Op-Ed: Global Warming is Real

Developing nations could go solar in fighting climate change

     We all know that fossil fuels cause the greenhouse effect and global warming. The question is how to stop it. For decades, activists protested against nuclear power. Germany closed many nuclear power plants. To generate electricity they are now burning dirty coal. Green energy—wind and solar—is still a very small part of the energy mix worldwide.  Meanwhile, the greenhouse effect is becoming stronger and more deadly. Recently, a devastating heat  wave with 100F-plus degrees hit, of all places, the North Pacific region. It is clear that we have to double our  efforts, but what exactly can be done?

    Africa has plenty of sunshine and unemployed labor workers to manufacture solar panels, both for domestic use and for export. But how to finance construction of the manufacturing base? At the present time, developing countries borrow money from the International Monetary Fund  (IMF) and the World Bank, but these two institutions are not up to the task. African countries should start using the Modified Keynesian Theory. A Central Bank of any country can print local currency and make loans to build the manufacturing base to produce solar panels. When currency is loaned, it increases the money supply (the amount of money in circulation). When the factory is built, it can be sold to private investors. The buyers of shares of stock  will pay money which will be used to pay back the loan to the central bank. Alternatively, the owners of the factory will pay back the loan over a number of years. When borrowers pay their debt to a bank, the money supply is reduced by the amount paid. So, currency is printed and loaned, money is invested to increase the wealth of the society, and in the end, the loan is paid back. In the long run, there will be no increase in inflation. There is no need for IMF loans. Loans to buy machinery and equipment for the manufacturing base can be obtained from commercial banks. 

If African countries could build at least a dozen factories to manufacture solar panels, it would significantly increase industrialization of Africa, and it would use green energy. In contrast, manufacturing industries in China use coal and gas to generate electricity. China is building hundreds of coal-fired power plants which will be generating carbon pollution for many decades in the future. Still, we should not blame the government of China, which is very competent and capable. They are just protecting the interests of their own country, and the whole world be damned. This is ” China First!” policy in practice, if not in words. 

So here is, in a nutshell, a proposal. Let’s help African countries to finance their industrialization using the Modern Keynesian Theory.  Construction of factories to manufacture solar panels must be the very first step. Let’s move the manufacturing from China to Africa, so that it will be done with solar energy. The simple truth is that as long as China is  burning millions of tons of coal to generate electricity for its manufacturing, there is no hope to reduce global warming. Also, the Biden Administration  should increase tariffs on imports from China. At the present time America is only encouraging China to burn more coal and to increase global warming.