green new deal

He still doesn’t grasp money, does he?

Funding the UK Green New Deal

OK, super.

The Green New Deal will:

Transform the UK’s 30 million buildings so that they’re all energy efficient by 2030 – creating hundreds of thousands of jobs on the way right across the UK, as well as the training and support services they’ll need;
Turn as many of those buildings as possible into power stations by fitting solar panels and other generating alternatives;
Build new social housing to end our housing crisis;
Investing in renewable energy of all sorts on and offshore;
Build a non-carbon based transport infrastructure;
Invest in agriculture that protects biodiversity;
Require that business transform itself to become zero net carbon and provide the funding to help them to do that if they cannot find it themselves;
Provide security for people’s savings, which will be used to fund this innovation at better rates of return than most savers enjoy now;
Deliver pensions that will work.

We’re in Underpants Gnomes territory here. Green investment…….. profit!

It’s the middle step that’s missing. How does investing in new social housing bring a profit to the investor? A no-carbon based transport infrastructure? Biodiversity is rather a public good isn’t it? With all of the problems of being able to appropriate the benefits of investment in a public good?

That being the problem here. Let’s just assume that everything else is correct – it ain’t of course, climate change isn’t going to drive us extinct, nor does all of this have to be done in 10 years – and that we need the green investments and all.

OK, what’s the problem with normal market forces just providing the investments? That they don’t turn a profit. Not in the normal financial sense they don’t, even if they are desirable in the larger context. Where we can say there’s a “profit for the planet” or whatever but we don’t in fact have that “profit to the investor directly in the here and now”.

For example, investing in solar panels doesn’t make a profit. That’s why we set up feed in tariffs and all that so that, with the subsidy, private sector investment in solar panels did make a profit. We deliberately twisted things so that the investor could appropriate some of the public benefit of that investment.

What’s the bit that Snippa has forgotten here? The Underpants Gnome bit. Where is the system whereby investors in things Green can appropriate some of that public benefit so as to provide a private return? Without that of course everything else is nonsense.

And the real joy is that with such a system then all the rest of the cobblers is unnecessary. Because in being able to make a private return on greenery we’ll get the greenery, won’t we?

That is, not for the first time, Snippa’s entirely missed the vital part to make the scheme work.

We’ve got to make it profitable to:

Turn as many of those buildings as possible into power stations by fitting solar panels and other generating alternatives;
Build new social housing to end our housing crisis;
Investing in renewable energy of all sorts on and offshore;
Build a non-carbon based transport infrastructure;
Invest in agriculture that protects biodiversity;

And once we’ve made it profitable to do so then what else do we need? And what’s Snippa forgotten? How to make it profitable.