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CAPITOL LETTERS (Ep. 9): The Green New Deals Tango

CAPITOL LETTERS (Ep. 9): The Green New Deals Tango The European and American eco face-lifts. And a point on the circular economy’s ruggedness

It is currently common sense (regardless of the amount of actual sense) to proselytize the teachings of “climate-changes-caused-by-man-and-to-be-reversed-also-by-man”. Before long, “Dubito” will be summarily excised from René Descartes’ famous witticism, which will suddenly become more laconic (as well as lacking in meaning, apparently) and will go like this: “I think (that something might exist), therefore it exists”! Then, we may get down to business: taxes, subsidies and regulations. Thus, we have the cocktail, the cool panacea brewed by the “majores terrae” (the planet’s greatest, in literal translation), served to a world stuck in the heat of the developments following the First Industrial Revolution. In the name of progress, we need to help temperatures regress back to pre-industrial levels, and we need to do so by “decarbonizing the green economy” and by socially just taxes. 

The word “ecologic” is not an abbreviation of… 

Climate change (an interesting rebranding of its “maiden name” of “global warming”) is based on three premises: 1) the terrestrial atmosphere is undergoing a process of warming (admittedly true!); 2) people are responsible for the warming of the atmosphere (what if they just act pro-cyclically to an already planetary / cosmic trend?); 3) this warming is inherently bad (what about its correlation – a word near to the hearts of natural scientists, yet not all social scientists – with epochs of peace and prosperity?!). All that has transpired in the wake of this revelation experienced by a few initiates in environmental sciences has eventually culminated in the global revolution, the apex of which was the Paris Agreement on climate change, a tributary to this triptych. These assumptions have already become “truths” (formerly of an “inconvenient” variety as per Al Gore and the UN’s IPCC, back when they were trying to set the climate alarm, for which they were awarded the Nobel Peace Prize).

What can be said in the meantime is that these assertions have grown quite convenient, albeit not 100% convincing. There has already grown a critical mass (these days presented as consensus) of certain adherents from all over the world, ranging from governments and politicians (191 countries have ratified the Accord) and the “high society” of academia, business and civil society, each with their own vested interests. Nevertheless, to remain vigilant to the ingredients of “climate consensus” doesn’t necessarily entail denial or conspiracy theories, but is rather part of an soundly skeptical exercise grounded in (con)science. For science without conscience is the ruin of both the heart (as per Rabelais) and of the hearth – that is made of both our own human condition and natural environment.

It is beyond any doubt and denial that man possesses the capacity to harm himself (and his descendants) by polluting the environment and depleting the resources of society. Yet, he can do this with even greater intensity only when social (legal) norms do not guide him to act responsibly, but instead allow him to “privatize benefits and socialize the costs”. Such a shortcoming could be “locally fixed” by legally and economically internalizing losses and externalities (i.e. “polluters must pay”), up to the discovery / invention of various “global issues”. That is using property rights and free markets before / instead regulations and dictates. The acme of irony (and of hypocrisy) is that states, tutors of environmental (dis)order, accomplices to ambiguous environmental responsibilities, “spiced” with arbitrary public policies, have the nerve to forge pacts on a planetary level! 

…the “economic environmental logic” 

The practical / pragmatic repercussions of a reasoned and reserved attitude to the ultimate causes of global warming / climate change (which may be another circumstantial whim of the planet’s cosmic existence), as well as the societal effects that such a global phenomenon can evidently bring about (far from an Armageddon, though, as they may perhaps be even beneficial in some ways) are obviously “dramatic” to those who have sought (one more) reason to intervene in the economy to whimsical fight market failures: the states. “The industry” of consecrating and countering anthropogenic climate chance is worth billions of USD / EUR, collectable via taxes and distributable through subsidies / grants in accordance with regulations. The “intellectual climate” spoken of in Bastiat’s era is even more heated. Paraphrasing him: “The state environmentalism is the great fictitious emotion by which everyone is indulged in seeking to live a cooled-down life at the expense of everyone else”.

The United States’ had a somewhat anticlimactic climate of skepticism, though “cured” on President Biden’s very first day in the office with a swift flick of the pen. He realigned America to the Paris Agreement and later, by the Inflation Reduction Act, decreed the creation of a greener economy using… around 369 billion of “greenbacks”, that is taxpayer dollars. The European Union had taken much earlier the mantle of a planetary flag bearer on this topic, consecrated by the European Green Deal, made public in 2019, a “roadmap” to ensure the resilience of the EU economy by transforming climate-related challenges into opportunities for all areas of policy and by guaranteeing an equitable and inclusive transition. The bill that the taxpaying citizen and consumer must face amounts to some EUR 1,000 billion from the EU’s budget – of course, asymmetrically distributed in its costs and benefits.

Just like the similarly sounding New Deal sported by Roosevelt in the post-Great Depression US, the EU Green Deal is first and foremost a mega-plan for redistribution, with generous intentions such as protecting nature, diminishing pollution and raising energy efficiency, with objectives that would sound quite reasonable if their scientific bases were also sound: by the year 2050, the EU is to eliminate its greenhouse gases, to separate economic growth from the intensive use of resources, and to leave no person or place behind. However, what if the (“consensual”) basis that this action plan relies on isn’t logically and economically coherent, nor is it correlated with the profound reality or our planet’s nature? If so, then the real bill, the real opportunity cost, will be greater than the billions of USD / EUR that show up on paper. 

P.S. Two years ago I wrote, together with Alexandru Pătruți, Mihaela Iacob, and Delia-Raluca Șancariuc, an article on the topic of circular economy, an otherwise laudable concept as long as it comes… naturally, along with the economic means to afford it and with the entrepreneurial drivers to set it in motion. Otherwise, it is “too much, too soon”. We have argued there that while the European Union remains a leading-edge jurisdiction on the planet in legislating and enforcing the circular economy, a token of its forthright environmental awareness (now emulated / competed by the United States), still, given that the level of economic development across the EU member states is heterogeneous, this concern, however generous it may be, looks too far beyond “their” means and too ahead of “its” times. What the European policymakers seem to disregard is that top-down institutional constructions, as is the case with the EU’s overambitious environmental legislation, can end up in severe distortions. Imposing / importing an institutionalized arrangement without due preparation may fuel resistance to (even positive) change in some member states, as the biases it engenders translate into considerable costs and selective benefits. The study explained suboptimal environmental results by the institutionalization of spiraling governmental interventions in markets, meant to make the arbitrarily-set recycling / reuse targets artificially viable. The conclusion is that it is equally perilous to neglect the calibration of legislative targets according to institutional and economic development, as it is to ignore ecologically legitimate claims because of gripes about costs… 

(August 29, 2022 – Washington, D.C.) 

Photo source: author’s snapshot at the National Museum of Natural History, Washington, D.C.



CAPITOL LETTERS is a series of articles occasioned by the author’s presence in Washington, D.C. as Romanian Cultural Institute Fellow, studying industrial revolutions’ imprint on the cultural sector.
The opinions hereby expressed by the author remain his exclusive responsibility and do not engage, in any manner or measure, the organizations to which he is affiliated or with which he collaborates.




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