives. Marginal utility gives us an unimpeachable understanding of how regulations work – they are price fixes, and price fixes inevitably result in inefficiency, queues, scarcity and misallocation of resources. Here's some more from the article:

In 2008, for the first time, investment in solar and other renewable energies exceeded that in oil, gas and coal, while green technologies attract the third highest amount of venture capital in the United States after IT and biotechnology.

More than one dollar in every seven invested in stimulus packages worldwide has gone on green investment – rising to a full third in China and more than four fifths in South Korea. Both countries believe, as Lee Myung-Bak (pictured above left), the South Korean president, puts it, that "those who take the first actions will reap the fruits of the new green world", and aim to outstrip the West in what they see as the next technological revolution.

Green technologies also seem to provide plenty of jobs. Exploiting renewables now employs 2.3 million people worldwide, more than the entire oil and gas industries, even though they contribute a small fraction of the amount of energy. They provide several times as much work per dollar invested than fossil fuels, with other green measures like recycling and saving energy proving even more job-intensive. And clean technologies are increasingly driving invention and innovation, one of the chief forces behind economic growth.

Did you catch that dear reader? It's in the last paragraph above and it's a howler. "Exploiting renewables now employs 2.3 million people worldwide, more than the entire oil and gas industries, even though they contribute a small fraction of the amount of energy. They provide several times as much work per dollar …" Let's unpack that a bit. Alternative energy is far more inefficient than oil and gas and thus creates more jobs! This is actually the "broken window fallacy" – that the more destruction is done in society the more prosperous society will become as it repairs the damage.

But let's take it further. Using this logic, the more inefficient an industry, the more people employed! By this token, if everyone was employed by the government, the world would be awash with wealth – as government produces absolutely no products or services that cannot likely be accomplished better by the private sector. It is the most inefficient of entities and therefore the best qualified, according to this logic, to hire scads of people.

NOTED: Head of IMF Proposes New Reserve Currency … Dominique Strauss-Kahn (left), the head of the International Monetary Fund, suggested Friday the organization might one day be called on to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar. "That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now," he said in a speech on the future mandate of the 186-nation Washington-based lending organization. Strauss-Kahn said such an asset could be similar to but distinctly different from the IMF's special drawing rights, or SDRs, the accounting unit that countries use to hold funds within the IMF. It is based on a basket of major currencies." – ABC News [Ed note: it's uncanny isn't it? Just yesterday in an article on Jim Rogers and the pound, we wrote the following: "What would happen if the pound crashed? It would probably set off a real economic realignment globally. … Let the power elite emerge from a "crisis meeting" and announce the formation of a comprehensive IMF currency to take the place of the dollar and see what happens. It wouldn't be greeted with the kind of respectful awe that Bretton Woods inspired." … OK, now we shall see! This follows on the heels of our prediction that a violent incident of American protest would be used by the powers-that-be to tarnish the tea-party movement and free-market Congressman Ron Paul. In fact, the very next day a plane crashed into an IRS building in Texas and Time Magazine immediately rushed to smear freedom loving Americans. Dear reader, you can be a prognosticator too! Just read the Bell and follow along with the memes of the power elite. It's not hard.

After Thoughts

We truly live in a dark age (though one that is increasingly shot through with light thanks to the Internet). In this article alone we see direct contraventions to the fundamentals of economic science that are available throughout the world. Marginal utility, the invisible hand, the broken window fallacy all are contravened in a single story produced and presented by a distinguished international newspaper. That the author seems to believe in what he is writing only makes it worse. And even more depressing is the thought that Bali is a warm-up for yet another great, green roll out. Take that and rewind it back, Ludacris sings.

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