$100 trillion? Opportunity or sinkhole? The reaction so far.

The law of holes: “When you find yourself in a hole, quit digging.”Will Rogers

As noted in a previous LOTRW post, the world’s peoples face a $100T bill coming due. That’s how much nations must spend over coming decades to refurbish and augment the critical infrastructure that maintains an adequate, uninterrupted supply of food, water, and energy to seven billion people.

Of course, there’s a difference between merely spending $100T, and wisely investing that sum. Such investment faces substantial risks. Of the many challenges, three stand out:

  • flawed governance/corruption in the countries involved;
  • lack of skills/knowledge needed to operate, maintain the infrastructure (alternatively framed; investment in inappropriate technology); and
  • failure to take fullest account of the environmental consequences of such investment, the changing weather and climate conditions over the lifetime of the infrastructure, and the needed resilience to extremes over the same period.

The latter point motivated a guest-perspective expanding on this general idea, graciously published by the Washington Post’s Capital Weather Gang. That piece argued that instead of cutting EPA and NOAA budgets, as suggested by the new administration, now is the time for substantial budget increases – even doubling down – in these agencies and their important work. The work they do (with some work from USDA, USGS, NASA, DoE, NSF, and others thrown in) is the difference between flying blind into a problematic future and proceeding intelligently.

These ideas have received some favor, but not universal acclaim. The pushback has come from three different directions. First, a colleague whose opinions I’ve long respected, John Plodineccommented on the previous post in this vein:

We need to invest $X T so that … why? Is this to provide energy and water systems to folks who won’t be able to maintain them? Or to provide those services in ways that may not be culturally appropriate? Or simply to provide funds to bureaucrats and their governmental sponsors? We can’t provide these things without the education to service them and people who want what we can provide.

 Are Americans supposed to pony up the dough? Hard sell, especially after the wealth we have transferred to other countries this century – an amount equal in value to all of the gold ever mined.

 If these numbers are real, the investments are not sustainable. The ONLY HOPE is for innovation, esp. at the local level. Our increasing agricultural productivity this century indicates that we can innovate even in endeavors as mature as agriculture. But in the US (and much of the developed world) we are still providing energy and water to the populace in essentially the same ways we did in the ’50’s and ’60’s.

 Governments can help – and if they have discretionary funds they can help a lot. But they are not really the answer. The UN is not the answer. If there ever were problems demanding “Whole of Community” approaches, providing potable water, food and CARE (consistent, affordable and reliable energy) to all certainly qualify. But the answers must be local: what works in the US now may not work in a Third World community. However much we may want to see all people adequately fed, watered, and powered, ultimately they will have to forge their own path to that state.

Second, there was the CWG readership. Some were put off by attention to this subject in the midst of the buzz this past week about this coming Monday-Tuesday’s weather and the possible snow/impacts for the DC area. But others stayed on point: some favorably, others not. A couple of the most acutely critical comments:

In total, the world needs to invest $100 trillion in infrastructure over the next 20 years….The United States can pay off its investment easily if our private enterprise can win its share of this far-larger global market.

So you are saying we should dump more money into the EPA because that will help us win global infrastructure contracts?

I read your article a couple times and I can’t figure out what you want NOAA and EPA to spend more money on except this:

continuing investment and innovation in Earth observations, seasonal-to-inter-annual forecasting, water resource management, and risk communication and other social science, as well as working with local publics on the ground through the National Sea Grant Program, Weather-Ready Nation, and other initiatives.

Sounds like a few million dollars to me. But no, you want billions.

And this one:

Trump wants to increase military spending while we’re in no danger of being invaded. I don’t agree with that decision, but, even without that, our government spends way more than it takes in. The national debt doubles every 8 years. It’s not sustainable.

People want our government to do everything while not having their taxes go up. The reality is if we had to pay for everything our government does, our taxes would be so high that our economy would collapse. People would lose their homes. The best way to solve the problem is to reduce government spending and it unfortunately involves reducing government services.

Sandwiched in between I had a lunch conversation with a good economist friend, a former Cornell professor, who has also worked at the Federal Reserve, the Congressional Budget office, and the World Bank in addition to doing private consulting – a guy I’ve admired for decades, ever since he was a senior and I was a freshman at the same college.

I shared some of these ideas with him and tried to draw an analogy to the success of the Marshall Plan. Back then, at the end of World War II, the US had a GDP of $150B/year (compare with today’s $15T) and a national debt of $180B (incurred from the Great Depression and the expenses of the war; compare with today’s $18T). Our ancestors invested $15B in Europe over the next four years, to rebuild the economy/forestall a Soviet hegemony over the region. It not only worked but more than paid for itself. By the end of the four years, the U.S. economy stood at $300B a year, and Europe remained free of Communist domination. My friend’s response was immediate. He pointed out (not an exact quote):

…the Marshall Plan succeeded because prior to the War, Europe had enjoyed technological and economic superiority. They didn’t have to gain new ground; they merely had to bounce back. When it comes to this present-day challenge, the countries needing the investment lack the capacity to build, maintain, and operate such infrastructure.

(Okay! Should. Stop. Digging.)

Naah…

These ideas, and the high stakes, are too important not to explore, discuss further. In particular, there’s the appeal of jobs. $100T, as the previous post’s graphic drives home, is too big to put under the mattress… or even in a Swiss bank account. It has to generate jobs. So, going forward, I’ll provide more detail, use bigger tools…

What could go wrong?

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One Response to $100 trillion? Opportunity or sinkhole? The reaction so far.

  1. Bill:-

    Thanks for [unwarranted] praise.

    I’m afraid that – lost in the GOP/Dem posturing – we are losing sight of an important shift that’s occurring in the Developed World. We are moving from an Age of Politics to an Age of Influence. Governance has become more diffuse; many more hands can reach the levers of power; and many more hands are needed to pull those levers to affect action.

    This is not true in most of the Developing World. There, one voice can still drown out the Many’s chorus. Thus, while we have charettes trying to engage the public, in many Third World countries a governmental strongman decides what actions to take with the limited resources on hand.

    Of great interest to me, something like this is going on in many of our smaller cities: a mayor or administrator recognizing a problem and taking action even in the face of limited resources and (usually) spirited opposition. Case in point – what Miami Beach is doing to combat sea level rise, esp. in terms of its infrastructure.

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