Print Money for Renewable Energy

Germany has been very successful with its feed-in tariff. It has deployed a lot of solar. And brought down prices for everybody in the process.

Now Adnan Al-Daini proposes a different way to finance renewable energy. In this article published at Huffington Post in February he calls for printing money and investing it in renewable energy. The number he mentions is GBP 375 billion, which is what the Bank of England has spent on “quantitative easing” (buying government bonds on the secondary market with newly printed money).

GBP 375 billion government spending for renewable energy would be a considerable sum. It would be more than half of last year’s United Kingdom budget, which had expenditure of GBP 682 billion.

I am all for it. As long as there are feed-in tariffs as well, there is nothing wrong with the government investing massively in renewable energy. That is especially true for military spending.

I recall that in the United States the Pentagon is a large investor in renewable energy. They spent around $680 billion in 2011 (the whole budget, not the spending on renewable, which is only projected to reach a measly $10 billion by 2030). The main purpose of that spending is to feed the large military contractor industry. The secondary purpose of that spending is to provide security.

Since global warming is the most serious threat to the security of any country, a large part of military budgets should be spent for renewable energy, on top of current (largely useless) spending for weapons. Sell some “renewable bonds” to get the money. And then have your central bank print money and buy those bonds.

Once the military contractors understand that they can get the Pentagon budget to a trillion dollars a year this way, I expect them to support this kind of idea in their lobbying efforts.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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