In his latest book “The End of the World is Just the Beginning” geopolitical strategist Peter Zeihan highlights some potential vulnerabilities in the hope for green technology to prevent climate change.
One major concern is the financial crunch that will occur as baby boomers retire. As they leave the workforce, they will also take with them a significant portion of the financial capacity needed to finance green tech power plants.
The cost of installation for a green tech power plant is relatively low, but the upfront financing needed is significant. If the cost of financing increases by just 50-100 basis points, the project can fail. However, as the financial crunch caused by baby boomers’ retirement sets in, the cost of financing is likely to increase by 500-1500 basis points, making it much harder to finance green tech power plants.
Another concern is the manufacturing of green technology. Currently, solar panels are assembled in China, but there is nothing about the technology that prevents it from being relocated. The issue is that assembling solar panels requires fingers and eyes, which can’t be automated.
America is too expensive, and Mexico is too skilled, so another country would need to be found to take on the assembly. Columbia may be a potential option, but the industrial plant would need to be built at a time when North America is also trying to double its industrial plant due to deglobalization, cheaper energy, and a more stable labor market.
Overall, while green technology holds great promise for preventing climate change, there are significant challenges that must be addressed. The financial crunch caused by baby boomers’ retirement and the manufacturing challenges of green technology will need to be addressed if we hope to see widespread adoption of green technology in the near future.
