----- Original Message -----
From: J. van Baardwijk <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Saturday, May 05, 2001 9:49 AM
Subject: Re: W. on the Environment
> At 09:19 5-5-01 -0500, Dan Minette wrote:
>
> >The people in the United States are for Kyoto in principal, but I cannot
> >imaging them voting for such a severe a capping of economic growth. The
> >senators actually reflect US sentimate. People in the US are for
> >environmental measures, but not to the point where joblessness will rise
2%
> >or 3% as a result.
>
> Ah, so *that* is the problem: the people want environmental measures, but
> they don't want to pay the price for it.
>
Part of the problem, now, is that it would be a severe jolt. Everyone sat
on the treaty for five years, during which time the energy demand of the
world went up 3% per year. We would probably have a severe world wide
recession if the treaty were adhered to immediately. The US has been the
engine pulling world growth for a decade, and if it stops dead in its tracks
for several years, it would be hard to imagine the rest of the world doing
well.
>
> >IIRC, the US would be allowed virtually zero increase
> >now, because the increase that was allowed has all been used up.
>
> Yes, so what? I remember from my Business Economics classes in Business
> School that one of the pillars of capitalism is permanent and unlimited
> economic growth. History has already proven that you *cannot* have that. A
> slow economic growth will probably be benificial in the long run, as it
> provides more economic stability.
>
Economic growth that is slower than the population growth is a recipe for
disaster. The population of the US is growing at a significantly faster
rate than the European population because the United States allows far more
immigration than Europe. This includes legal, quasi-legal and illegal. By
quasi-legal I refer to the practice of grandfathering in illegal immigrants.
Friends of ours are former illegal immigrants who are now legal, with the
daughter going to Baylor (a good private Texas school) on full scholarship.
Its now to the point where the white non-Hispanic part of the US population
is down to 70%. Its projected to be under 50% in less than 60 years. Given
this difference in demographics, it is unreasonable to expect the US to
voluntarilly stop ecconomic growth.
Also, can you give me an example of a historic proof that we cannot have
economic growth for the foreseeable future? Its worth noting that most of
the US's economic growth has come from an increase in productivity. I'll
agree that it is improbable that the per capita income of the world would be
1 billion dollars in today's money, but it is not clear that we are in a
regime where the cap is visible.
When the treaty was first signed, it was assumed that it would be ratified
quickly, and the countries would have time to spend money on energy
efficiency. This, combined with the room for some additional emmissions,
would have the same result as an increase in the price of energy in the US
and Europe. Over 5-10 years, that has a chance to work. But, as it stands
now, all the slack is gone, so the ecconomic impact would be a shock.
>
> >Third
> >world countries, on the other hand, have a lot of room for expansion.
> >One of the main effects of Kyoto would be a transfer of wealth.
>
> Doesn't sound like such a bad thing to me. Actually, I'd say this is an
> incentive to ratify Kyoto: once the overall wealth in the Third World
> increases, it will become a huge new market for everything we Westerners
> take for granted.
Well, I'm certainly comfortable with the Third World having a higher growth
rate than the US. Indeed, the US funded the Marshall plan to improve
Europe's growth rate. Few people in the US would oppose that, as long as it
doesn't cause factory closings. I would support it, even if it did have
some effect.
But, we are talking about massive effects, especially now after the US and
Europe have used up virtually all of their slack. Multinationals would
close factories in the US and Europe to open factories in 3rd World
countries. Unemployment would shoot up at first, and then continue to creep
up because there would be no chance for growth.
I'm guessing that's why the Netherlands has not ratified that treaty. Doing
so would be political suicide.
>Imagine how much money can be made once everyone in the
> Third World can afford anything from big-screen televisions to fast cars
to
> high quality health care to state-of-the-art computers to first-class
> airline tickets to foreign foods to cell phones to ...
>
That would require a great deal more growth than is allowed by this treaty.
> Of course, this would require the capitalists to start thinking
long-term...
>
Long term thinking does occur, but only in the areas where the future can be
predicted with some accuracy. For example, the value of a lumber company
depends on how well they replant the forests they own. Its hard to do long
term planning in energy, when prices drop from $22/barrel to $10/barrel and
then up to $35/barrel all within 2 years. 2 year plans go out the window in
6 months when that happens.
Dan M.
