I think the enormity of the present predicament is so ‘daunting’ that drastic measures are needed - now. Yes, people’s governments can force the construction of renewable-energy infrastructure, and create publicly-owned Green Banks to magnify local investments through targeted loans. Conversion to Green Energy is the most valid use of ‘printing money’ I can think of (much better than going into debt over war for oil, as the United States does). In a nation of fiat currency, and in keeping with MMT theory, a nation can and should go into debt, but only for the right causes. This is one of them.
But one major obstacle looms, and that is the ‘money power’, that which we see in the Davos gathering. They will fight with every self-serving and propagandizing tool in their toolbox to prevent nations from converting to Green Energy, so they can preserve their return-on-investments in oil and coal reserves. The result will be doom for civilization, over a situation in which the world would have run out of oil anyway 50 years from now.
My understanding is that the nations and companies which own the oil reserves have already ‘mortgaged’ most of their 1.6 trillion barrels of proven reserves, and international banking is holding the notes. Or, another way to put it is the reserves have already been pledged as collateral for loans in general.
The people will have to confront the money power. It will resist. So, getting to my point, I think the people of the world should go into debt (nation by nation) to buy out the owners of oil (and also coal). But, the owners will have to share in the pain. This can be done by forcing them by carrot and stick to divest and abandon their oil fields, locking them down so that the fossil fuels stay in the ground, permanently. But, we the people will pay them 20 cents on the dollar, in the form of either tax credits or cash payments, for their closed fields and existing infrastructure. 20 percent is a portion of, and not the full amount of, the present worth of their holdings (which is, say, 50% of $160 trillion dollars), so it also includes a sacrifice on their part to accept losses in the expected profit from their future sales and development.
Because of their forced losses, I propose we also grant them a 20 percent tax credit for investing in solar, wind, and tidal energy. So, say Exxon closes $100 billion in oil fields, they receive $20 billion in cash, and another $20 billion in tax credits, if they invest $100 billion in Green Energy. The people gather a debt of $40 billion, and conversion is complete. The above payout is the carrot. The stick is the law created by legislatures to force this sell-off (or what might be called the ‘nationalization of the oil industry’).
One could call this plan the “VISION 20-20” plan for closing the world’s oilfields and assisting the major stockholders and financiers in the fossil fuel industry to go green. The name also correlates with the year of the next election cycle - 2020.
While some may argue that this plan capitulates to the oil industry, it achieves the salvation of the planet’s habitability and will alleviate much predictable suffering. I estimate the time it will take to do this is 30 years. The US could go into debt, say, $15 trillion over that time frame, but it would be worth it. Everywhere would be electrical charging stations for transportation, and wind and solar farms for distributed electricity. As the US is responsible for roughly one-fourth of world consumption, the world total debt for conversion would be estimated at about $60 trillion. This should satisfy the owners of industry that we force to convert.
Thank you .
David Hamilton, Civil Engineer