Paul Krugman: Invest, Divest and Prosper

The war on coal won’t cost jobs in a depressed economy, it “could be just
what our economy needs”:

Invest, Divest and Prosper, by Paul Krugman, Commentary, NY Times: It
has been a busy news week, what with voting rights, gay marriage and Paula
Deen. Even so, it’s remarkable how little attention the news media gave to
President Obama’s new “climate action plan.”…; this is … a very big
deal. For this time around, Mr. Obama wasn’t touting legislation we know
won’t pass. The new plan is, instead, designed to rely on executive action.
This means that … it can bypass the anti-environmentalists who control the
House of Representatives.

Republicans realize this, and … right now they don’t seem eager to attack
climate science, maybe because that would make them sound unreasonable
(which they are). Instead, they’re … denouncing the Obama administration
for waging a “war on coal” that will destroy jobs.

And you know what? They’re half-right. The new Obama plan is, to some
extent, a war on coal — because reducing our use of coal is, necessarily,
going to be part of any serious effort to reduce greenhouse gas emissions.
But making war on coal won’t destroy jobs. In fact, serious new regulation
of greenhouse emissions …

It’s always important to remember that what ails the U.S. economy right now
isn’t lack of productive capacity, but lack of demand. The housing bust, the
overhang of household debt and ill-timed cuts in public spending have
created a situation in which nobody wants to spend; and because your
spending … this leads to a depressed economy over all. …

Suppose that electric utilities, in order to meet the new rules, decide to
close some existing power plants and invest in new, lower-emission capacity.
Well, that’s an increase in spending, and more spending is exactly what our
economy needs.

O.K., it’s still not clear whether any of this will happen. Some of the
people I talk to are cynical…, believing that the president won’t actually
follow through. All I can say is, I hope they’re wrong.

Near the end of his speech, the president urged his audience to: “Invest.
Divest. Remind folks there’s no contradiction between a sound environment
and strong economic growth.” Normally, one would be tempted to dismiss this
as the sound of someone waving away the need for hard choices. But, in this
case, it was simple good sense: We really can invest in new energy sources,
divest from old sources, and actually make the economy stronger. So let’s do
it.