Greens must step away from Bill McKibben’s–and many others–embrace of the macroeconomic approach which is leading straight toward climate disaster

20 Nov Greens must step away from Bill McKibben’s–and many others–embrace of the macroeconomic approach which is leading straight toward climate disaster

by Ed Newbold

posted from Seattle, WA, Dec. 27, 2024.

Bill McKibben, a person with immense accomplishments, a stellar individual who cares as much about this Earth as anyone on it–this is not personal! (Photo by Gage Skidmore courtesy of Wikicommons.)

DISCLAIMER–this is not an attack on Bill McKibben, a tireless activist with immense achievements who is a talented writer, an excellent organizer, and very prescient and caring about our world. My only critique involves which economists he listens to. Also, I chose Bill McKibben precisely because his credentials are pristine, nobody would accuse him, as they might others, of having an ulterior motive. Look at this guy’s life–he cares about the future of our world. But more than anyone he embodies the embrace by environmentalists of a strange sort of economics promoted by many macroeconomists that says we must replace fossil fuel production with clean energy and then we will be on our way to solving climate change. I could have chosen Paul Krugman, the New York Times columnist, as he is one of the macroeconomists pushing this approach, but it’s the environmentalists, not the economists that I have a bone to pick with.

So what is it the Greens and Macroeconomists–and McKibben–believe that so bothers me? Here, in Bill’s own words…

While doing many great and wonderful things in opposition to fossil fuels and climate change, McKibben has adahered consistently to the macroeconomic line on climate change–which is essentially to say that the way to defeat climate change is to increase clean energy. In a recent fundraising letter for one of his organizations, 350________, McKibben put it this way: ” in Africa, in the Amazon, in Canada and elsewhere — 350 has been pushing hard for development and expansion of renewable power.”

As Bill McKibbon, a proponent of this view, told TV and radio journalist Amy Goodman on July 7, 2023 in an article published in the NY Review of books: “…We understand that we need to increase very quickly the amount of green and clean energy we are producing.”

But wait a minute. Anyone might be forgiven for wanting to know how that scenario is going to work. What will ramping up renewables achieve? Amy Goodman asked that very question, although she then immediately deferred to McKibbon’s extremely lame answer. Here’s how that went:

Goodman:  “Does expanding renewable energy necessarily lead to a reduction in fossil fuel use? Recent data shows 82% of our energy came from fossil fuels even as record amounts of wind and solar came on line.”

In a corner, McKibben needed an answer here and this is what he said: “We’re going to find out in the next couple of years, and …It has to. Renewable energy is at this take-off point. It’s suddenly becoming substantial. And it has to reduce fossil fuel use if it’s to matter.”

There is the non-answer of the century to the most important question of the century.

McKibbon went on to add, “That’s why people were so upset when President Biden, who has done so much to sponsor renewable energy, also has started approving things like the Willow Project in Alaska or the MVP Pipeline in Appalachia. Or this new string of LNG ports along the Gulf Coast. Politicians are getting better at saying yes to renewable energy but they are no better at saying no to fossil fuel than they were before.”

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The reason the “clean energy buildout” doesn’t work is so simple only macroeconomists fail to see it

Macroeconomists, like their founder, John Maynard Keynes, and like all of us to some degree or another, are idiot-savants. Brilliant in so many ways, they have thrown out old-school economics and convinced themselves of the theoretical truth of what certain politicians want them to say, that relatively politically-painless subsidies and a mandate here and there can bring climate-pollution down. It was similar to what Keynes said when he was on more solid ground in the 1930s and old-school economists were adrift. Keynes was right to say the world wouldn’t end if government borrowed some money and handed over to those in dire need. All this while Frederick Hayek, a leader of the Austrian school was giving lectures telling politicians to wait out the depression, bad economics and bad poltics, but no reason to throw out all the teachings of the Austrian school.

But subsidizing one product will not cause the demand for another product to wither away. My favorite analogy, which I’ve used before, is crullers. No matter how much the federal government builds Cruller bakeries and lowers the price of crullers, there will still be a demand for donuts, and the demand for donuts is like to confound the cruller-supporters by even going up.

So who are these macroeconomists I’m talking about?

I’ll start with Paul Krugman, who might be appropriate since he’s most definitely a self-described macroeconomist and he has won the Nobel (actually not technically a Nobel Prize) for it. Paul has written this (I will find the quote ) UNDER CONSTRUCTION

Why Capitalism hasn’t been able to solve climate change

The problem of climate change could hardly be simpler from a theoretical economic perspective. It is the problem of externalities. This problem was first described and dealt with in the economic literature by A C Pigou, I believe, who was coincidentally the economist who wrote the rebuttal to J M Keynes earthshaking book __________ (forgetting) upon its publication.

Externalities are costs external to the market, i.e., a cost imposed by the selling of a good that is not paid by the buyer or the seller of the good.

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