Why Conservatives Are Going to Win on Global Warming
Almost a year ago to the day, National Review published what turned out to be a somewhat controversial cover story on global warming in which I argued three things: (1) anthropogenic global warming (AGW) is real, (2) current projections of its expected impact are wildly uncertain, but are not sufficient to justify the costs of an aggressive emissions reduction program, and (3) conservatives have an unseen political opportunity to win on the issue by pointing this out.
A year ago, many conservatives feared, and many liberals hoped, that this was simply a way-station to a me-too conservative emissions reduction program that accepted the premise of the need for massive government intervention, and did a little tinkering around the edges. But the recent (temporary) defeat of the Lieberman-Warner cap-and-trade proposal showed the success of exactly this strategy. The reason for this is simple: we have the facts on our side. The economic problems with L-W are not fixable with clever drafting. Given current projections, the costs of restricting emissions just can’t be justified based on the benefits that it is projected to provide.
As far as I can see, proponents of emissions reductions will respond with four arguments: (1) inflate the analyzed costs of global warming by claiming the science actually now says things will be even worse than we previously thought, (2) inflate the analyzed costs of global warming by embedding indefensible discount rate assumptions in the black box of econometric calculations used by economists to conduct the cost-benefit analysis, (3) deflate the analyzed costs of emissions mitigation by claiming a free lunch – that there is a cost-free or low-cost way to radically reduce emissions, and/or (4) turn this into a moral crusade asserting that we have a moral duty to the poor of the world because of our past sins of emission. I have laid out responses to each of these objections: 1, 2, 3 and 4. When considered carefully, emissions mitigation proponents have no persuasive arguments.
Where does the debate go from here in practical political terms? It’s going to take a long time to win, and there will be setbacks along the way. A betting man would have to say that Democrats will likely have larger majorities in both houses of Congress, and hold the presidency, in 2009. While a competent Republican presidential campaign on this issue could make cap-and-trade radioactive for years, McCain obviously seems to want to capitulate on the issue. So, it is a good bet that another, maybe more stringent, version of emissions reduction legislation will be introduced and debated in the next 2 – 4 years. It is very possible that conservatives could mobilize sufficient opposition, even in the minority, to prevent its passage, but there is a real possibility that there will be a cap-and-trade law. Even in this scenario, it will fail in practice, either because (as in Europe to date) it becomes a pointless boondoggle, or because it starts to actually restrict energy use, and therefore becomes a visible drag on the economy. One way or the other, it would just create an issue for conservatives to campaign on, win and roll-back.
How do we keep pushing this to the most positive possible outcome, given the overall correlation of political forces? Simple, keep coming back to the same question: “What do we pay, and what do we get?”
I admire your optimism. But this is ridiculous on its face: you’re going to grant that climate change will lead to catastrophic effects, then convince the public to accept them using an economic rationale? Good luck getting your guy to shout “DISCOUNT RATE” from the podium to the cheering throngs.
Besides which, your linked response to the justice argument (4) seems pretty weak to me. The costs incurred from a slowing of global economic growth would be far less regressive than the costs of AGW. And your framing of the former as a wealth transfer is deeply disingenuous. We are not owed future growth — if we were, presumably I’d have some sort of moral claim whenever my investments underperform expectations.
Besides which, the American public are smart, and pretty freewheeling with money they expect to get in the future but don’t have today (just ask the Chinese). Explaining that we can’t sacrifice even a little bit of our future additional wealth in order to save the lives and livelihoods of the world’s poor is a fundamentally selfish case to make, and people will see that. You’ve got a very tough road ahead, I think.
— Tom · Jun 18, 02:52 PM · #
On your discussion of what “emissions reductions advocates” are claiming:
1. You seem to be avoiding the implications of what Weitzman calls thick-tail uncertainty: the extreme events that, despite lying outside the scope of many thin-tail expected utility estimates, nevertheless should dominate our estimates of possible losses from global warming. Your main response to this in the past has been to advocate the development of relatively cheap mitigation strategies that may be deployed in case climate change in worse than expected — but what if such responses come too late, or can’t be developed at all? This is heavily in the realm of subjective probability, but I think that there is a sizable chance that we won’t be able to put any such extreme mitigation strategies into place, which would be devastating for your analysis. Thick-tail disaster scenarios may raise the expected costs of global warming by multiple orders of magnitude, and they can’t be brushed off by promising the development of perfect mitigation techniques (which I don’t think you can argue are so probable that they’ll lower expected damages by one or two orders of magnitude).
2. The “aggregate GDP” approach is an immense simplification, waving off the facts that (1) it is probably better to model some of the damages from climate change as directly entering the utility function, not affecting it through consumption alone, and (2) severe heterogeneity in the wealth of the countries damaged, which I suspect will still exist in 50 or even 100 years, almost inevitably will raise utility costs relative to an “aggregate consumption” model.
3. Although I agree that the extremely low discount rates embedded in the Stern Review are probably indefensible, the existence of climate change damages that affect utility through a mechanism outside reduced consumption indicates that we should not blindly be using market returns to define our discount rates either. Further, if it’s unclear exactly what discount rates we should be using, it may be reasonable to craft some kind of subjective probability distribution over various discount rates. As long as there is a nontrivial estimated probability that, for whatever reason (low market returns, low pure time preference, climate change affecting utility outside consumption), we should be using a low discount rate, some of the high order-of-magnitude present value damages in analyses like Stern’s will still be with us. (And for the reasons I’ve mentioned above, Stern’s damage calculation, although forced upward by the low discount rate, is actually biased downward by several other important considerations…)
— Matt Rognlie · Jun 18, 03:01 PM · #
I didn’t notice when I posted the above comment that this was actually your third global warming post of the day, and the last technical one at that. (Making it the least appropriate venue for my comment.) Apologies, although I think that all the points still stand, and I’ll try to respond in the places where you touched upon them in your previous posts.
— Matt Rognlie · Jun 18, 03:46 PM · #
Tom:
I admire your optimism. But this is ridiculous on its face: you’re going to grant that climate change will lead to catastrophic effects, then convince the public to accept them using an economic rationale? Good luck getting your guy to shout “DISCOUNT RATE” from the podium to the cheering throngs.
You really ought to read what I’ve said before commenting on it.
As I’ve said in many of the posts linked to from this one, the UN IPCC estimate for total global losses from unconstrained global warming are estimated to be 1% – 5% of global economic output sometime in the 22nd century. That is in a world that is projected to have average annual per capita consumption of about $40K per year vs. our current $6.6K per year. So, according to the IPCC (not me), the expected effect is that people more than 100 years form now will only get to be 5 and half times as rich as we are, instead of 6 times as rich.
Matt:
Thanks for finding the other AGW posts from yesterday.
I wrote a very long article (posted on this site) about Weitzman’s very clever argument.
— Jim Manzi · Jun 18, 04:02 PM · #
Jim, as always, superb job. And thanks for recalling your Weitzman article: it’s a beautifully accessible gem of explanatory writing.
I really don’t have anything to add, but I’d like to amplify the following:
In your Weitzman article, you write:
At a qualitative level, this is not a crazy idea. It is not ridiculous to assert that even if we could measure the climate sensitivity with all associated feedbacks today, it may happen that the nature of these feedbacks could change in some future climate state in a manner that no amount of analysis can anticipate. […]
The whole point of a GCM is to model feedbacks, that is, to be a sufficiently accurate representation of the planet to allow us to apply known physical laws to predict future climate development form first principles. So, unless he is implicitly rejecting the capacity of GCMs to make useful predictions, the idea of S2 requires us to believe that GCMs are useful for some temperature range, but then become useless beyond some other temperature range. This is not a crazy idea either, but it means that we can’t use the GCMs that are the primary basis for temperature impact predictions in order to quantify this idea of S2.
Other than the fundamental problem you mention, Weitzman’s narrowly cavalier use of the concept of nested feedback loops bothered me most about his paper. Sure, it’s not analytically ridiculous. Should AGW push temperatures beyond a certain threshold, it’s not unreasonable to anticipate the subsequent activation of heretofore-dormant climate feedbacks, positive and/or negative — a “happening” that would render our CGMs obsolete.
But as you mention, this is a prescriptively-neutral observation. In a way, it’s a precautionary principle for CGMs in general, asking whether it’s wise to take any action relying on climate modeling when it’s plausible that the models are all predictively inadequate past a critical threshold of temperature. But more than anything (as you say) Weitzman’s S2 argument is a statement of uncertainty, or, more accurately, an acknowledgment, a respectful nod-in-the-direction-of, the unbelievable complexity of our planet.
To jump from this (immanently defensible) assertion to a hypothetical example of how this predictive inadequacy might play out vis-a-vis a particular future scenario, one where the nested feedbacks, which activate past a threshold of temperature and amplify rather than dampen those temperature deviations, is also defensible, but only as arguendo support for the original point that we face inescapable uncertainty when we model the climate.
What it cannot be, what it cannot do, is precisely where Weitzman takes it.
— JA · Jun 18, 06:22 PM · #
CGM = GCM, natch.
— JA · Jun 18, 06:24 PM · #
I’m not terribly satisfied that I was clear, so here’s a second stab at it, using Weitzman’s own language:
Weitzman writes, “These fattened tails can have very strong implications for situations (like climate change) where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages.”
This sentence should have the exact same force on the AGW political debate as the following:
“These thin tails can have very strong implications for situations (like climate change) where no damage at all is theoretically possible because prior knowledge cannot place sufficiently broad bounds on overall damages.”
In other words, somebody could write a mirror-image paper showing how GCMs fail to predict the regulative impact of nested climate feedbacks by constructing an S2 that includes — not the “heat-induced GHG-release feedbacks on the forcing from…weakening of carbon sinks, increased respiration of soil microbes, climate-stressed forests, and so forth”, i.e., natural activities which tend to amplify positive temperature deviations — but an equally-plausible and equally-supported scaling parameter that models a strict schedule of nested negatives and thus creates an infinitesimal likelihood that relevant climate change will even take place.
As you can imagine, the influence on cost-benefit analysis would be immense.
— JA · Jun 18, 06:59 PM · #
JA:
Thanks very much for your compliments.
I agree with your point. Here’s how I tried to put it in that post:
— Jim Manzi · Jun 18, 07:04 PM · #
Jim,
Heh. No wonder I thought Weitzman’s S2 argument sounded like a restatement of the precautionary principle; I read it in your essay (the thought must have become unmoored in my brain, only to reappear as…insight! — hate it when that happens).
— JA · Jun 18, 07:22 PM · #
I’m a lawyer, not an economist. But in California alone, mitigating what appears to be the likely impacts of climate change will cost billions in the very near future. The state is getting less total precipitation and more of it is coming as water rather than snow. As a result, the state needs more dams and more off-stream storage. It also needs to change its water management system to put more cold water in rivers to keep the fisheries from crashing.
Las Vegas is out of water. It is scrambling to develop new supplies because it sees that its Colorado River rights are already insufficient. The only way it’s going to get a lot of new water is to build a desal plant somewhere in Southern California and get the Metropolitan Water District (the water wholesaler for Southern California) to take that water instead of its Colo. River water. (That shouldn’t take more than 20 years or so.) Arizona is close to being as badly off and lacks the revenue stream that Las Vegas has to build multi-million dollar desal plants in Southern California.
In short, I think that the IPCC’s estimation of the cost of responding to global climate change was grossly optimistic, and the next version will have some compelling case studies and real data to support it.
— Francis · Jun 18, 08:38 PM · #
Jim,
“…the UN IPCC estimate for total global losses from unconstrained global warming are estimated to be 1% – 5% of global economic output sometime in the 22nd century…So, according to the IPCC (not me)”
Thanks for the link yesterday (in part IV) to the original source of this. Reading you argument, I assumed you meant (i) The IPCC conducted an estimate (ii) in 2007 (iii) establishing a confidence boundary of 1-5% and (iv) this was the focus of a fair amount of work on their part. That citation*(p. 17) cites Figure 20.3** (page 822, Figure A) – which doesn’t meet any of that.
The IPCC, in 2001, surveyed the literature current then – so published in 1998-2000, so researched before then. The boundaries the IPCC use appear to be the mean of the studies of Mendelsohn and Nordhaus, so the 1-5% isn’t actually a confidence interval from a single model but the range of means under consideration. More importantly, the numbers appear to be an afterthought of the panel, ‘outsourced’ to then current research – the 2007 Panel, updates it just by throwing in a graph from the Stern Review alongside the same chart from 2001. The chapter itself is mostly about ecology – and the review part itself (20.6) is mostly concerned with discount rates (can’t get away from em, evidently) for those models it cites and the evolution of said models.
I understand the IPCC itself is misleading in it’s summary document, especially in terms of how it should have clarified its decade old 1-5% boundaries as actually being a mean-range of Mendelsohn/Nordhaus or Sterns or a literature review more generally. I don’t want to be a nitpicky nerd on this (I can’t help it, sorry) – I just wanted to point this out since so much of the argument is predicated on this.
Of course your broader point that most estimates are within a do-nothing cost-benefit analysis of GDP stands. Like Francis, I’m curious as to what current events start to say about future ones, especially on the water-supply end.
* – http://www.ipcc.ch/pdf/assessment-report/ar4/wg2/ar4-wg2-spm.pdf
** – http://www.ipcc.ch/pdf/assessment-report/ar4/wg2/ar4-wg2-chapter20.pdf
— Mike · Jun 18, 11:58 PM · #
The Politicians treat voters like children on this issue offering two options: Cap and Trade or Carbon Tax. What about the third way – listen to the science? It is the sun. There is no experimental evidence to support CO2 and AGW, or we would have seen it. This house of cards was built decades ago and all the derivative ‘research’ since then has no scientific foundation.
Moreover, we have no practical alternative to hydrocarbons and we must leave the carbon economy in place. The problem however, is the leftie political/intellectual construct of “BIG OIL”. The state of affairs, actually is that “REALLY BIG OIL”, the national oil companies like Russia and Venezuela and all the rest of the inefficient and uncompetitive national oil companies (e.g., PEMEX) have driven prices through the roof by incompetence. It is fair to call these super giants “REALLY BIG OIL”. They sit on 93% of the resources and reserves. The US is suffering from NIMBY for certain, but gas in Europe is about $9.00 – $11.00 a gallon equivalent and rising for similar NIMBY reasons; unable to build refineries.
We are in for a fight. Most politicians know the truth about CO2 and are aware of the petition of 31,000 scientists who agree that CO2 is beneficial to life on the planet (Oregon Institute of Science and Medicine; released at the Washington Press Club), and that Kyoto would severely affect prosperity for the poor and those on fixed incomes. However, ‘real scientists’ is not a constituency and this is an election year. Pols now cater to an humanist educated mass of humanity who are lured by demagogues and driven by fear or worst case fictional scenarios. Interestingly enough, politicians use politically correct subjects to coerce politically correct voters.
— Francis T. Manns · Jun 19, 02:42 AM · #
Francis:
There are many drivers of climate change at all times, and the system is (to say the least) incompletely understood.
Do you dispute that CO2 absorbs and redirects IR radiation, but not SW radiation?
If so, do you dispute that all else equal if I put more CO2 molecules in the atmosphere that global surface temperatures will rise?
— Jim Manzi · Jun 19, 02:50 PM · #
I take my science on global climate change from realclimate. I get my science on the impact of climate change on California from the Department of Water Resources and personal communications with water engineers. The climate in California appears to be changing noticeably, and the changes are consistent with current global climate models.
My point is that, while my understanding of the IPCC modeling of economic costs of climate change is limited, my personal experience suggests that the costs were very conservative. Our society, including our industrial-scale agriculture, is very finely tuned to a very narrow climate band and adjusting to changes in that climate appears likely to be extremely expensive.
(on preview, I see you’re addressing the other Francis.)
— Francis · Jun 19, 03:36 PM · #
Francis:
You are correct. My comments hsould have correctly identified “Francis T. Mann”. Apologies for that.
One simple numberical observation about your (actually your’s, not the “other” Francis’s) comment, however, is that you predict that:
But in California alone, mitigating what appears to be the likely impacts of climate change will cost billions in the very near future.
As you know, California has a huge economy. It’s output in 2006 was about $1.7 trillion. 5% of $1.7 trillion is $85 billion, so you could spend many billions of dollars per year, and still be consistent with the 1 – 5% of GDP estimate. Of course, if the IPCC is right, it will keep getting hotter and more expensive for the next century. If you assume that CA’s economy will grow at a 2% real rate for the next 100 years, it will have total output per year of about $12 trillion a century from now, 5% of which is about $600 billion (on the order of the size of the current US defense budget). So you could spend a lot of money on remediation and still be within the IPCC’s estimates.
Best,
Jim
— Jim Manzi · Jun 19, 03:54 PM · #
Dear Jim,
I agree with you in general that current emissions trading ideas don’t really hold water economically (as others have said, just look how Kyoto is working out) but I have to disagree with you on your conclusion regarding the political future of emissions mitigation.
I think that more and more people (correctly or not) will come to see natural disasters as caused by climate change and will demand action. The government, no matter which party, will come under a great deal of pressure to do something preventative and they will realize that being blamed for the weather is not a good long term strategy.
Unfortunately I do think it’s likely that we’ll see some sort of toothless emissions program passed in the next couple of years. Hopefully that will be followed by better programs. What do I mean by that? I think on of the basic disadvantages of emissions trading is that it discourages growth (argue all you want that it will make corps develop new technologies to meet regulations).
So what is needed is some kind of economically stimulating policy that curbs emissions. A carbon tax might do it if the revenues were put right back into industry in the form of clean tech R&D, but I’m not sold on that either. Other than that I’ve heard some good ideas about creating investment programs for “green-collar” industry but that could just turn into another massively wasteful government program. We’ll see what eventually happens…..
Fionnlaech
P.S. For an interesting read on where the environmental movement is going check out http://www.thebreakthrough.org/breakthroughbook.shtml
— Fionnlaech · Jun 19, 09:10 PM · #
Jim,
I’d be interested in your take on a plan like Cap & Dividend that has been gaining converts/attention recently— Reich wrote a WSJ OpEd on it a couple of weeks ago.
Essentially: Cap (Supply-side), Auction 100%, return all auction revenue to the public in the form of equal “dividend” checks.
It’s the best plan I’ve heard yet for protecting incomes.
— Sam · Jun 19, 09:32 PM · #
“because they SAY they are. and that’s all the proof they need.”
— hapa · Jun 20, 12:45 AM · #
Fionnlaech:
Thanks for the comments and questions.
So what is needed is some kind of economically stimulating policy that curbs emissions.
That would be the trick. About the only way this could happen would be to invent new technology. This is the S&N idea (as per your lnk). While I think it’s a bad idea to invest a lot of money in a new technological area, just because you want a specific outcome, their ideas make a lot more sense than pushing up the price of energy through rationing (cap-and-trade) or taxing it.
Sam:
I’d be interested in your take on a plan like Cap & Dividend
This is essentially (as I understand it) a version of the revenue-neutral carbon tax, with a very, very heavy element of income redistribution. I’ve done a long post here at TAS called Coase Club about why I don’t think this will work in practice.
hapa:
Reading is fundamental.
— Jim Manzi · Jun 20, 02:00 AM · #
something — potentially mass extinction — so weird and large comes along that its costs can’t be figured and you’ve got it licked rhetorically and you call the experience of witnessing your self-indulgence “reading”? pay me next time. i’ll call it anything you want.
— hapa · Jun 20, 03:00 AM · #
hapa:
Here are some not-crazy potential drivers of mass extinction:
Asteroid strike
Global pandemic caused by modified avian flu / HIV virus
Thermonuclear war
Weaponized genetic engineering technology used to develop strain of wheat with no nutritional content that can displace existing wheat crop
Do you suggest that since each of these has “costs that can’t be figured” that we should spend up to 100% of world economic output to prevent or ameliorate them?
— Jim Manzi · Jun 20, 05:06 AM · #
Jim —
You’ve got your head on your shoulders on this one. But I’d like to see more from you on energy recycling, which is a logical next step in your coverage of this issue since it slashes power costs and greenhouse emissions at the same time. Basic premise, in case you’re unfamiliar: our energy system wastes a LOT of heat. Just vents it out the window — hence all the smokestacks at manufacturing facilities and power plants. Energy recycling turns that heat into power and steam, thereby vastly improving efficiency.
And this isn’t a nibble-around-the-edges proposition; this is the nub of the problem. Over two-thirds of U.S. greenhouse emissions come from the production of electricity and heat. You’d never know it from the media and elite obsession with gas mileage standards. But that’s the heart of our greenhouse problem. Thus, improving efficiency in our energy system — which is utterly doable through energy recycling — is essential to slashing both costs and pollution. The only reason more isn’t being done is that utilities get monopoly protection, and more efficient options have a hard time emerging. So government regulations have been HURTING, not helping, on the environmental front, at least in this regard. Easing these regulations — or, perhaps, establishing a truly market-based cap-and-trade system, unlike the cap-and-spend Lieberman-Warner — should be the conservative answer on climate change.
— miggs · Jun 20, 11:41 PM · #
Miggs:
Fascinating.
only reason more isn’t being done is that utilities get monopoly protection, and more efficient options have a hard time emerging.
Can you point me to a reference on this assertion?
BTW, the most promising geo-engineering technology is not shooting streams of particles into the atmosphere or whatever, but much more simply, just recycling CO2 in the atmosphere.
— Jim Manzi · Jun 21, 01:47 AM · #
And as I’ve said before – and you’ve admitted before – economic estimates built on top of (what you believe to be) already shaky environmental models are rather profoundly questionable.
That said, ok, let’s look at the argument that the imposition of a huge carbon tax, right now, with no ramp-up, would cost hundreds of billions of dollars now, money that would be better used to grow the economy and develop better mitigation strategies in the future.
You’re sitting on top of a huge pile of assumptions here, ones that your linked articles don’t definitively prove the way you imply. The Coase Theorem tells us transaction costs will be high in any such mechanism? Well then, no carbon tax should be instituted, because it’ll be messy… but hey, don’t worry, with all the great wealth-building we’ll be doing over the coming decades, it’ll be trivial to solve the problems of those hit hardest by global warming! Because history and politics show us that rich people always want to help out poor people, and that the process is completely efficient and problem-free!
And it certainly won’t be the case that changing resource availability will trigger social unrest, sudden political changes, and wars that will blow any and all economic assumptions about future global GDP to hell, right?
And we can skip this whole messy carbon tax thing by just directly funding cleaner technology to the tune of billions a year, something conservatives have just been clamoring to do for years now, right? And don’t worry that any such clean technology would have difficulty supplanting the existing, carbon-heavy infrastructure in the absence of any scheme penalizing the use of carbon, it’ll just happen magically!
Jim, the bottom line is that even you admit a carbon tax scheme will work – it’ll just cost a lot, and it’s better for our richer decendents to handle the problem. But political difficulties are a constant. However problematic it is for us to try and fix global warming now, it’ll likely be at least as difficult for people in the future to deal with, even if – under the best of your unproven economic assumptions – they have tons more money to do it. Let’s just get this sumabitch out of the way now and let our grandkids deal with whatever fascinating new problems they manage to inflict on themselves.
— Chris · Jun 21, 05:24 PM · #
Chris:
I don’t think it’s exactly accurate to say that I’ve admitted that it’s difficult to forecast the economy over 100 years, when I proactively asserted that in a published article.
I don’t think it takes a whole lot of assumptions to say that if person X is going to burn a barrel of oil because, net of costs, he believes that it will create utility, but the government prevents that from happening either through rationing (cap-and-trade) or taxation that economic consumption just declined.
I don’t think you can get around the probelm of trying to handicap odds and severity of future risks in order to decide how to react to them.
— Jim Manzi · Jun 21, 06:33 PM · #
Ok, so you proactively asserted that it’s difficult to forecast the economy over 100 years. That doesn’t really undermine my argument.
Yes, consumption of crude oil now just declined, and right now, that translates directly to overall lower economic consumption. After a decade or so, with better infrastructure in place to do more with less crude, or (ultimately) to replace crude entirely, maybe not so much. And that’s the whole point – your argument isn’t about the trivial point that taxes now decrease economic consumption in the short term, your argument is about why dissuading him from burning the crude now is a bad idea in the long run. And that does rest on a ton of assumptions.
This is true. Which, as I’ve said before, suggests that we should be putting a whole lot more weight on what the much more settled – and verifiable – physical science suggests than the to far less concrete predictions of how our descendants will be physically, socially, politically, and economically affected by stuff like widespread flooding, food and water shortages, and mass migration.
In other words, use at least as much ink being skeptical about the IPCC’s economic projections as you do about their climatological projections.
— Chris · Jun 21, 07:27 PM · #
Actually, let me cut to the chase here and give a single example of why I find Jim’s “our future riches will be better able to deal with the problem than our present sacrifices” argument suspect.
Compare 1958 to 2008. Are we, as a society, richer today than we were back then? Absolutely.
Do those riches translate into being better able to handle ecological disasters, such as, for example, what might have happened in Atlanta had last winter’s drought not let up? Not necessarily – because a lot of our capital improvements have come in the form of things like consumer goods and improved information technology, all of which is of limited usefulness when it comes to making water appear in faucet taps.
In fact, the greater density and infrastructure that is, in large part, directly responsible for our greater wealth, is, if anything, more vulnerable to ecological issues than it was 50 years ago – it’d be far harder to relocate a significant chunk of Atlanta’s population today than back then, and our greater productivity is the product of a precise web of production and consumption. Take that precision away and it’s not at all clear to me how resilient the system is.
So even if our future descendants are considerably more wealthy than we are, it’s not at all clear to me that they’ll be able to deal global warming blowback in the way Jim asserts.
— Chris · Jun 21, 07:44 PM · #
Chris:
Yes, consumption of crude oil now just declined, and right now, that translates directly to overall lower economic consumption. After a decade or so, with better infrastructure in place to do more with less crude, or (ultimately) to replace crude entirely, maybe not so much. And that’s the whole point – your argument isn’t about the trivial point that taxes now decrease economic consumption in the short term, your argument is about why dissuading him from burning the crude now is a bad idea in the long run. And that does rest on a ton of assumptions.
But this is just the classic argument that you are smarter than the market – that the guy burning the oil doesn’t understand that he would be better off not doing it because of long-run effects that he doesn’t see, and that you have figured this out.
So even if our future descendants are considerably more wealthy than we are, it’s not at all clear to me that they’ll be able to deal global warming blowback in the way Jim asserts.
The average person in what is currently the developing world is expected in 100 years to have something like the average income of a person in Western Europe or the US today. You’d have to assert that today China, India, Burma, etc. are as able to repsond to physical challenges as France, Japan and Canada. I don’t think so.
— Jim Manzi · Jun 22, 06:01 AM · #
No, this is the classic argument that markets work better when they have more information, such as, for example, price signals in the form of extra fees or taxes that better reflect the true cost of a negative externality. Which is not a particularly odd or know-nothing way of looking at economics, I believe. I’m not saying that it’s trivial – or even possible – to set exactly the right extra tax for oil. But I don’t think you’ve successfully made the case that it’s better to not even try to set that price, mostly because, as you “proactively assert”, the economic forecasts you’re relying on are even less accurate than the atmospheric science you spend so much time dumping on.
Again, the whole point is that you don’t know that’ll be the case – you’re basing everything off of what the IPCC says about economics. You don’t know if that kind of economic growth is possible under changing climatological conditions because nobody has ever seen it happen.
It’s also worth pointing out that one of the key factors in disaster response – transportation technology – isn’t nearly at a 100-year disparity between say, China and the US. In fact, several recent disasters have showed, China does a reasonably good job of moving people in and out of affected areas. (The US, of course, does a vastly better job at taking care of its people after a disaster, and being able to afford emergency response, but the actual transportation infrastructure is not hugely different.) What’s more, it’s not clear that further growth in the transportation sector in China (or India, etc.) is even possible along the lines you’re thinking of, given how tight the oil market’s already gotten due to 3rd world growth.
— Chris · Jun 22, 03:50 PM · #
Just to play devil’s advocate, let’s say it was certain that, instead of a small drop, GDP would actually increase as a result of a 4 degree increase in global temperature between now and 2250 (and given which countries are going to be impacted how, that might not be unreasonable), would the conservative response to global warming (““What do we pay, and what do we get?”) encourage the production of CO2 gases in the atmosphere?
I think that point is what is freaking me out about the cost-benefit approach.
— Mike · Jun 23, 05:41 AM · #
Jim —
You asked for a reference for the assertion that utilities get monopoly protection, thus making it hard for more efficient options to emerge. I have a bunch. But first, full disclosure: I’m associated with Recycled Energy Development, a company that turns manufacturers’ waste heat into power. So I have a vested interest here. But I also have compelling info. Here are two recent articles that contains at least a little info about these pro-utility regulations:
1) NPR: recycled-energy.com/newsroom/news/npr05-22-08.html
2) Atlantic Monthly: http://recycled-energy.com/newsroom/news/atlantic5-08.html
You may also want to take a look at the pdf background doc we put together, which gives a few examples: recycled-energy.com/_documents/media-kit/backgrounder.pdf
For those who don’t want to click the links, here are two examples. First, the Clean Air Act grandfathered in old plants so they wouldn’t be subject to new rules. Enviros at the time thought these plants would eventually close. They haven’t. In fact, if they make any slight efficiency improvement, “new source review” kicks in, and they’re forced to install ALL the schnazziest new technology or they’ll have their operating permit nullified. So there they sit, utterly inefficient, throwing away two-thirds of their fuel.
Second, every state in the nation makes it a FELONY for a non-utility to run an electric wire across a public street. Independent phone companies have been doing this for year, but not indie power producers. Why does this matter? It means that energy recyclers can’t sell any excess power or heat they produce to neighboring businesses — and thus the demand for recycled energy is artificially suppressed.
Third: consider that basically all over the country, utilities have their investments guaranteed, and even worse, they are usually required to pass all operating costs onto consumers. That means utilities have every incentive to build expensive capital projects and no incentive produce power efficiently.
OK, I’m basically out of breath here. But please email me if you’d like to talk further. While liberals insist on expensive and still marginal renewables, and conservatives chafe at any mention of curbing emissions, this perfectly sensible, win-win solution gets lost in the din.
— miggs · Jun 23, 08:08 PM · #