Joel Kotkin: Western nations cripple their economies with green initiatives while China and others laugh

North America, with its vast resources, may be in a position to save the economies of the west. But governments on both sides of the border seem more concerned with green virtue signaling than actually finding a workable approach to carbon emissions that does not undermine our economies and ability to defend ourselves.

The prevailing notion, both in Ottawa and D.C., is that our countries should ignore our resources, and how best to use them, in order to fulfill a messianic vision of massive, rapid emissions reduction.

Canada’s proposed carbon tax, pushed through media at government expense, and zealously promoted by Mark Carney, who thinks mass decarbonization, as epitomized by Europe, provides the road map to prosperity, despite the continent’s consistent economic lethargy.

This approach has also poisoned politics as not all provinces are affected equally by the initiative. The institution of the carbon tax and other measures by government and through the relentless pressure of green non-profits, to get a 40 per cent emissions cut by 2030 may be the toast of investment bankers betting on cashing in on forced changes. But for taxpayers, the impact will vary by province. Fossil fuels account for five per cent of Canada’s overall GDP but four times as much in Calgary, Newfoundland and Labrador.

However, as much this appeals to academics and wealth pearl-clutchers in cities, it translates into higher prices than normal. As the NDP’s Jagmeet Singh suggested, it places unfair “burdens” on the working class, one reason for his opposition to the tax. Worse still, the biggest green targets of what climatistas label as “industrial carbon” could devastate those same NDP voters — blue collar workers in mining, like manufacturing, logistics and agriculture.

Canada does not need another way to slow its economy. One recent estimate suggests that the proposed $170 a ton proposal would slice 1.8 per cent from the country’s already anemic GDP and cost upwards of 185,000 net jobs. Even Liberals admit something close to a 1 per cent decline. Some may see these draconian attempts to wipe out fossil fuels as the Lord’s work, but on the ground level it seems closer to class warfare.

Trudeau and his supports insist these policies are critical for saving the planet. Yet, attempts to follow such approaches elsewhere have not ended well. In Europe, most obviously Germany, as well as California, the shift to “renewable energy” has led, as it usually does, to high prices that already are driving German industry off the continent. Although not nearly as well-endowed with energy as North America, the climate lobby in Europe makes sure to throttle anything, such as offshore oil in the UK — in pursuit of green puritanism.

There’s something delusional in many of these initiatives. A key mistake is the common green assertion that fossil fuels are becoming obsolete and should be wiped out for the benefit of fitting a new economy. Yet, in the real world, despite billions in subsidies for “green power,” fossil fuels still represent roughly four fifths of global energy generation, just as it did twenty years ago. This is after expenditures of over one trillion were spent on solar and wind. The West has been reducing per capita emissions for years, but this is utterly subsumed by growth in developing countries, notably China, which not only buys huge amounts of natural gas but continues to open new coal-fired plants at a rapid rate.

North Americans be forewarned that in imposing burdens on themselves, but not competitors, green governments are essentially guaranteeing their own decline. Already in the EU, nearly a million industrial jobs have been lost over the past few years, with investment shifting to countries like China and India, which freely use coal and fossil fuels to keep costs down.

Britain’s path may give the starkest preview of the future Biden and Trudeau have in mind for us. Since 1990 the manufacturing sector’s share of GDP has dropped roughly 50 per cent along with several million jobs. This parallels a two thirds drop in UK energy production, while consumption has fallen by only one third. Three decades ago, a net energy exporter, the UK now increasingly depends on imports from the Middle East and other unstable regions.

The winner here is clearly China, a country that emits more GHG than all developed countries put together. Ironically, carbon reduction policies fit brilliantly into its strategy to use its coal and other fossil fuel energy to power their takeover of the “green economy.” China has placed itself in the catbird’s seat on renewable energy, including utter domination of solar panels and electric vehicles. China already produces twice as many EVs as the US and the EU combined, and seeks to leverage its total domination of the solar-panel industry — its battery capacity is now roughly four times ours. China also exercises effective control of the requisite rare earth minerals and the technologies used to process them.

As the west’s own overpriced EVs sit on lots, China plays us for utter fools as we undermine our own industrial economy. The forced march to EV will be particularly tough on the 125,000 who work in Canada’s car factories. Manufacturing and mining, much of it energy-related, represent, along with real estate, two of the country’s largest industries. Under the current circumstances, they are heading for a spectacular fall. Overall, the EV industry in the U.S. uses 30 per cent less domestic labor than traditional gasoline car manufacturing, and under current circumstances can only hope for some basic assembly work using Chinese components.

These policies will affect every industry and consumer as cars and things like heaters are all forced to electrify. Britain’s shift to EVs is projected to double the demand for electricity by 2040, and its government is already looking to ban the use of home chargers during peak hours. By 2050 in California, state consultants estimate total energy demand will skyrocket, by some estimates rising 60 to 90 per cent. Not surprisingly, the state will face “acute electricity shortages” over the coming decade, according to one recent analysis.

Rising demands for electricity for artificial intelligence seems likely to add to this burden. Microsoft alone is opening a new data centre globally every three days. These power-hungry operations are expected to grow from 4.5 per cent of energy demand to 10 per cent by 2035. Artificial intelligence and data center demand are leading to massive expansions in projected energy use around the world at a time of restricted supply. Google, renowned for its green virtue signaling, has boosted its own emissions by 50 per cent since 2019.

Ultimately, the oligarchs will likely get their juice from sources like decommissioned nuclear energy, while the average family will take the economic hit in order to fulfill the agenda pushed by the likes of Steve Jobs’ widow, Lauren, Michael Bloomberg, the Rockefellers, Jeff Bezos and venture capitalist John Doerr. These, and other oligarchic allies, are waging a sophisticated and well-financed media and institutional campaign to catastrophize the climate issue as a way to ban gas stoves, stop new LNG facilities, and crack down on plastics.

Finally, there is the issue of security, particularly relevant in an age of declining western power. The new green mandates, if adopted, presage yet another force to further reduce the industrial prowess of western countries, while driving more industries to China, India, and other countries who produce their goods with dirtier fuels and develop resources with less environmental care. At the same time, third world countries, for the most part, are not embracing “net zero,” as it is totally infeasible for them and will likely resist western lectures on climate policy.

All of this is occurring as a concert of ugly energy producers — Russia, Iran, and Venezuela — press their advantage on western countries. They stand to benefit from continued de-industrialization as one way to further weaken the military capacity of the west. Taking away North American liquified natural gas from Europe simply makes the continent more dependent on such malefactors as Qatar, a primary backer of terrorists and their supporters, and may lead the west, hat in hand, to beg from even worse regimes, like Russia and Iran.

The good news — while green virtue-signaling may appeal to Trudeau, Biden, and Harris — these policies could be impacted by political realities. Worried about voters in industrial states like Michigan and Pennsylvania, Harris, even as she embraces environmental bromides, has backed away from EV mandates and opposition to fracking, albeit with dubious credibility. Yet, perhaps she realizes, or those around her do, that these policies do not sell well compared to promoting more affordable and reliable energy. Trudeau, if he wants to remain relevant, may similarly need to flip the script if he hopes to forestall an utter political defeat.

Joel Kotkin is Presidential Fellow in Urban Futures at Chapman University and Senior Research Fellow at the Civitas Institute at the University of Texas, Austin.

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