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David Brady
David is a a double major in Economics & Finance at Florida Southern College. He is an Austro-Libertarian, a co-host of the “Econphonics” podcast, and an Apprentice at the Ludwig von Mises Institute.
If one is on social media, they are likely already acquainted with the fear mongering that is the “climate crisis.” While many rightly regard it as a manufactured crisis for government overreach, it also lacks an understanding of the structure of production in its demands.
The claim for this crisis rests on the supposed destruction of the planet that will come to be if humanity continues in its current industrial capacity. The common demands of the activists are the halting of fossil fuel contracts, the creation of federal agencies to address it, or legislation like that of the “Green New Deal.”
It’s not simply the cries of anxiety-ridden college students, though they certainly act as the foot soldiers for this cause. Political interests in the United States and Europe have expressed their care for this issue as well. President Joe Biden established an Office of Climate Change as a part of the DHS. Prominent progressive politician Alexandria-Ocasio Cortez (AOC) has made climate change one of her pet issues, accusing the President of not doing enough to tackle the issue. In Europe, even the monetary authorities have made it their role to play policymaker. Christina Lagarde, the president of the European Central Bank, has made a pledge to use monetary policy to reduce carbon emissions before the ever-touted 2030 deadline. Fortunately, her American counterpart—Jerome Powell—has so far rebuked the same demands of the Federal Reserve.
How feasible are their demands? Just for the sake of argument, let’s assume the science is correct in terms of function: that human action is the largest contributor to changes in weather patterns and the atmosphere. So, what of the demands? Is it feasible to eliminate all fossil fuel use? The short answer: no. The long answer demands an understanding of the structure of production and the complexity that is getting common goods into our hands.
Fossil fuels are not simply used for gasoline and diesel fuel in vehicles. Fossil fuels typically include oil (or petroleum for those in the Old World) and natural gas (such as methane and fracked gas deposits). 80% of energy globally is produced by some form of fossil fuels. “Renewable energies” marketed by climate activists are simply unable to provide the energy needed to combat the elements—evidenced by the power failures of Texas.
But fossil fuels’ involvement in the economy hardly stops there. Oil is a primary ingredient in the creation of plastics, and not simply the single-use plastics that are so often decried. The interior of vehicles, for example, are made of plastic. Even the exterior of many vehicles as well. This is done not for style, but for safety. When cars are made of plastic that crushes during impact, they absorb much more of the force and save lives.
Simply think of Leonard Read’s classic essay “I, Pencil.” How many of the goods, and components for those goods, are transported by these vehicles every day? How many laborers create those goods? Those laborers need to be transported as well. If we eliminated the use of fossil fuels, how many lives would be lost because of the increased danger of vehicles?
Just from this one example alone, it can be understood just how critical even one product made by fossil fuels can be in the economy. And this is just scratching the surface. There are so many consumer goods and producer goods made with oil: tires, lipstick, synthetic rubber, crayons, fishing rods, dyes, anesthetics, fertilizers, and so much more. Many of these goods are valued in their direct service of human desires, others have value in their service of producing consumer goods, and some for both uses.
To remove fossil fuels from the economy would thus remove hundreds of kinds of consumer and producer goods from the marketplace. If one was to trace any given good backwards from its components to eventually land and labor, practically every single good in any advanced economy would intersect with fossil fuels at some point. Even the famed “I, Pencil” will eventually touch fossil fuels.
Fossil fuels are so ingrained into the production process that it would be simply impossible to remove them from the global economy without making everyone drastically poorer. Every attempt would result in the destabilization of the market process. So, what should be done? There is a good case that private property rights could be the key to protecting the environment. Markets deliver innovation and efficiency, and if the goal is to protect the environment, then they will deliver. We should not overthrow the standard of living provided by fossil fuels. Rather we should let the market do its work. To slightly modify a quote from 1993’s Jurassic Park: The market [uh] finds a way.
This article was originally published on FEE.org. Read the original article.
