Dollar bills
A fav snide econ remark has something to do with the free lunch; i.e., $5 bills lying on the ground waiting to be picked up. According to a report from Environment Colorado there are $1.9 billion dollar bills laying around:
Today, Governor Bill Ritter joined clean energy advocates to announce a new Environment Colorado Research and Policy Center report entitled “Energy for Colorado’s Economy.”
The report shows substantial increases in economic and environmental benefits if Colorado were to double its use of renewable energy, such as wind and solar power, to 20% by 2020.
“This report shows we can fulfill the Colorado Promise,” said Gov. Bill Ritter. “By doubling our use of renewable energy to 20 percent, Colorado’s gross domestic product will increase by $1.9 billion.”
Let's see, if we double our use of an inefficient energy (in terms of production costs), state GDP will increase by about .1%? Hmmm. I don't buy the logic. I can see the environmental benefits, sure. Read on ...
The economic boon would come from increased manufacturing, installation, and operation of renewable electricity production. The report compares economic and environmental benefits of three alternative polices on electricity production, including: “business-as-usual” with fossil fuel production, Amendment 37 which set a 10% renewable energy standard, and the 20% goal currently being considered by the Colorado state legislature.
But, GDP is the value of final goods and services. Electricity production is an input into the production of final costs and services and is therefore a cost.
There are loads of economic reasons to favor renewable energy, but macroeconomic or regional economic impacts are not one (two?) of them. There is also nothing wrong with documenting the impacts of government policies in terms of jobs and incomes. But touting these so hard simply gets in the way of the more valid arguments for environmental protection. That's a bummer.
What about this: increasing efficiency can be done at a local level (building suppliers and the construction of more well-insulated homes), which prevents money from being sent out of state (to the fuel oil companies).
Does this make sense?
Posted by: Jim N. | February 28, 2007 at 11:29 AM