‘Greenflation’ is making everything more expensive – Mark Glennon

There is one word you should know if you want to understand some of our sky-high inflation. This is “greenflation,” which means the rush toward renewable energy is driving up the price of everything.

While green inflation is happening everywhere, because Illinois’ green energy climate policies are among the most aggressive in America, our state is the main culprit.

The prices of basic goods, which influence most purchases, have increased over the past five years. For example, copper prices, which are widely seen as representative of commodity prices, have increased by more than 60% during this time.

“New government spending is boosting demand for materials needed to build a cleaner economy,” a leading global financial strategist wrote in the Financial Times. “The unintended consequence is ‘greenflation’: rising prices for metals and minerals such as copper, aluminum and lithium,” he added.

And it’s getting worse. Green technologies “will account for the lion’s share of demand growth for most metals and minerals in the foreseeable future,” said a member of the European Central Bank’s executive committee.

Here in Illinois, green energy advocates celebrated the passage of the Climate and Equal Employment Opportunity Act of 2021 for leading the nation. Forces massive investment in solar and wind projects to replace conventional electricity production, requiring Illinois to achieve a 100% zero-emission energy sector by 2045.

Gov. J.B. Pritzker has made electric vehicle production a central part of economic development.

Meanwhile, the demand for electricity will grow rapidly. Renewable energy sources could never be expected to replace all conventional energy sources, but artificial intelligence’s new, monstrous energy demand is now driving a looming crisis.

According to the Manhattan Institute, each AI chip consumes roughly the same amount of electricity as three electric vehicles per year. Data centers with them consume huge amounts of energy, and their number is exploding. According to the Institute, the appetite for AI chips is explosive and essentially unlimited.

That’s why U.S. utilities are anticipating a “tidal wave” of new demand,” Reuters reported.

“Today’s forecasts predict near-term electricity demand growth three times greater than in recent years.” According to former U.S. Secretary of Energy Ernest Moniz, some utilities “don’t know how they’re going to put enough generating capacity online.”

More demand with insufficient supply inevitably means higher consumer prices for energy itself – and this is in addition to the impact of green inflation on other prices.

Sure, it’s all bad, but we’re saving the planet from global warming, right? This is because we adhere to the famous Paris Agreement standards for limiting warnings, which Pritzker committed to immediately after his inauguration. President Biden has made the same national commitment.

The global emissions reductions projected in Paris “are currently a fantasy,” as Steven Koonin, a senior fellow at the Hoover Institution at Stanford University, recently wrote.

“In 2023, emissions are at an all-time high and consumption of coal, oil and natural gas is at record levels,” Koonin wrote. Despite global investments in renewable energy of almost $12 trillion over the nine years ending in 2023, fossil fuels still provide about 80% of the world’s energy. The latest UN emissions report predicts emissions in 2030 will be almost double the level consistent with Paris aspirations.

Inflation has many causes, but ecological inflation is the most important.

And as the obsession with global warming and renewable energy continues, you can count on prices to get even higher.

Mark Glennon is the founder of Wirepoints, an independent, not-for-profit research and commentary organization.