Heavy Lifting - thoughts and web finds by an economist
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Monday, December 15, 2008
I think it is reasonable to suspect that so-called green technologies are normal goods. Those technologies are expensive (at least initially) and at this point are generally unproven (at least as primary energy delivery vehicles). Much like I, and others, rely on people with the means and desires to purchase plasma screen televisions at a cost of $5,000 so that eventually returns to scale can kick in and I can purchase a plasma screen television at $1,500 (if I so desire), less wealthy societies are hoping that the wealthier countries will spend a lot of money "breaking in" green technologies.
Our incoming administration promises that going green is a top priority, but exactly how much of new spending by the federal government will be wasted on failed projects and, notwithstanding the tragedy of the commons approach to curbing greenhouse emissions, why not allow the market to (more) slowly adapt technology to become more efficient?
We are already seeing the indications that going green is a normal good, that is when incomes fall the demand for "going green" falls:
The University of Illinois has canceled its plans to build wind turbines on campus, citing the university's "deteriorating fiscal condition."
If "going green" is so expensive that only the higher levels of government can "afford" to undertake the transition? We might as well check our wallets at the door.
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