Climate sense - Bjørn Lomborg in The Australian
Many green pundits have, however, started saying that the financial crisis only makes the need for action on climate change greater. They urge US president-elect Barack Obama to pursue a "green revolution" with big investments in renewable energy, arguing that this could create millions of new "green collar" jobs and open huge new markets.
Unsurprisingly, such sentiments are strongly voiced by business leaders who live off such subsidies. But are such pleas smart investments for society?
The problem with the green revolution argument is that it doesn't trouble itself about efficiency. It is most often lauded for supplying new jobs. But billions of dollars in tax subsidies would create plenty of new jobs in almost any sector: the point is that many less capital-intensive sectors would create many more jobs for a given investment of taxpayers' money.
President-elect Obama is now facing countless people who claim that subsidies for renewable energy and CO2 taxes are great ways to tackle global warming and forge a new green economy. Unfortunately, this is almost entirely incorrect. Taxes and subsidies are always expensive, and will likely impede growth. Moreover, if we really want to tackle global warming, we shouldn't spend vast sums of money buying inefficient green technology. We should invest directly in R&D to make future green technology competitive.
Read it all here.