Global Trend

By Global Trends Editor Group

The First Techno-Economic Revolution, known as the Industrial Revolution, began in 1770.

Within just a few years of this milestone, innovators faced serious push-back from two groups.

The first group, called Luddites, were craftsmen, farmers and others afraid that factories would destroy their livelihoods and transform the economy in ways that would disrupt their world;

the Luddites were forerunners of the workers and consumers who are afraid of technological disruption in our own time.

The second group, called Malthusians, were intellectuals certain that population growth enabled by industrialization would overtax the food supply and lead to societal collapse;

they are the forerunners of the Environmental Extremists who forecast ecological doom in our era.

 

We addressed the significant, but transient pushback associated with the modern-day Luddites in trend #2, this month.

As explained, this group will tee-up some important concerns and help ensure that safeguards are put in place related to bias and privacy.

More importantly, their resistance will reveal many flawed assumptions about the prospects for General Artificial Intelligence.

In the process, people will learn that so-called “smart machines” won’t ever have minds in a meaningful sense.

As a result, their fears can readily be addressed by technologists, regulators, and markets.

On the other hand, today’s Malthusians are everywhere from the boardroom to the White House to Wall Street.

Yet their dystopian view that economic and population growth will soon destroy life on Earth is no more well-founded than the warnings put forth early in the 19th century.

But despite the lack of evidence, this divisive demagoguery represents a powerful worldwide political and economic threat to human health, happiness and security. 

Consider the facts.

As with prior apocalyptic panics over human progress, the current Global warming panic is based on a tiny kernel of truth, upon which a mountain of assumptions and extrapolations have been built.

As explained in prior issues, we’ve seen a tiny rise in temperature, which seems to correlate with an increase in so-called “greenhouse gases.”

However, as climate statistician Bjorn Lomborg reminds us, every comprehensive analysis based on real data indicates that inaction will not lead to the end of the world.

Consider a few examples. 

First, none of the official climate models accurately forecast actual temperature. 

Worse yet they all over-estimate temperature, eliminating any excuse that the problem is due to random error.

This means that we simply can’t trust the arguments made by these so-called scientists.

Second, the supposed disasters attributed to global warming simply aren’t happening;

it’s all propaganda and fantasy. Specifically, rises in temperature and greenhouse gases are NOT leading to more climate-related deaths, more acreage being burned by fires, more intense hurricanes, and more polar bears dying.

Third, the evidence indicates that within the likely 21st century limits, more greenhouse gases and higher temperatures will actually save lives and lead to higher living standards in most places.

That’s especially true if it’s accompanied by innovation and rapid economic growth.

Already, slightly higher temperatures in the 21st century have reduced climate-related deaths from cold far more than it has increased deaths from heat. 

Furthermore, for much of the rest of the century, higher CO2 levels are likely to enhance food production, making life better for billions.

That’s one reason why low malnutrition correlates with high economic growth rates.

Not surprisingly, William Nordhaus the world’s only climate expert to win the Nobel Prize in economics estimates that if we do nothing, the cost of climate change will be equivalent to a loss of about 4 percent of GDP by the end of the century.

To put that into context, at the end of the century, the U.N.’s own “middle-of-the-road scenario,” estimates that the average person in the world will be about 450 percent as rich as the average person is today.

That means if the economy grows as expected, the mean average human will go from an annual income of $9,733 to $43,799, in current dollars.

As Lomborg explained in a peer-reviewed 2020 article in the journal Technological Forecasting and Social Change, the 4 percent reduction Nordhaus calculates means that by the end of the century,

instead of being 450 percent as rich, the average person will be “only” 434 percent as rich because of the effects of climate change. That’s certainly not the end of the world! 

More importantly, if this Malthusian climate panic means that we end up adopting poor climate policies and spending 5 to 10 percent of our GDP on them, we are likely to never get close to this 434% rise in average per capita income. 

Notably, economic research overwhelmingly shows that the best way to address climate change is not by asking everyone to be colder and poorer.

Such solutions are demonstrably suboptimal in the rich world, and they will prove catastrophic for people in the world’s poorer places.

In fact, without access to abundant, low-cost, and safe energy, hundreds of millions, if not billions, in South Asia, Sub-Saharan Africa, and Central Asia will die prematurely during the next 75 years.

And that’s precisely what environmental elitists including John Kerry and many clueless Hollywood stars seem to want. 

We constantly hear that renewable energy in the form of wind and solar is taking over from fossil fuels.

The implication is that the hard work has been done and the only thing still needed to stop climate change is a little more political willpower.

This is simply wishful thinking among the uninformed.

The fact is, solar and wind are capable of meeting only a fraction of global electricity needs.

Even with huge subsidies and political support, solar and wind delivered just 10 percent of global electricity in 2021.

Meanwhile, heating, transportation, and vital industrial processes account for much more energy use than does electricity generation.

As a whole, solar and wind deliver a miniscule 1.9 percent of the global energy supply.

And electricity is the easiest of these components to decarbonize.

The truth is, we haven’t yet made meaningful progress toward turning the remaining 80% of global energy green.

Paradoxically, the most "renewable" continent is Africa. Half of its energy comes from renewables, almost exclusively wood, dung and cardboard burned for cooking and heating;

and these renewables kill about 700,000 people a year in sub-Saharan Africa with indoor air pollution.

A billion Africans have little reliable energy because they’re poor.

Californians use more energy in their pools and hot tubs than all 60 million inhabitants of Tanzania use for all purposes.

Economic growth and development can move them out of this unenviable position, but it will also mean that Africans will need to use much more fossil fuel.

In its newest report, the International Energy Agency estimates that even after implementing all current political promises, world energy will only be about 30 percent renewable by 2050.

And their extrapolation suggests that the world will reach 100 percent renewables around the year 2175.

It is much more difficult to get rid of fossil fuels than most climate campaigners will admit.

To fulfill the promises made in the Paris climate accords, the United Nations says, annual reduction by 2030 would have to be eleven times what we managed to achieve when the world ground to a halt during the Covid lockdowns.

That is hardly realistic.

Then there’s the question of how all this can be paid for.

According to a the most comprehensive global study by McKinsey, getting to net-zero would be fantastically expensive.

Just the additional cost of low-emission assets and infrastructure would total $5.6 trillion annually.

That is more than one-third of the world’s total annual tax revenue.

Obviously, spending over a trillion dollars a year is astounding for the United States, and spending the same amount is enormous for the EU.

But what about India, an emerging-economy and now the most populous country in the world?

Going net-zero would cost India a massive 9 percent of GDP each and every year, which is about three-fourths of the total Indian tax intake.

Imagining that India would spend most of its available resources to achieve net-zero is just a fantasy.

The same is true for sub-Saharan Africa and other developing and emerging economies.

But as Lomborg observes, “it’s not as if things are much more achievable in rich countries.

One American study found that reducing emissions 80 percent by 2050 would cost each American more than $5,000 every year.

The same analysis found that reducing emissions 95 percent could double that cost.”

Polling data indicates that it’s unlikely that any politicians will get reelected on that ticket.

Therefore, these policies seem doomed to failure.

Given this trend, we offer the following forecasts for your consideration. 

First, pending widespread deployment of nuclear electricity and the proliferation of fuel-cell electric cars, a Net-Zero economy will remain unattainable, despite mandates.

People in the OECD countries simply won’t settle for “ubiquitous rolling blackouts” and losing the freedom associated with affordable automobiles.

The cost and unreliability of solar and wind make them non-starters for base-load electricity.

Similarly, the ecological damage and cost of replacing today’s fleet of automobiles, trucks and aircraft with battery-electric alternatives is simply inconceivable. 

Mandates intended to move us entirely to such solutions by the 2030s represent a “suicide pact,” which will lead to a complete loss of credibility by the green elites.

Second, for the first time, Congress and the American public will demand genuine cost-benefit analysis to justify environmental mandates and regulations.

This will set the stage for pulling the plug on the administration’s environmental and energy programs for 2024 and beyond.

In 2023 and 2024, the House Natural Resources Committee and the House Energy and Commerce Committee will aggressively challenge the summary conclusions of NCA#5 and hold bureaucrats accountable for prior abuses of trust.

Third, in 2023 and 2024, Congress & SCOTUS will become the major battlefields in the struggle over U.S. climate and energy policy.

Among the proposals that will dominate the agendas of the House Natural Resources Committee and the House Energy and Commerce Committee in the coming months are bills prohibiting restrictions on hydraulic fracking without congressional approval, expanding natural gas exports and repealing the Greenhouse Reduction Fund created under the so-called Inflation Reduction Act. 

They will also focus on amending the Clean Air, Toxic Substances Control, Solid Waste Disposal, and National Gas Tax acts.

Within the tranche of proposed legislation on the committee’s “unleashing American energy agenda” are bills calling for “permitting reform,” promoting development of “critical minerals,” and prohibiting the import of Russian uranium.

One particularly important bill is the American Energy Act which increases the maximum length of time companies can drill under a permit from two years to four years and ensures that the Bureau of Land Management, approves applications for permits to drill (or APDs) in a timely fashion.

“Permitting delays” have increased from an average of 94 days in June 2019 to 182 days under the Biden administration last year.

During fiscal year 2022, the BLM approved an average of 233 drilling permits per month, while it approved 400 drilling permits per month under the Trump administration.

Tying this legislation to must-pass bills like “raising the debt ceiling” provides their best chance of becoming law. However, merely forcing votes on these items which highlight the contrast between Make America Great Again and the Green New Deal will represent a win for Republican’s ahead of the 2024 elections.

Meanwhile, the tone that can be expected from the Supreme Court was indicated by its 2022 ruling in the West Virginia vs. EPA case. And,

Fourth, innovation enabled by rapid economic growth will not only provide a path to net-zero decarbonization by the 2060s, but will permit us to end net human consumption of limited natural resources by 2100.

As explained in our January 2020 issue, innovation and growth are enabling a “circular economy” in which advanced recycling and digitization give consumers more value while consuming less matter.

Already the United States and several other advanced economies have passed the so-called “dematerialization frontier” where consumption of many materials shrinks, even as GDP grows.

As a whole, the world is still far from that point.

However, advances in energy technology, biotech and materials science indicate that aggressive growth will get us to that point before 2100.

After that, global resources will become effectively inexhaustible, leaving the Malthusians little to cry about.