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Comment by yokaze | Hacker News Reader

Funny, that you say that. I actually think, policy based deprecation is the biggest possible boost the economy could get.

Think CDs Vs Vinyl, VHS to DVD. Or more on point: Catalytic converters.

Having to buy new stuff drives the economy, being content with "what works" throttles it (e.g. mobile devices, laptops).

Sure, there might be a backlash, but it's not like there isn't any opposition now.

Being to cautious (i.e. slow) bears the risk that people resist change because you are slowly (ergo constantly) changing things, and they don't see the benefit of the policy change.

(Assuming that it is indeed the case)

Edit: missing verb

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I see what you're saying, but I'm not sure it's analogous. Lets say the cost of gasoline triples in the next 5 years because we're killing all subsidies, ending federal leases, etc., enough to justify everyone to make investments in electric cars. We literally can't make them fast enough. Making a million CDs was easy, but our heavy industries take a lot longer to tool up. Tesla is struggling to scale their supply chain, and they're consuming almost half the world's battery supplies right now to make a few hundred thousand cars per year.

And that's just cars - not including semi-trucks, farm equipment, buses, trains, shipping, etc.

Best case we need a decade to start manufacturing those things at scale and two decades to manufacture them at a pace that can start replacing all the existing vehicles. That's a long time for anyone stuck paying for gas.

And it's a similar situation for the Electricity sector, Cement and construction, and dozens of other industries that emit carbon. It's a really complicated transition - far more than switching media formats.

Making a million CDs involved building entire new factories to meet demand. Making a lot more electric vehicles could reuse a lot more existing factories (and/or recently shuttered factories) if demand shifted enough away from internal combustion to retool a lot of existing lines in place. The difference between an EV and an ICE car on the factory floor are fewer than between a cassette tape and CD.

Whether or not, say, Detroit is still capable of making a rapid shift to such a demand change is certainly a new question, and indeed supply chains would have to follow. On the other hand, again, the supply chains are a lot closer between EVs and ICE Vehicles, and if anything EV supply chains are simpler on paper with one big exception (batteries). But that big exception is one that is already busy scaling drastically and generally seems to know how to scale to demand (because it touches so many other industries such as computing).

It's a chicken-and-egg nightmare, certainly, that heavy industries aren't going to scale it unless they have no other choice, and the reasons to give them no other choice may have some transitional hiccups. That said, the capability to make that rapid shift is theoretically in a really strong place, we have the technology and wherewithal if we made it a priority.

The real issue here is that there is a natural market replacement rate. You sell a million cars a year even though there are 25 million of your cars on the road. That means it will take 25 years to replace all of the cars even if you switch 100% to the new type. If you want to replace them all in 15 years then you would have to sell below cost in order to induce more than the typical amount of demand for new cars.

So replacement at the natural rate is economical, replacement at a faster rate gets expensive quickly. To do that you have to force people to replace cars they otherwise wouldn't have, which either means more subsidies (expensive) or taxes (expensive), or both. On top of that it requires the resources spent on the existing car to be lost when it gets removed from service before its natural end of life, and it causes you to have to build excess manufacturing capacity to build more than the natural amount of new cars, which then goes idle and has to be written off once all cars are of the new type and the measures to artificially stimulate demand are discontinued.

All this to say that it's quite important that the transition starts now with as many electric vehicles as possible, because the more we do now the less we have to compress the timeline later and pay all of these costs.

I think that's part of what I was getting it: that precisely because it would be a useful challenge for our somewhat complacent heavy industries, it may be something useful to force their hands, because they probably aren't likely to do it until it is too late unless forced. Because it would be a challenge isn't a reason not to force it. It's a "Moon shot" problem, we can go to the moon this decade, but we need to be forced.

The problem right now is that carbon isn't priced and there consequently isn't much incentive for individual companies to do it at all, much less right away. Change that and there is suddenly much more demand for new vehicles that don't burn carbon, at which point industry knows perfectly well how to manufacture to meet market demand.

I agree. We should have been taxing carbon as far back as at least the 70s around when the idea was first proposed. Establish cap and trade then too if we are asking for ponies that were PRed to death by business men to avoid externalities.

Separate thought related to this--

I've personally made the following investments to reduce the amount of carbon dioxide I'm directly emitting -- and these are the sorts of things we'll need millions of people to do in the coming years:

* 6kw of solar panels (no A/C): $22,000 * Powerwall batteries to power house when not sunny: $18,000 * Whole house insulation as part of remodel: $15,000 * Conversion of all kitchen appliances from gas to electric: $5000 * Replace gas water heater with electric heat pump: $3-4000 * Electric car: $30k+ (mine was $50+)

The remaining gas-powered appliance in the house in our furnace, which I'll get to replacing in the next few years (est $15k) - at which point we'll probably also have a second electric car, and need to increase our solar production as well to keep up.

How many people can afford the above list for their homes? In 10 years if the above items cost half what they do now, how many can afford it then? How many landlords are going to make these investments for rental properties?

The transition we face is potentially economically stimulating (there's a lot of stuff to replace!), but also has really high up-front costs (and sunk costs) that will have to be managed. This goes both for national infrastructure all the way down to people's homes.

Pretty much nobody can afford to do that. At best you could stop selling new gas appliances and gas cars at some point and then wait 20 years for the old ones to naturally fall out of use. But a corollary is that you have to slowly ramp up carbon prices over 20 years.

I wonder how much carbon was emitted from all your investments.

More than 0, hopefully less than will be offset.

But I think part of why you were accused of short term thinking here is that if we don't spend the carbon to build things like solar panels now, we'll never move off a carbon economy. We have to accept that manufacturing of anything isn't entirely green right now, but the solar panels we make now will enable the next solar panels to be built with less carbon, which will enable the next batch to be built with less carbon, etc.

Carbon will power the innovations that get us off carbon - no way around that. But we still have to do it so we can get to that end state where entire supply chains are electrified with renewable energy.

Short term thinking

As someone who doesn’t own a car or fly anywhere because of climate change I don’t think you can accuse me of short term thinking.

That's really good to hear. It wasn't a personal attack, just calling out that one specific point you made. For reasons the sibling post pointed out.

To add to this, which I think is entirely correct, it took the effects of spending on arming for WW2 that finally brought the world out of the Great Depression. Unemployment went down and the economy surged. The US New Deal helped but it wasn't nearly enough.

Edit: Is this controversial somehow? I thought it pretty standard and well known history.

There's an old remark: "Recession and depression are the easiest things in the world to cure -- just print money.".

The cause of our recessions and depressions was suddenly too little money. That is, a lot of money was destroyed. How? When the banks, etc. got in trouble, the multiplier effect enormously reduced the money supply.

Soooooo, have some new regulations on reserve ratios, etc. for banks and then print the missing money. The new regulations will keep the banks, etc. from using the newly printed money and the multiplier effect to create too much money and inflation.

Many millions of people died before these ideas were accepted.

How to print money? One way is for the Federal Reserve to buy bonds from the US Treasury. Then the Treasury has the money and the Federal Government can spend it, e.g., on roads, bridges, dams, etc. Another way is for the Federal Reserve to loan money to the member banks, and the banks loan the money to people who want to buy houses, cars, commercial buildings, etc.

How did WWII get us out of the Depression? Once people started shooting at us, we were willing to print money for the war. But we printed about the right amount since after the war we didn't have massive inflation.

The US Government started printing money as you say for government projects as early as 1930, 12 years before the war. Hoover dam for example. So are you saying it takes 12+ years for your theory to work? Also, how many millions more have died due to over-printing of money? MMT is a disaster waiting to happen because at the end of the day Credit=Trust and you can only borrow so much before you lose that trust. Trust is everything and debt is an incursion.

They printed money starting in 1930? Yup, the dam. But they didn't print enough.

And Bernanke didn't print enough fast enough -- we were in the Great Depression for about 12 years and nearly that long in the Great Recession. Bummer.

You are correct about the threat of inflation. But we know how to stop inflation: Reduce the money supply, e.g., by raising interest rates. Then the member banks will return their loans from the Fed.

So MMT stands for <i>modern monetary theory</i>? Uh, I tend to avoid any theories from economists and stay with simple observations.

If you look at debt between 1920 and 1945 you see that between 1940 and 1945 the war economy resulted in private and corporate debt replaced almost entirely by Federal government debt.

After 2008 the Chinese government dealt with falling demand and exports by building 10,000km of high speed rail network.

In either case despite dire predictions of economists the sky didn't fall in.

Also riddle this: The US spent about 2% of gdp to send a dozen men to the moon. And the sky didn't fall in either.

The US can certainly spend a couple of single digits worth of GDP on renewables without everything falling apart.

> Also riddle this: The US spent about 2% of gdp to send a dozen men to the moon. And the sky didn't fall in either.

The sky fell in on the Soviet Union. The main difference was the Marshall plan and the fact that the US was financing the rebuilding of Europe

> The US can certainly spend a couple of single digits worth of GDP on renewables without everything falling apart.

Yup, not everything would "fall apart". Yup.

But 50 projects each taking just 2% of GDP would take 100% of GDP! 2% of GDP is a lot, e.g., what the NATO countries are supposed to have been spending on defense but long didn't.

Let's see: IIRC Trump is spending about $807 billion a year on defense, and just now from Google the US GDP per year is about $19.39 T. Sooooo,

100 * 807 / 19,390 = 4.162

says that we are spending just over 4% of GDP on defense. So, a "couple of single digits", i.e., if I read you correctly, would be 2% of GDP and about half of defense -- definitely not small potatoes.

I have a friend with a lot of money in a family with a lot of money. Whenever anyone asks him to spend some of his money, his first question is "Why should I?". Without a good answer, he doesn't.

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