02/12/2019

Green New Deal: A Cautionary Tale

Tim Blair, The Wall Street Journal

Sydney

The Green New Deal—introduced in Congress last week and immediately endorsed by several Democratic presidential candidates—calls among other things for “upgrading all existing buildings in the United States . . . to achieve maximal energy efficiency.” We’ve tried it in Australia—on a much smaller scale—and it didn’t go well.

On Feb. 3, 2009, Labor Prime Minister Kevin Rudd and his treasurer, Wayne Swan, announced the Energy Efficient Homes Package. “To support jobs and set Australia up for a low carbon future the Rudd Government will install free ceiling insulation in around 2.7 million Australian homes,” declared a press release from Mr. Swan’s office.

“For a time-limited period of two and a half years, from 1 July 2009, owner-occupiers without ceiling insulation will be eligible for free product and installation (capped at $1,600) simply by making a phone call.” At the time, A$1,600 was worth about US$1,280.

In many cases those calls weren’t necessary. At the Daily Telegraph, where I work, we discovered something was amiss when our chief of staff ordered a pizza. To her surprise, the delivery man also offered an insulation quote.

There were only 250 registered insulation businesses in Australia when the package was announced. That number quickly blew out to 7,000 because the government was handing out free money to installers. Pizza drivers could pick up more in one insulation job than from a month’s worth of tips. They received their rebates directly from the government rather than from homeowners, who therefore had little incentive to check if the work had been done well or even at all. Some ceilings ended up with a mere handful of insulation batts thrown around. Others featured only shredded paper. Almost every insulation job went right up to the $1,600 cap, regardless of size or ceiling area.

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