Tyler Cowen: prediction

Transcript context

…I think, for climate, it’s an extremely important message. For green tech, which we’re invested in — I’m worried that people will suspect that we’ve bribed politicians because this bill could not possibly have been better for the Grantham Foundation that has half its money, half its principal in early-stage green tech, all of which will benefit. All aspects of green are being encouraged in this bill. But more important than that, it sends a message to the rest of the world that dopey US, full of climate deniers and politicians with their heads in the sand, has finally begun to wake up. Is the long-run equilibrium that we make green energy much cheaper, but dirty energy becomes cheaper also when the world just uses much more energy? Because as we move away from oil, its price falls, so Vietnam, Africa, Bangladesh, wherever — they’ll just use that oil, and the world will remain dirty in terms of carbon. The interesting thing about green energy is, on a marginal cost basis, which we economists know is the only thing that really matters, the marginal cost of wind and solar and almost all green energy is nil. It’s very hard for even a falling price of fossil fuels to get to nil. It is so cheap to generate wind and solar when you have built the expensive plant, and we will drive fossil fuels out of business.…

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