Debating Global Warming Policy

The conversation of what to do about global warming is winding down over at Cato Unbound. I’ve found the discussion fascinating, and I learned a lot. I’d like to see a lot more discussions like this one about climate change policy, and I hope we set a decent example. There were some mildly raised voices, sure. But there’s also been a whole lot of data and scientific and economic reasoning exchanged. I guarantee that if you read through all the essays and replies, you’ll learn something.

Eat Local, Yokel

My Marketplace commentary this morning briefly discusses “food miles” and the “eat local” movement.

One commenter writes, “Eating locally and seasonally keeps more of the food dollar in the local economy.” But it is not the comparative advantage of some localities to grow anything. In that case, refusal to trade beyond local bounds will leave the local economy poorer. That is, you’ll succeed in keeping food dollars in the local economy only at the price of fewer total dollars for food and everything else. Please read Paul Krugman and Art Carden.

The study I mention “out of Carnegie Mellon University” is “Food-Miles and the Relative Climate Impacts of Food Choices in the United States” by  Christopher L. Weber and H. Scott Matthews.

It’s pretty mysterious to me why the miles traveled by food in particular is thought to matter more than, say, the miles traveled by my Chinese laptop. Rootedness? Purity? How are your laptop miles, America?

Should we minimize our “music miles” and boycott bands on tour? Thankfully, our next-door neighbors have a band, Dead Larry. We don’t have to go anywhere to hear them.

The Perils of Thumbnail-Enviro-Blogging

Ah, blogging. My post below was intended as, well, as a “thumbnail sketch” — “a brief outline or cursory description” — offered for critique by my commenters. It was the product of perhaps ten minutes of deliberation, laying out in stark terms the countours of a few lines of thought I have found appealing at first blush. And thanks to all the commenters for your critiques, which I value, and many of which I agree with.

That said, sigh. I am very grateful for Tyler’s link, for his broad agreement, and even for his terrifying apocalyptic imagination. But his naming the post “Will’s Theorem” implied a settled view that I do not have and a logical structure I certainly did not take any care to set out. Then my admittedly half-baked thoughts showed up on the Wall Street Journal economics blog, and then on Felix Salmon’s blog at Portfolio, where I am treated to a pretty good pummeling. Anyway,  now I feel semi-famous for a view I hold at barely better than even odds! Bittersweet.

Anyway, here are a few of Felix’s points, and some thoughts about them:

But he has no reason at all to believe that in the medium run environmental externalities are positive rather than negative. It’s entirely possible that in the medium run fossil fuels will remain cheaper than alternative energy sources, and that externalities will remain negative. It’s also entirely possible that by the time fossil fuels are so scarce that alternative energy sources are cheaper than their carbon-emitting counterparts, we will have pumped so much carbon dioxide into the atmosphere that it will be too late: environmental catastrophe will be upon us.

Will’s argument, it seems to me, seems to rely on the peculiar idea that we’ll run out of fossil fuels just in time to avert environmental catastrophe: that even if we don’t change our ways unilaterally, the finite supply of oil and coal wil force us to do so before it’s too late.

But scientifically speaking, there’s no reason to believe this. Carbon levels in the atmosphere are already too high, and they’re rising fast.

I completely agree that there is no reason to believe that coal and oil prices will happen to rise just enough, just in time to cause a seamless, universal shift to cleaner, relatively cheaper sources of energy. That is in fact silly.

I expect that what’s going to happen (what is perhaps already starting to happen) is that already very wealthy nations will try to force a shift to cleaner energy sources by manipulating relative prices — that is, by taxing carbon and subsidizing alternatives like wind, solar, biofuels, etc. At a point in the not-distant future, there will be large-scale substitution to the alternatives in these rich countries. The effect of this will be to ease demand for extractive energy sources, dramatically bringing down the price of coal and oil on the world market, making them that much more attractive to developing economies, who will then burn them in the least clean way. In effect, the rich world will be subsidizing dirty energy for the poor world. This is, I think, quite generous of us, but it’s not clear to me the result will be any net decrease in carbon emissions.

Because I am not naive about the probability of our arriving at a stable solution to the global collective action problem required to successfully impose a worldwide tax on carbon, when we arrive at the point where rich countries finally succeed in reducing the price of carbon for poor countries, it’s probably then a race of innovation against the true climate model. If the true model is the current consensus model, then we may simply be stuck with the (Nordhaus-calculated) $23 trillion dollar externality in 2100. Innovation certainly may fail to push the price of alternative energy to free (more or less) before we begin to take a big economic hit from warming. But if I could, I would bet my life savings against the predictions of the current consensus climate model. And I would also bet (rather more conjecturally) that energy will be basically free by 2050. Which may help explain where I am coming from.

Now, I have to say, I have no idea what Felix is talking about when he says that “carbon levels in the atmosphere are too high.” Too high for what? I am not aware of a net negative externality from current levels of carbon. But whatever. My point about technology was not just that technology will, in the medium-run, produce clean energy sources that will underprice oil and coal, but will also produce Nordhaus’ first-best “low cost backstop” — a technology like carbon sequestering trees that basically delivers the carbon level we want. I predict this will happen in the medium term, by which I guess I mean the next several decades. (Oh, to have a real prediction market!) If we do get it, it’s going to come from the kind of science and innovation that, as I said, “causes and is caused by” economic growth. So that’s what I mean when I say I think the medium-run environmental externality from growth is positive.

No Limits to Growth

Here is a thumbnail sketch of my position on the sustainability of economic growth. What do you think is wrong with it?

(a) energy is not scarce; the historically most efficient sources (oil, coal, etc.) are;

(b) a well-functioning price system will shift energy consumption to (cleaner) alternative energy sources as prices for historical extracted sources of energy rise;

(c) the initial high price of alternative energy will temporarily slow growth, but competition and technological progress will eventually push prices below the historical trend and even asymptotically approach zero, increasing average rates of growth;

(d) environmental quality is a global public good, but;

(e) this is most likely to be secured as a consequence of growth — as a consequence of the technological innovation that both creates and is created by growth — together with the rising scarcity and prices of the most environmentally degrading energy sources.

So,

(f) there are no meaningful limits to growth from either the scarcity of energy, or from negative environmental externalities from economic production, since in the medium run, those externalities are positive.

"If the World Cooperates…" Jeffrey Sachs' Esoteric Doctrine of Impending Doom

If we continue on our current course – leaving fate to the markets, and leaving governments to compete with each other over scarce oil and food – global growth will slow under the pressures of resource constraints. But if the world cooperates on the research, development, demonstration, and diffusion of resource-saving technologies and renewable energy sources, we will be able to continue to achieve rapid economic progress. [emphasis added]

A good place to start would be the climate-change negotiations, now underway. The rich world should commit to financing a massive program of technology development – renewable energy, fuel-efficient cars, and green buildings – and to a program of technology transfer to developing countries.

Almost every Sachs book and op-ed contains something like this, which seems to me to amount to little more than hopeful exhortation. The cynical view is that Sachs is involved mostly in signaling. It’s worked well for him so far. But I think he really cares. So a somewhat less cynical view is that Sachs is a grim pessimist who sees catastrophic market failure everywhere and sees immensely improbable global collective action as the only possible solution. Because he is always so incredibly vague about the institutional mechanisms that would be needed to solve the assurance problems necessary to get this kind of enormous cooperative effort off the ground, we ought to infer that Sachs doesn’t know what those mechanisms are, and so he probably suspects that global cooperation at the necessary scale is impossible. That is Sachs’ esoteric doctrine: We are probably doomed. But Sachs, strangely for an economist, also believes strongly in the power of propaganda, especially the power of elevating rhetoric from high-status figures, to transform social norms. It’s a longshot that Bono and Angelina can really bring about a fundamental transformation of public sentiment in a way that makes the global coordination problem tractable, but since it’s the only hope we’ve got, exhortation must continue.

If Sachs straightforwardly said what he really thinks, people would panic, which would be bad. So he really is doing us all a favor.

Equivalent In Your Dreams

I understand the theoretical argument for the equivalence of cap and trade and the carbon tax in conditions of full information and perfect compliance, but I think it’s sort of crazy to think they’re equivalent in any meaningful empirical way. Tyler Cowen helpfully explains why.

Meanwhile, Reason Foundation economist Shikha Dalmia has a good op-ed in the NY Post that I think more or less correctly captures the fiscal politics of the proposed cap-and-trade bill.

My policy preferences in this area are (1) Wait until we have much better estimates of the externalities of carbon use, which requires better climates models that do not rely on rapidly empirically crumbling assumptions about ocean warming and water vapor. Which is to say, do nothing, for now. (2) Straightforward carbon tax with offsetting reductions in other taxes. (3) Cap and trade plus tax cuts.

I understand the appeal of trying to gin up a market in carbon permits by politically inventing scarcity, but I think it’s sort of insane to think that route isn’t a lot more prone to system-gaming, rent-seeking, and non-compliance from the start compared to a carbon tax. Which is not to say that a carbon tax wouldn’t be gamed and lobbied, too. It would be, just not so badly. We already know how to collect taxes, more or less. Cap and trade, on the other hand, basically requires creating an entire new set of institutions, on dubious scientific grounds, in a context of insufficient information about their optimal design. Which doesn’t seem promising. The real-world political economics of it seems to me less like implementing an excise tax and more like the process of creating a stock exchange in a developing country.

Framing the World Away

Joe Brewer of The Rockridge Institute (aka, the George Lakoff Center for a More Scientific Leftwing Propaganda) discusses the “cognitive dimension of climate policy” in “How Conservatives Have Duped Us in the Global Warming Fight.” As far as I can tell, this duping consists entirely of basic social-scientific literacy. Here’s Brewer’s expose of the enemy frame:

Idea No. 1: Protecting the environment harms the economy

This idea has been promulgated for decades by conservative think tanks like Cato Institute, Heritage Foundation, Competitive Enterprise Institute and others. It is based on the foundational claims that (1) the environment and the economy are fundamentally different things, and (2) they compete with one another in a zero-sum manner — meaning that a gain for one amounts to an equivalent loss for the other. This idea takes many forms. Here are a few that we hear all the time:

  • Environmental action will cost us jobs.
  • American companies will be burdened by additional costs.
  • Addressing global warming will put our economy at a competitive disadvantage versus the rest of the world.
  • Renewable energy must compete with traditional energy sources, like coal and oil, before it can be implemented.

This is just weird. What does (1) even mean? Does he really think anyone thinks that? And (2) is a bald-faced misrepresentation. The general market environmentalist view is that there is something like an environmental Kuznets curve (or set of curves for different pollutants and environmental goods), according to which environmental quality degrades in early stages of economic development, and then improves at later stages.

How about those bullet points? Here’s what a bona fide Cato-style market environmentalist thinks:

  • Environmental action may or may not cost jobs, depending on the action. When Chad Pegracke enlists volunteers to clean up local rivers, that’s both effective environmental action, and it doesn’t cost jobs.
  • Most environmental regulations do burden companies with additional costs. How is this wrong? Does Brewer think regulatory compliance is free? If he thinks the cost is worth it for all of us in the end, that doesn’t mean there wasn’t a cost bone disproportionately by the company and its shareholders.
  • Imposing heavy restrictions on carbon emissions will put firms using America-based production at a competitive disadvantage relative to those using foreign-based production unless we can ensure general compliance with global restrictions. And we probably cannot. China and India (not to mention all of Africa) are on the left side of the Kuznet Curve, and they are not going to kneecap themselves for the rest of us. How is this incorrect?
  • Renewable energy must be as efficient as traditional energy sources, or else using them will be more expensive, and using the more expensive alternatives leaves us with less to spend on other things. I suppose the very idea of a budget is rightwing agitprop?

Here’s Brewer’s attempt at reframing:

Idea No. 2: A healthy economy depends upon a healthy environment

The well-being of our communities (isn’t that what we mean by a healthy economy?) is intimately bound to the preservation of life-giving qualities from nature. In other words, a thriving economy depends upon protection of the environment. Separation of environment from economy is fictitious, an artifact of a flawed way of thinking.

This begs the question, “what is wealth, and where does it come from?” A progressive response might be that wealth is the well-being of individuals, society, and the earth. Wealth is more than simply material wealth. It comes in many forms — having good relationships with friends and family, maintaining physical health, and yes, living in a community where clean skies, thriving forests, and healthy streams are preserved. Clean air, drinkable water, and fertile soils are inherently valuable because our well-being depends on them — independent of markets. A consequence of this meaning is that resource preservation is wealth creation. The logic works like this:

  • Wealth is anything that increases well-being.
  • Clean air increases well-being, so it is a form of wealth.
  • Dirtying the air reduces well-being, so it is a loss of wealth.
  • Keeping the air clean is preserving wealth.

This is not an equally valid prism through which to see the issue. This is just an insistence that words come to mean what one wishes them to mean. But suppose we accept the redefinition of “wealth” as “anything that increases well-being.” It then follows that clean air is wealth only insofar as it increases well-being. If there is in fact a tradeoff in certain places between higher incomes and cleaner air, and there is, and higher incomes do more to increase well-being than cleaner air at certain stages of development, and they do, then cleaner air decreases well-being relative to the relevant alternative. And so cleaner air can be a form of poverty. QED.

The whole thing turns on denying the possibility of tradeoffs, which is just stupid. You can’t just insist that people spend more money on what you want them to spend more money on and then say that it didn’t cost them anything because it made them wealthier by your very special personal definition of wealth. Well, you can say it. And you may even manage to persuade some people. But it makes you look either foolish or dishonest to people who know better.

I’m all for availing ourselves of any useful indicator of well-being. But this can’t be merely stipulative. You need to show that something contributes to health, happiness, longevity, creativity, the realization of basic human capacities, etc. The story these indicators taken together tells us is that the greatest increases in human well-being have been a consequence of rapid economic growth, traditionally construed. This has taken a certain toll on the environment, but that hasn’t left us worse off has it? Indeed, the opposite is true. So Brewer has it backwards.

The evidence — the whole set of well-being indicators, and not just the income numbers — says that growth-based environmental changes have been associated with an increase in well-being. Historically, pollution has been side-effect of wealth, as Brewer construes wealth. Now, it is completely misleading to attempt to try to brand carbon as a pollutant, as Brewer seems to wish to do. But even so, the places that emit the largest amounts of carbon per capita are precisely the places where people tend to do best on pretty much every well-being indicator imaginable, and this relationship seems to be largely casual, and not incidental. So pretty much all the relevant evidence points to the conclusion that cutting carbon emissions in the absence of equally efficient sources of energy will reduce well-being. It will impoverish us. This is not a right-wing framing conspiracy. It’s called a considered judgment based on empirical evidence. Try it!

Now, I’m quite open to the idea that carbon taxes are an efficient method of getting folks to internalize the costs of the negative external effects of their activities. But Brewer clearly thinks that if the debate proceeds in economically-literate terms, he will not get the policies he wants.

More Fun with Collective Action

Here’s a question and answer from AskPhilosophers that bears on the question of individual moral obligation in matters where only coordinated collective action can make any meaningful difference.

If I don’t fly from London to my sister’s wedding in New Zealand she will be upset, I will cause her pain and so that’s morally bad.If I do fly to my sister’s wedding in New Zealand I will put about four tonnes of carbon dioxide into the atmosphere, which will contribute to climate change, which, according to the World Health Organisation, already causes about 150,000 deaths every year. Clearly that’s also morally bad.Which is the morally correct thing to do?

December 4, 2007

Response from Thomas Pogge on December 7, 2007

In dilemmas of this kind, always start by thinking about whether they are really inescapable. One escape in this case it to speak with your sister. If she likes New Zealand, she is unlikely to be indifferent to the environmental degradation that is already so much in evidence elsewhere. Plus you can offer to donate the flight cost to a good cause of her choice, in honor of her wedding. In any case, it is much easier for her to understand and accept the decision if she was herself involved in making it or at least in thinking it through.

BTW, I checked your numbers because 4 tonnes seemed like a lot. But you are basically right. A Boeing 747-8 takes a bit over 200 tonnes of fuel (over half its take-off weight), roughly 137 gallons of fuel per passenger. Each gallon produces 20 lbs of carbon dioxide. So that’s about 1.3 tonnes per person. But then one tank does not get you there, plus you’ll have to fly back as well. So 4 tonnes is a very good estimate. Way too much, indeed.

Well, I sure wouldn’t have given Thomas Pogge’s answer, which I think is really quite silly. Even granting what I’d guess are the underlying extreme AGW assumptions, surely the correct answer is this:

Your choice is very unlikely to determine whether or not a airplane leaves London for New Zealand. So, chances are extremely high that the same amount of carbon will be emitted whether or not you choose to go. Staying or going will make no difference at all to the condition of the atmosphere. But even if your choice quite improbably keeps that plane in the hangar, the effect of that flight is infinitesimally small in the overall scheme of things. Your choice is also likely to do nothing whatsoever to improve the probability of enacting some kind of future global climate treaty or some kind of scheme for incorporating the cost of the environmental externality into the cost of plane tickets. So, if not being a horrible selfish brat of a brother matters to you at all, then you should go. In fact, you sound suspiciously like a shit trying to find a bogus, holier-than-thou excuse to wriggle out of ponying up for a flight to your sister’s wedding. If you’re broke or cheap you’ve got to tell her the truth about why you won’t go. You are emphatically not allowed to hide behind Al Gore.

Thomas Pogge is an eminent moral and political philosopher, and not a complete idiot, so what’s going on here?

The Moral Calculus of Climate Change

The RealClimate guys report on a conference on the ethics of climate change. Here’s their summary of Henry Shue’s presentation:

Henry Shue, a Oxford philosopher well known for his work on such issues as the moral implications of torture and pre-emptive war, made the argument that the moral implications of not dealing with climate change should be thought of not only in terms of harm, but in terms of potential harm. Unfortunately for those of us that would like to keep burning fossil fuels at our current rate, Shue argues that uncertainty — the possibility that harm caused to future generations from anthropogenic climate change will be relatively small — does not get us out of our moral obligation to change our behavior. That is, one need only recognize that business as usual will increase the risk of significant harm – a point that almost nobody debates – for it to be clear that business as usual may be unethical.

Maybe this isn’t what Shue actually said, and surely he said rather more, but I find this pretty uncompelling as stated.

First, the idea of obligations to distantly future generations strikes me as incoherent. These are people that do not actually exist, and the people who do eventually exist is a function of what we do and don’t do now, which is surely a serious complication. Even if we can imagine determinate future persons to whom we might have duties, it remains that we stand outside the Humean circumstances of justice with them, and so don’t in fact have duties with respect to them. I can make sense of an “intergenerational chain” conception of obligations to future generations: I have obligations to my children and grandchildren; my children and grandchildren have obligations to their children and grandchildren; etc. I think this can get us a few general principles, like “leave enough and as good for the kids,” but it’s unclear how this can undergird any kind of significant sacrifice for indeterminate far-distant beneficiaries.

Second, even if we can find some ground for obligations to far-future generations, we’d need to be established that “business as usual” will in fact be a net harm to future generations. Suppose a small reduction in future warming requires a small reduction in economic growth every year from now to then. The longer the time frame, the greater the harm to future generations from reduced growth rates. At some point, the loss in standard of living will completely swamp the gains from reduced warming. And, of course, the longer the time frame for significant warming, the less likely it will be that dislocations from warming will be serious. Gradual changes in patterns of capital investment, migration, etc. will move many people out of harm’s way, and perhaps move many other into areas that will benefit from warming. And, of course, the more rapid the rate of economic growth, the more likely it is that effective technologies that will retard warming, or mitigate its effects, will come on the scene. The allegedly obligatory deviation from “business as usual” may be in the direction of doing more to accelerate economic growth. It is by no means obvious that this isn’t the best course. 

Looking at the RealClimate summaries, it seems to me that there is a bit of a bias toward emphasizing the potential harms of warming while de-emphasizing — or even arguing down — anything that might prevent or mitigate those harms. RealClimate’s Steig and Schmidt write:

one of the commentators at the conference made the argument that it was an open question whether we had any moral obligation towards future generations for our impact on the climate, since that impact could in principle be averted (for example through carbon dioxide removal via ocean iron fertilization). This is equivalent to saying that we will not have to address the issue of climate change if we address it, an argument that has no bearing whatsoever on whether we have a moral obligation. We were a bit surprised to hear it from a philosopher since it is a tautology (usually anathema to philosophers).

Sounds like the unnamed philosopher may have been saying something close to part of what I was saying above, and it doesn’t sound like a tautology to me. It sounds to me like he was saying that if we’re thinking about the probability of harm, then we also have to take into account the probability of the emergence of technologies that would prevent that harm because, otherwise, you can’t calculate the total probability of harm. Why try to avoid the obvious force of that point? Steig and Schmidt’s reply amounts to this, as far as I can tell: If the emergence of this technology is motivated by the recognition of a moral obligation to address the issue, then it weirdly self-defeating to argue that people therefore don’t have a moral obligation to address the issue. Sure, but I truly doubt that was the argument. It is confused to talk about whether “we” do or don’t address warming. Not everyone invents or even funds new technologies. If someone or other does this in the future, whatever their motivation, and that makes the problem go away, then the problem will have gone away. If the probability of this is high enough, and we know it, then the rest of us non-inventing, non-invention-financing folk, are obviously off the hook right now. Now, I don’t know the probabilities of any of these things. And neither does Steig and Schmidt or Henry Shue.