Abstract: This paper applies theories of institutional adjustment and Modern Monetary Theory to the problem of rapidly transitioning to an electricity provisioning system consistent with the Green New Deal. We argue the current obstacles are primarily financial, not technological in nature, and offer a high-level policy framework for using fiscal tools at the Federal level that overcomes the obstacle, while protecting rate-payers from cost burdens. Drawing upon theories of institutional adjustment after John Fagg Foster, we show that it is feasible to craft a policy solution to the financial barriers to adoption of rapid transition to a clean and renewable grid, even under relatively conservative assumptions for institutional change.Global Institute for Sustainable Prosperity
Electricity Provisioning under the Green New Deal: A Modern Monetary Theory Approach
Avraham I. Baranes and Mitchell R. Green
Constraints are resources, not finances.
ReplyDeleteWhenever any new movement appears - Christianity, Buddhism, MMT - a host of time wasters come out of the woodwork and jump on the new bandwagon. This paper looks very much like an example of that.
ReplyDeleteMMT is no real help in implementing green investments. Those investments will require the sacrifice of consumption in some other direction WHATEVER regime obtains. The sacrifice may mean e.g. less spending on the military or it may mean raised taxes. But there's no escaping the sacrifice.
MMT does mean the economy is more likely to be kept operating at or near capacity. But that has nothing SPECIFICALLY to do with green investments any more than it has to do with health care, education or you name it.
Green is a longtime MMTer - think he used to basically run New Economic Perspectives. They're using the word "constraints" in a different way. Their point is that in green power generation the obstacles that people see are institutional and financial, not resources or technological. That is, they are completely imaginary from one perspective - something a good Czar could eliminate with a snap of the fingers. But very real from the practical perspective. For instance, there was a big news story a few years back about how Google recruited many top scientists, studied the problem. And then gave up, closed down the project. But Google fantasized that the financial constraints were real and imported them everywhere, sometimes subtly into their "technological" analyses. Garbage (economics) in, garbage out.
ReplyDeleteAnd the idiot press chorus - including say Naked Capitalism - said - if almighty, all-efficient Google Randian superheroes cannot do it, how can the government, which by definition according to ideology must be inefficient and powerless? SO why not eat drink and be merry, for tomorrow we die.
So this paper just confirms what I commented back then on this episode. Since they agree with me, the must be right and brilliant. :-)
Those investments will require the sacrifice of consumption in some other direction WHATEVER regime obtains.
As stated, not at all true - it's a false neoclassical, perfect full employment assumption. If we squander resources as spectacularly as we are wont to now, the decision "stop squandering" entailed by MMT is a perfectly free or better decision that requires no sacrifice of consumption. The USA's New Deal, China's recent policies required no consumption sacrifice. They increased investment and consumption.
A Green New Deal is supposed to decrease energy use per capita - otherwise it is useless.
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