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Environmental Bailout?

The environment needs a bailout. However, there is an inherent quirk in the way the American economy works that makes environmental bailout an unlikely prospect for America.

The way free markets work depends on the use of capital. There are two types of capital this article is concerned with; human capital, which are workers, and physical capital, which are the tools workers use to make consumer goods. Physical capital is especially important, firstly, because you cannot replace it like you would a worker, and secondly, because many types of tools require a certain type of resource, like gasoline.

If you change resources in a capitalist system, like switching from coal to solar electricity, then it will cost all the existing coal electricity companies huge amounts of money to change their coal power plant into a solar power plant. They will also have to retrain/replace all of their existing employees. Then they will have to scrap all their worthless coal power machines, incurring another huge loss. The American economy simply cannot sustain the changes needed for an environmental bailout. The only way this will ever happen is in an environmental dictatorship, and that would only be possible in a world like the one from MADMAX.

The other much slower method of achieving an environmental bailout is the one we have been promised since the 90’s, and short of apocalyptic circumstances, is all we can realistically hope for at this point in our politics. The government provides some tax incentives and some grant programs to foster green entrepreneurship. This works in theory, but the fossil fuel dependent industries have not switched over enough of their capital for the reasons listed in the paragraph above. Perhaps this is because these programs are not mandated.

Here is one possible remedy. It requires lots of money, but of course that is why it is entitled the environmental bailout.

Companies should receive a large tax incentive to switch over 10% of their physical and human capital infrastructure each year. However, a tax incentive program by itself is too slow, and companies also need money to retrain or hire new employees. This is why the government should mandate grants of taxpayer money for physical and human capital expenses that companies incur when they convert the infrastructure of their companies to use renewable resources like solar, wave, and wind power.

This environmental bailout money would change America in that we would be an increasingly self-sustainable nation. All of these jobs would be good, long-lasting, American jobs.