Unilateral US Decarbonization Could Have Serious Economic Consequences

The current unilateral US decarbonization proposals by various Democrats promoting the Green New Deal (GND) climate schemes suffer from two particularly crucial assumptions that they have made. One is the extremely doubtful assumption that CO₂ levels determine temperatures as opposed to temperatures determining CO₂ levels. The assumption being made is that it is the atmospheric CO₂ level that is the critical determinant of temperatures. If this is wrong, as I believe it is, any dollar spent on decarbonization will provide no benefits in terms of global temperatures.

Another important assumption is that China, India, and other less developed countries (LDCs) will soon stop building coal fired power plants, which they are currently doing at a rapid rate. If they continue to build them rapidly, minor decreases in CO₂ emissions from the developed world will not make any significant difference even if CO₂ levels determine temperatures.

I see no reason why India, China, and the other LDCs will or even should reduce their CO₂emissions any time in the foreseeable future. So all that will happen is that the developed world will pay more for electricity using high cost, unreliable “renewable” sources of energy like wind and solar while LDCs will pay less by using much cheaper and more reliable coal plants. So there will be a transfer of wealth and comparative advantage to the LDCs from the developed countries. In the case of China this would be highly disadvantageous to the US since China is the leading economic competitor to the US. If the US pays more for energy while China pays less, the US will be put at a significant economic disadvantage. But this is exactly what the US Democratic Party currently advocates.

So the proposed emissions of CO₂ contained in many of the Democratic proposals for US decarbonization would have a profound adverse effect on the US economy. Even if the first scientific assumption should be correct (contrary to current science), it is more than likely that the second assumption is not. So there is no scientific or economic case for US and other developed nations’ efforts at decarbonization unless China, India, and other LDCs do likewise. The US advocates of this may be assuming that these countries will in time come over to the US and other developed country viewpoint. I find this to be extremely unlikely.

China and India Have Every Incentive to Continue Building Coal Plants

The Modi Government in India has set out to provide affordable, reliable electricity to every home as one of their important electoral promises. India has abundant coal but little natural gas and oil and a need for continuous electrical energy. Their future electoral prospects depend partly on whether this promise is fulfilled. The Chinese Government also believes that continuing rapid economic development is essential for the continuation of the Chinese Communist Party in power. Coal is abundant and inexpensive. Other LDCs recognize the importance of energy availability growth to make economic progress for their countries. It is the US Democratic Party and many developed countries that are making the profound error in assuming that China, India and other LDCs will come around in time to decarbonization. There is nothing in the Paris “treaty” that will prevent the LDCs from continuing to do what they are doing in terms of rapidly increasing CO₂ emissions.

Carried to an extreme, as most of the GND-like proposals are, the damage to the US could be so great as to dictate an adverse economic outcome for the US compared to the rapidly growing LDCs, paricularly China, in the long term economic world economic sweepstakes, leaving the US and other developed nations as much more minor players in the world economy than now. This currently appears inconceivable, but radically changing the price or usefulness of a key economic input such as energy could conceivably have such an effect if half of US output is unilaterally devoted to GND as proposed in the GND. Europe’s economic strength has already been weakened by their decarbonization efforts in this way. Is this what the Democrats want to bring to the US?