Green, easy and wrong

TWO pressing problems face the world: economic meltdown and global warming. Conveniently, a solution presents itself that apparently solves both: governments should invest heavily in green technology, thus boosting demand while transforming the energy business.

This notion is gaining credence around the world. Last month the United Nations called for a “Global Green New Deal”. But it is in America that the idea is really taking off. The United States Conference of Mayors reckons that green investment should provide 2.5m jobs. The Centre for American Progress, a leftish think-tank, thinks $100 billion worth of spending in the area would spawn 2m jobs. The new president tops both. Barack Obama proposes spending $150 billion over ten years, thus helping, he says, to create 5m jobs.

There is a historical parallel to this synergy between two worthy aims. Just as military spending at the end of the 1930s defeated both fascism and the Depression, so spending on fighting climate change should both wean mankind off fossil fuels and avert what might otherwise turn into the most serious downturn since the 1930s. Isn’t that neat?

No. Mr Obama’s commitment to solving climate change is devoutly to be welcomed. There is also a case for giving the economy a boost through government spending. But combining the two by subsidising renewable energy is, like many easy answers, the wrong solution. …