"It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong." Richard P. Feynman

Friday, June 3, 2011

Go Green Go Broke!

I was disturbed to read recently about Superannuation funds investing heavily in "green industry" realising that the administrators of these funds could blow the pensions of thousands on foolhardy schemes.
The green bubble bursting will be more traumatic than the dot.com debacle and we seem to be travelling down that same path and buying on emotion, not facts . At the end of the day responsible investment controllers should be investing to make a profit and not in industries that rely on Government subsidies to exist! Peter Smith in Quadrant has more in his  article "Go Green Go Broke" on the so-called plethora of green jobs we are going to have noting that manufacturing migrates to where the costs are least and  today this means Asia!

When I was a child ships were still being built on Merseyside in England. Then it all disappeared and went to Japan. Robert Scott estimates that 2.4 million US jobs were lost to China between 2001 and 2008 (Economic Policy Institute, March 2010). What does all this mean? One thing it means is that that the production of any particular product tends to be concentrated; not evenly spread throughout the world. Way back in 1817, English economist, David Ricardo explained it by showing that products tend to be made where they can be made comparatively cheaply. For example, it turned out that ships could be built faster and more cheaply in Japan than on Merseyside. This represents a powerful economic force that in the end result simply can’t be resisted; except, apparently, when it comes to green jobs.
One difficulty in discussing green jobs is in knowing exactly what they are. Do I have a green job if I move as a maintenance engineer from a coal power station to a gas power station? I know that I have a green job if I work for a windmill power station but presumably not if I work for a nuclear power station, even though it produces no carbon dioxide emissions. Now a gas power station saves more emissions, when compared with coal, than an array of windmills because it produces so much more energy. So maybe gas is greener than windmills? Perhaps it depends on where I worked last. I have a green job if I move from brown to black coal but not a green job if I move from gas to black coal. I assume if I help produce solar panels and windmill parts or electric cars that I have a green job, but is this still the case if I use energy from brown coal to produce them?


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