In coinage green vortex, I borrowed from the work of Nina Kelsey, professor of international affairs at George Washington University, who argued that combining financial incentives and technological change in a “green spiral” can lead to decarbonization.
âThere is so much energy spent trying to convince people of what we need to do about climate change,â she told me. “I think it’s gone as far as we can go.” What will solve climate change now, she says, is making it profitable for businesses to tackle climate change.
Hope this thesis is correct. Under the United States’ new commitment to the Paris Agreement, announced by President Joe Biden in April, the country will have to double the rate of its emissions decreases over the next decade. Whatever we do well, we’ll soon have to do it twice as fast. Soâ¦ you knowâ¦ we better find out what it is.
The idea behind the Green Vortex is this: Practice allows you to improve. The more we do, whether it’s baking a cake or building electric vehicles, the better we get at it. (Economists call this âlearning by doing.â) This idea may seem intuitive, but it is often overlooked in policy conversations. Over the past five years, learning by doing has driven down the cost of semiconductors, solar panels, and electric vehicles.
The green vortex uses this idea to describe a positive feedback loop. Politics can accelerate the pace of technological development. As technologies evolve, they become cheaper. As they become cheaper, more and more companies are adopting them. As more companies adopt them, their executives become more comfortable with climate policy in general, and more supportive of pro-technology policy in particular. As more business leaders support climate policy, coalitions change, governments can take more aggressive action, and the cycle expands and begins again.
The central mechanism here is that grants accelerate learning by doing. Any industry would end up figuring out how to make a product inexpensively; grants advance this learning over time, so that the unsubsidized price starts to look attractive more quickly. âYou are trying to grab the leverage that is accelerating the pace of cost cuts,â Jenkins said. “This is where politics has teeth.”
Vortex cycles can start slowly, but there is a lot of evidence for them. Nemet, the professor from Wisconsin, brought one particular case to my attention. In the 1970s, in the midst of a global surge in the price of oil, Denmark began to plant a local wind industry. In the early 1980s, this small country known for its maritime culture and cheese-filled pastries found one of its biggest markets in the United States, when California began subsidizing large wind farms. In 1990, three quarters of the installed wind capacity in the world was in this state. Cheap solar power emerged from a similar global alignment, Nemet’s work showed, this one between Chinese factories and German tariffs in the early 2010s.