Politicians say Net Zero policies will increase employment and reduce costs – except that may not be the case – for obvious reasons.
Politicians and the public tend to think all investment is good for growth, an error that leads to all sorts of muddled thinking about climate.
Technological transformations are positive supply shocks: a new, more efficient technology comes along, and investment naturally gravitates toward this new technology because it is profitable.
By contrast, the green transition is driven by public policy. It is “a negative supply shock, with an accompanying need to finance investments whose profitability cannot be taken for granted,” French economist Jean Pisani-Ferry wrote in a report commissioned by the French prime minister and released in English in November.
Why No One Wants to Pay for the Green Transition – WSJ
And this:
Pisani-Ferry estimates a middle-class French family would spend 44% of annual disposable income for a heat pump, and 120% for an electric car. These investments boost demand, but don’t leave families better off since they simply do the same thing as what they replace. And if taxes rise to pay for these investments, families will be worse off, financially.
Read the whole story, if you can.
