But from an environmental, not spending the money in the first place (not upgrading a car or phone) in both cases would be a net win for the environment.
If you just take the money and bury it in your backyard forever, the central bank will just replace it after a while. (Assuming a typical inflation targeting central bank. And also in aggregate, because the central bank doesn't know exactly how much money is getting buried; but they do monitor total spending in the economy.)
If you leave the money in the bank, the bank invests it.
If you want to make a positive difference, you can use the money to contribute to eg carbon reduction efforts.
The rest of what you are saying is right: there's better and worse ways to spend that money. (In the worst case, you could buy a few tons of coal and just set them on fire.) I'm just saying that earning money and not spending it at all, doesn't automatically mean zero net emissions.
But since we are at it: loans create deposits only in some narrow technical sense, but not in practice.
You are right than in the logical second when a bank makes a loan, they just create a pair of accounting entries out of thin air. One entry in your checking account, and one entry to record the loan.
I hope you agree that most people don't take out loan to let the money just sit in their account: they spent it.
For simplicity, let's assume the common case that the people the debtor spends their money at, don't have an account with our bank.
Our bank loses reserves, when people spend deposits. It doesn't matter whether they spend via withdrawing as cash first or whether they make a bank transfer.
A bank can not operate with negative reserves.
They get more reserves by either accepting deposits or by borrowing them.
Does this make sense to you? If not, where am I going wrong? and why do you think banks accept deposits in the first place or issue bonds in their name etc?
(For simplicity, let's assume no (positive) legal minimum reserve requirements. But also let's assume that banks need a positive level of reserves to operate; eg to pay out withdrawals and net-settle interbank transfers.
If you want to challenge those assumptions, we can do that, too. But please say so explicitly. Thanks!)
Basel III makes no mention of reserves, but it does talk about liquidity. Liquidity can be and is met through interbank lending, with the center bank filling in as necessary.
https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m... https://en.m.wikipedia.org/wiki/Basel_III http://www.debtdeflation.com/blogs/2009/01/31/therovingcaval... https://positivemoney.org/2011/04/monetary-reform-myths-1-10...
A nice bonus link on interest rates not necessarily controlling inflation in the expected way: https://new-wayland.com/blog/interest-price-spiral/
For the same reason they pay interest on deposits: https://new-wayland.com/blog/why-banks-pay-interest-on-depos...
These are fun weekend/special occasions vehicles.
People would benefit from living in smaller houses when it comes to heating too. Should we legally mandate small rooms with claustrophobia-inducing celling heights?
People like different things. Some people like their pickups. Maybe they find their size more convenient and comfortable. We don't know that. We do know that people made that choice out of their free will.
Cars and trucks aren’t the issue we should be arguing about. Nothing is being done about shipping, cruise lines, and big industry. It’s a classic tactic for corporations to focus the government on individuals instead of themselves. Here you are falling for it hook, line, and sinker.
Not sure what you mean, there's plenty of regulation on those. Eg most of the world has just recently gotten much stricter about what fuels you can burn in ocean going vessels. Though maybe not as much regulation as you want? Or the wrong kind?
In any case, I mostly agree with you. And regulation shouldn't focus on micro-managing individual people or even individual industries: just tax emissions, and let people sort it out according to their own preferences.
No need for any politicized discussions about lifestyles that way.
(If other countries don't follow suit with the carbon tax, just do adjustments at the border like what countries do for VAT. That'll automatically also do the right thing for the other countries that do also have a carbon tax.)