Are investments into green energy macroeconomically costs?

Kai Neumann

Modell aus Perspektive des Faktors Spending Power

PI

This is the usual way we model the underlying background of a transformation towards green energy: The investment is quite good for some parts of the economy but overall it increases the costs of energy and only in the long run it decreases them through less use of fossile energy. But, ...

Modell aus Perspektive des Faktors Investments into green energy

PI

... if we widen the system's boundary we see both - a further advantage as the longterm benefit of alternative energy lies in a massive decrease in prices and the disadvantage that our competitors short term get a free decrease of energy prices while our prices increase. If we then look further, though, these advantages in part might be compensated to a certain degree as long as we export something other countries need from us. If that is the know how of alternative energy it is seems okay that some industries fall behind short term while others gain a long term competitive advantage for the export to countries that can still afford to buy our technology.

PS: If in turn (not modeled here) other countries start the transition it is plain logic that our overall economy will fall behind.

PI

Short term investments into green energy cost more than the alternative of continued use of fossile energy....

PI

.... long term however the investments could prove to be costs at all while the continued use of fossile energy remains a systemic sink.