COPENHAGEN — With a worldwide recession advancing, strong action on global warming has been thrown into jeopardy. This matters, because in little more than a year, the world will sit down in Copenhagen to negotiate the followup treaty to the failed Kyoto Protocol. Yet, with people losing jobs and income, immediate economic help seems to matter more than temperature differentials 100 years from now.
Many green pundits have, however, started saying that the financial crisis only makes the need for action on climate change greater. They urge America's 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. Such sentiments, no surprise, 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.