Friday, May 22, 2009

'Big Green" stands to profit

Another powerful interest group using politicians to pick our pockets.



Some business leaders are cozying up with politicians and scientists to demand swift, drastic action on global warming. We are told that very expensive carbon regulations are the only way to respond to global warming, but what we should ask is whether a "climate-industrial complex" is emerging, pressing taxpayers to fork over money to please those who stand to gain, says Bjorn Lomborg, director of the Copenhagen Consensus, a Danish think tank.

Naturally, many CEOs are genuinely concerned about global warming. But many of the most vocal stand to profit from carbon regulations. The term used by economists for their behavior is "rent-seeking":

The world's largest wind-turbine manufacturer, Vestas, urges governments to invest heavily in the wind market and fellow council member, Generation Investment Management, warns of a significant risk to the U.S. economy unless a price is quickly placed on carbon.

European energy companies made tens of billions of euros in the first years of the European Trading System when they received free carbon emission allocations.

U.S. companies and interest groups involved with climate change hired 2,430 lobbyists just last year, up 300 percent from five years ago, and 50 of the biggest U.S. electric utilities spent $51 million on lobbyists in just six months.

However, the massive transfer of wealth that many businesses seek is not necessarily good for the rest of the economy, says Lomborg. In Spain, which has been proclaimed as a global example in providing financial aid to renewable energy companies to create green jobs, each new job cost 571,138 euros. The programs resulted in the destruction of nearly 110,000 jobs.
Further, the climate-industrial complex does not promote discussion on how to overcome challenges in a way that will be best for everybody. Spending a fortune on global carbon regulations will benefit a few, but dearly cost everybody else, says Lomborg.

Source: Bjorn Lomborg, "The Climate-Industrial Complex," Wall Street Journal, May 21, 2009.

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