So Bush and the Fed have fired the starting-pistol, the phoney war is over, and the 2008 financial crisis has officially kicked off.
And with immaculate timing, Presidente Barroso announces the EU’s masterplan to reduce carbon emissions, at a cost he estimates at € 3 per citizen per week, or 0.5% of GDP. Or perhaps more … “some commission officials acknowledge the bill might be double that”
If this sounds a bit like the way the Olympics is costed, that’s because it is, and capitalists@work confidently predicts the bill would be way, way higher if the EU’s energy targets were to be met. Although space doesn’t permit detailed analysis here, it should be understood just how extraordinarily difficult it would be to meet those targets: we are talking full-scale rebuilding (and/or closure) of vast swathes of industrial and energy infrastructure. The nearest recent analogy would be the Deutsche Einheit (reunification) which cost
Taking the lower end of that range, and pro-rating for population, that leads one to estimate Barroso’s environmental bill at €12 per citizen per week, or 2% of GDP, with plenty of scope on the upside - at a time when GDP growth is in full retreat, a credit crunch is in full swing, and economic pessimism is mounting. Which is why we couched the above in the conditional: the bill would be way, way higher, if ...
But when push comes to shove – and the shoving has just started in earnest – we strongly suspect environmental concerns are trumped by economic worries. Presidente, you are just too late.