The Great Hypocrisy of the Green New Deal

COMMENTARY Energy Economics

The Great Hypocrisy of the Green New Deal

Mar 5th, 2019 3 min read
COMMENTARY BY
Nicolas Loris

Deputy Director, Thomas A. Roe Institute

Nick is an economist who focuses on energy, environmental, and regulatory issues as the Herbert and Joyce Morgan fellow.
The economic pain of green cronyism cuts deeper than wasted taxpayer money. Bill Clark/ Contributor/ Getty Images

Key Takeaways

The Green New Deal isn’t just lousy policy. It’s incredibly hypocritical.

Higher energy costs hit low-income households hardest, because they spend a higher percentage of their budget on energy.

The Green New Deal doesn’t lead to more economic security and justice. It leads to greater economic strain, with low-income families being stressed the most.

Not ready for prime time. That was the consensus reaction to the Green New Deal, released last month by freshman Rep. Alexandra Ocasio-Cortez, D-N.Y.

The Economist called the proposal “deeply unserious.” A Washington Post editorial labeled it as “fantasy.” New York Times columnist David Brooks wrote that it would result in “the greatest centralization of power in the hands of the Washington elite in our history.”

But the Green New Deal isn’t just lousy policy. It’s incredibly hypocritical.

In boosting the plan, for instance, Ocasio-Cortez tweeted that “the world will end in 12 years if we don’t address climate change.” It was a hyperbolic summary of an alarmist and scientifically unsound United Nations report on greenhouse gas emissions.

Enter, the hypocrisy.

If a climate change-induced existential crisis were, indeed, just around the corner, the most rationale response would be to gin up all the nuclear power the world can get. After all, in 2017 nuclear provided more than half (56 percent) of the country’s emissions-free electricity — more than triple the amount we get from wind and 18 times more than solar generation.

But, according to the now-deleted FAQ sheet from Ocasio-Cortez’s office, “The Green New Deal makes new fossil fuel infrastructure or nuclear plants unnecessary.” Launching “a massive mobilization of all our resources into renewable energies,” while eliminating emissions-free nuclear power is the most inefficient and expensive approach to carbon reduction possible.

The hypocrisy doesn’t end there.

Green New Dealers are trying to sell their policies in the name of economic security and justice.  However, policies that take away affordable, reliable power from American families are highly regressive. Higher energy costs hit low-income households hardest, because they spend a higher percentage of their budget on energy. The higher these costs climb, the more they are forced to make difficult choices between keeping the heat on or providing food for their family or perhaps going to the doctor.

Higher energy prices mean more than just having less money available for other necessities. It means having to spend more for all of the goods and services you purchase. That’s because energy is a critical component of manufacturing, communications and transportation—all of which are involved in getting goods and services to your household.

The Green New Deal doesn’t lead to more economic security and justice. It leads to greater economic strain, with low-income families being stressed the most.

And where’s the justice in cronyism and corporate welfare. The Green New Deal would open the floodgates of both.

Ocasio-Cortez rightly blasted New York’s special tax breaks for Amazon’s proposed HQ2. Offering up billions in state and city special tax breaks left a sour taste in many peoples’ mouths.

Cronyism works for big companies because they can offer a lot: investment, jobs and prosperity. But it is not a strategy for long-term economic success because it comes at the expense of other investments and opportunities. The investments will come when there’s an attractive, level-playing field for all companies to compete.

The Green New Deal would introduce significantly higher level of cronyism because Ocasio-Cortez wants the federal government (i.e., American taxpayers) to pay for the whole thing.

Remember Solyndra, the half-billion dollar solar boondoggle that went belly up? That’s just a small taste of things to come under a Green New Deal that puts potentially trillions of dollars up for grabs. As was the case with Solyndra, when the feds start picking energy technologies and companies to fund, they are essentially gambling with other peoples’ money. And there is never a guarantee the bet will pay off.

Solyndra is merely one example of a failed company that could not survive even with the federal government’s help. And there are many other examples of green cronyism that even more closely parallel New York’s erstwhile deal with Amazon, which Ocasio-Cortez found so distasteful. Taxpayers gave money or government-backed loans to companies that already enjoyed large market capitalization and/or substantial private investors. Federal “investment” wasn’t needed. But, hey, who’s gonna turn down free money?

The economic pain of green cronyism cuts deeper than wasted taxpayer money. When Washington steers money to — or away from — “favored” businesses or technologies, private-sector investment follow. This not only stifles competition and innovation, it also centralizes control in the hands of politicians, elites and lobbyists.

That’s the big picture. But the Green New Deal has very personal ramifications as well. It would change the way you live your life — from what car you drive, to how cool or warm you you’re your home, to what you eat.

The stench of hypocrisy makes it all that much worse.

This piece originally appeared in The Orange County Register