by Paul Taylor

Created on: January 16, 2009

Green Costs in Recession

The cold realities of global economic recession will chill the recent years of obsessive environmental politicking. The environmental movement has been called the most densely organized political movement in human history; with environmental groups growing from two thousand to over four thousand during the 1990s. Green groups have leveraged their roughly $1.5 billion in annual nonprofit assets to drown us in a tsunami of eco-propaganda and the fear mongering of global warming. Corporate marketeers have "greened" every product, service and tag line from hybrid cars to natural funerals to thousands of eco-friendly products. Critically missing from this eco-emersion in fanciful ideas for green living has been disclosure and discussion of the actual capital and maintenance costs involved.

Environmental protections in developed democratic-capitalist countries are a luxury that developing countries cannot afford even in prosperous times, and environmentalism will become a lower priority for all as the global economic decline deepens. The fortunes made by eco-nonprofits - many of whose idle assets sat in what were extravagant hedge funds and private equity accounts - will dry up as donors tighten their belts. Government-regulated environmental controls in the US cost about 5% of US gross domestic product (GDP) about the same as US expenditures for national security and homeland security combined, or what the US spends on foreign oil annually, or the size of the recent US Treasury "banking bailout," or the assets of all US nonprofits which number over one million. United Nations (UN) estimates for Kyoto-like global warming controls during this century would cost another 2% in GDP. European Union (EU) carbon emission controls have failed both environmental and market goals. The EU countries are now falling faster than US markets into the global credit market freeze partially due to the burdens of their hasty climate control regulations.

President-Elect Obama proposes to create 5 million new green jobs in a decade creating a new "green economy." This would represent at least $15 billion a year of his new government stimulus package. His ideas to employ people in residential weatherization, in erecting wind farms and solar panels, and in constructing upgrades of America's electrical power grid would presumably save the planet from a global warming holocaust, and restart the economy in yet another very expensive Keynesian government spending spree. This is socialism with a green wrapper.

Obama's planned green economy, along with many of his other "smart" plans, will first collide with the realities of our depleted U.S. Treasury with coincident skyrocketing national debt in an ongoing recessionary global economy. Second, none of the fanciful "alternative," "green," "eco-friendly," "sustainable," or "carbon neutral" technologies will attract essential investment capital or create new green markets when a barrel of oil sells for less than $70 on world markets. Last quarter the EU's index of green capital investments fell by 25%.

The new green realities are that global economics conditions will, and must, bring rational science and economics back into environmental issues after decades of irrational and duplicitous eco-politics. www.greencosts

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