Economic Recession by Going Green?

The Economic Policy Institute (EPI) which was suggesting the economic stimulus package had also come up with another policy; the “need of a strong domestic manufacturing sector in promoting renewable energy and reducing greenhouse gas emissions.” Since global warming and greenhouse gas is now the most important problem for all humankind, the idea of renewable-energy is effective. The nature has been destructed by the climate change cause by global warming. There has been a lot of rain in arid regions and vise versa. For example, a huge number of corals are becoming white (dead) because the water temperature has been rising (corals begin to die when the temperature is higher than 86F). Some countries are having strong winds blowing across their country (ex. France); which has never happened in couple centuries.

Countries around the world have gathered around to brainstorm ideas to reduce greenhouse gas. But the United States has withdrawn treaties such as the Kyoto Protocol. One of the reasons was that reports from think tanks such as the Heritage Foundation has claimed that, by reducing Greenhouse gases there would be a decrease in the economy; less energy, less economic growth. Another problem was the exemption granted to China; true it seems unfair observing China building a new power plant almost every week. But at the state level, local governments are working on reducing Greenhouse gas emission (RGGI; Regional Greenhouse Gas Initiative).

There are pros and cons to new technologies related to the global warming. Ethanol use to substitute gasoline and bioplastics are some technology that is suggested to prevent the excess of carbon dioxide and global warming. It could be manufactured from glucose which could be made by sugar canes and other products that include sugar. Although ethanol does not increase the amount of carbon dioxide, it makes 34% less energy than gasoline. It may corrode rubber and plastic inside the fuel feed system or the aluminum used for the internal-combustion engine. More over it includes alcohol which has very high affinity with water. So when this is combined with the dew condensation— occurred by the difference of temperature between the fuel tank and outside temperature— and sent to the high pressure burner, there is a possibility that the fuel tank will corrode faster. In addition, ethanol discharges more NOx (nitrogen oxide) — which is harmful to human being— than gasoline.

Bioplastic is manufactured by corn and sugarcane which contains a lot of sugar and starch. Technically it is possible to make from wood, rice, milk and garbage (kitchen garbage that contains water, such as meat, fish and vegetable). It is said that bioplastic could be carbon neutral (zero carbon total release) and compared to the solubility of plastic (790F~1030F), bioplastic could be easily reused at 320F or from microbes, it could be decomposed to water and carbon dioxide and will make no dioxin; which is also harmful to human body. Although it takes some energy when manufacturing, the disposing of bioplastic by burning will not change the amount of carbon-dioxide as it would naturally. But some think tanks say that the amount of energy used to manufacture these products is not calculated (American Enterprise Institute). Some reports say that it would cause more Greenhouse gas as a result.


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Economic Stimulus Package

Weeks ago, President Bush has signed the economic stimulus package. The package will include tax rebates and business tax cuts. Greg Mankiw criticized this action when the CEA (Council of Economic Advisers) has stated that $168 billion stimulus package would create 500,000 jobs this year— “In other words, each job created adds $336,000 to the national debt” (Mankiw). Taking Mankiw’s extremely sarcastic remarks into consideration there is a controversy between left-wing think tanks and right-wing think tanks.

The liberal think tanks such as EPI claims that with the tax rebate, people would spend more money buying goods. With more than a million people receiving the benefit, it will have multiple effects in the economy which would make a “dent in the twin trends of rising unemployment and shrinking retail spending” (Nancy Cleeland-EPI). They have been claiming that the government should spend 1% of their GDP to help the poor; such as tax rebates, individual supports and accelerate public investments. But at the same time, they are against the business tax cut— which was not on their strategy report— because it will just give benefits to the rich ones.

The conservative think tanks are supporting the business tax cut because they believe it will “increase business investment, which would create jobs and strengthen the economy” (Hederman— The Heritage Foundation). They are against tax rebates because looking back at 2001, the tax rebates were not directly used to buy products— which they believe was a waist of federal spending. Bloomberg has said that it is “like giving a drink to an alcoholic” (The New York Times). The AEI was against economic stimulus and to fix U.S. tax code (Hassett). Many opinions are given hoping that the economy of the United States would recover. Robert Kuttner gave a different suggestion before the bipartisan stimulus package has passed— “instead of debating the finer points of a "stimulus" package, or the Fed's next rate cut, Congress and the White House should get together to rescue the housing sector. Home equity represents the greatest part of the net worth of the American middle class.”

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