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Category Archives: Climate change

There’s a strain of reasoning that runs something like this:

  1. A trend is occurring.  (Usually backed by data in charts)
  2. Extrapolating far forward along that trend leads to a very bad result.  (Often uncertain or vague, but definitely bad)
  3. Therefore, we must do something right now.  (Often the specific something is an action the arguer wants to take anyway)

This reasoning is applied to issues such as peak oil, climate change, fiscal deficits, trade deficits, overpopulation, disappearing bees, ozone depletion, etc.  Megan McArdle’s post on antibiotics seems to largely fit the bill.  Note that these issues are not Black Swan-type events; Black Swans are inherently unpredictable.  These problems are White Swans.

Posts about White Swans are often meant to evoke fear and panic, but my sense is that White Swans predictions almost never play out, and the reason they’re prevented has little to do with the proposed solution.  Indeed, any of the following may occur:

  1. The analysis is wrong, and the problem does not exist.  This may be the case with antibiotics, as suggested here (see the fifth chart especially).
  2. There is already a solution or safeguard in place.  This is how I feel about peak oil; the safeguard is pricing mechanisms.
  3. Raising awareness of the problem will lead to it being solved, without taking any policy action.  I’ve argued that this may be how climate change plays out.
  4. The problem requires a solution, and the proposed solution is the best solution.  (searching for examples)
  5. The problem requires a solution, but the proposed solution is not the best solution.  (searching for examples)

Overall, I’d say my thinking boils down to this: if you think there’s a problem that will manifest in 30 years, it’s appropriate to spend the next, say, five years talking about it, instead of rushing to action.


Like my earlier post, he suggests the problem will soon be solved by technology.

If everything comes together, we could see carbon emissions plummet without the federal government asserting more control over the economy.

He also calls for allowing utilities to vary pricing by time of day.  More here.

I have a hypothesis that in 150 years, the problems facing the world will be very different than what we see today.  Not because of a technological singularity, but simply because humans will have solved today’s hardest problems: poverty, war, crime, disease, climate change.

Here Robin Hanson links to a post arguing that solar technology will be economically viable on a large scale within a fraction of that timeframe.

This should be fantastic news for folks worried about carbon emissions or running out of oil. After all, projecting that a thirty year trend will continue for another ten years seems pretty safe.

A while back, I argued in favor of a wait-and-see approach to Climate Change, a position that would be supported by this knowledge.  It’s hard to know whether this projection is realistic, but equally hard to accurately project the effects of Climate Change.

Rather than view the recent failure of Cap and Trade as a defeat, I think liberals should view it as their opening jab or exploratory mission, and should learn lessons from it, so as to craft a stronger policy. The best way to do so is to listen to the smartest critics of cap and trade, to engage them, and to either confront their arguments directly, or to modify policy proposals such that specific criticisms don’t apply. Enacting climate change policy will be easier if Jim Manzi and Ross Douthat are backing a plan rather than rallying moderate conservatives and independents against it. I’ll highlight two key arguments that I think are worth engaging, and suggest approaches for dealing with each.

Think Global

Ross Douthat writes:

When it comes to actual mechanisms whereby Waxman-Markey becomes a model for the developing world, all I’ve heard from the left are neoconservative-style arguments about how “if the world’s leading power leads, everyone else will follow,” and visions of a carbon trade war between the West and China. Neither seems persuasive.

Adds a conservative-leaning reader of this blog (yes, this blog has readers):

I would go a step further and suggest that we will not have any meaningful climate change legislation in our lifetime because of the huge collective action problem and the discount rate for today’s economic gains/loss outweighs the future payoff enough to discourage effective action.

The arguments is as follows: Even if the United States could succeed in reducing American carbon emissions, so long as the developing world continues to rapidly increase carbon emissions as it develops, the global problem of climate change continues to grow. Climate change falls in the realm of foreign policy, not domestic policy.

I find this argument pretty compelling, although I don’t share my reader’s long-term skepticism. There is a collective action problem, but it’s not a huge one. The problem boils down to roughly two players. The West (Europe and the U.S.) has a greater sensitivity to climate change than does the Developing World (China, India, maybe Russia and Brazil). Though climate change effects all nations roughly equally, the Developing World has other pressing issues, such as poverty, which the West does not share to nearly the same extent. So in order for the West to persuade the Developing World to work to reduce carbon emissions, it will need to offer up concessions, at some cost to the West. The nature of the concessions, and the magnitude of the cost, is the crux of the collective action problem. If the U.S., Europe, China and India can agree on what that cost should be, I’d expect that smaller countries would follow suit.

Pass the Cost-Benefit Test

I’ve seen three approaches to refuting the cost-benefit analysis that Jim Manzi has used to attack climate change policy proposals: the first is to broadly question the applicability of cost-benefit to climate change policy; the second is to make specific criticisms of Manzi’s analysis without presenting an alternative analysis; and the third is to present an alternative cost-benefit analysis. I find the first approach to be highly uncompelling, and the second approach incomplete. The third approach, which requires digging into the technical nature of the problem, is the most convincing method. Public policy, broadly speaking, should be based on cost-benefits analyses, and if the case for action is as strong as many liberals believe, building a model to back a given policy should be doable.

In the comments to my earlier post on climate change policy, Joe writes:

The uncertainties aren’t just around how the climate will change, i.e. whether temperatures will go up by 2 degrees or 20 degrees, etc. (these are the uncertainties that he addresses). There are also uncertainties about the effects of climate change.

I think this is exactly right. Whether average temperatures rise 2 or 20 degrees is, in isolation, irrelevant. It’s the undesirable effects of temperature change that matter. My suspicion is that a probability distribution of projected future temperatures can safely use a normal distribution. Projecting the costs associated with these temperature increases probably does not; it may even make sense to use a Mandelbrot distribution, as I suspect Nassim Taleb is doing right now. As such, it’s probably reasonable to use an assumption set that’s further tilted towards extremely bad outcomes, rather than the baseline assumptions that Manzi points to in the IPCC. But someone needs to do the hard work of reading the IPCC’s report, deciding which assumptions to make, and building the case for policy action.

Neither of these objections is insurmountable, but both are real challenges. I suspect they’ll be overcome in time, but this policy debate is an open one, and those wanting to reduce carbon emissions have their work cut out for them.

would go a step further and suggest that we
will not have any meaningful climate change legislation in our
lifetime because of the huge collective action problem and the
discount rate for today’s economic gains/loss outweighs the future
payoff enough to discourage effective action.

My liberal friends are up in arms about cap-and-trade failing. I understand the frustration–climate is a hot topic, the Obama administration is (theoretically) strong right now, and the proposed solution is fairly moderate in nature, one that fiscal conservatives and libertarians (theoretically) should support. Furthermore, the there’s very little intelligent criticism that’s been offered publicly; the failure reads as political obstructionism rather than actual an actual policy disagreement. I’ll address two related questions: first, why did the bill fail, and are there valid policy objections to the policy? Second, why am I not that upset?

This column by thinking conservative Ross Douthat, frames the decision to postpone action in policy terms. Douthat’s argument presents a thinking conservative position on climate change, including a link to thinking conservative Jim Manzi, who should be required reading for any thinking liberal who cares about climate change. Read Manzi, read the responses and comments to his posts, and read his responses to the responses and comments. If I were to summarize Manzi’s position briefly, it would be: “There are serious costs both to acting too late and too soon on climate change. Most commentators are more concerned with the prior, when really the latter is a greater concern.” or, “Yes, climate change is an issue. Let’s not rush to enact bad policies.”

I’m not entirely sold on Manzi’s argument, but I’m enough influenced to be skeptical of the current legislation. Generally speaking, I’d rather have a good bill in 5 or 10 years than a bad one now. Just as conservatives should prefer Obama’s health care bill to Clinton’s–even those who oppose it–so should they prefer a future second iteration of climate change policy to the existing attempt. Not because the legislation is more moderate, but because it’s better one; it incorporates the strongest criticisms from the last round of debate. Climate change is a pressing issue, but it’s also a young one, at least with regard to serious policy proposals. More introspection may prove valuable–note that even the question of whether cap-and-trade is preferable to a simpler carbon tax policy is largely unresolved.

I also want to explore the designed effects of climate change legislation. Both cap-and-trade and a carbon tax are designed to add the price of carbon emission, a negative externality that affects everyone, into the price of actions that emit carbon. I see three main effects of this price adjustment:

  1. It signals information–in this case, that carbon emission is costly, more so than we previously thought, and should be held in check.
  2. It creates incentives, to reduce energy usage, especially when the energy source involves high levels or carbon emission, and to discover new means of clean energy production.
  3. It whacks people upside the head. Anyone who currently produces unclean energy, or consumes unclean energy, is offered two choices: either make costly behavior adjustments, or lose a lot of wealth.

At this point, I believe legislation only accomplishes the third effect. The first two are already occurring, due to the strength of the green movement. Everyone knows that global warming is an issue to be taken seriously, and there’s considerable social pressure encouraging energy conservation and clean energy initiatives. If a carbon-tax increases gasoline prices such that more drivers would buy hybrids and fewer would buy SUVs; homeowners install better installation and more efficient lightbulbs; and more entrepreneurs invest time and money in green technology initiatives, social pressure has the same effect. The magnitudes of each force can vary, and are somewhat difficult to measure, but I’m not convinced that the current pace of innovation is sub-optimal. Going green may not have all the economic effect it should, but it has added social benefits with real value: prestige, esteem, personal satisfaction, helping you get laid.

The third effect I list above–whacking the producers and users of unclean energy–causes significant pain. Factory workers lose their jobs; consumer products such as gasoline become more expensive, adding to the burden on the poor; and the economy as a whole suffers. I believe this is necessary pain, but I also think the pain can be delayed and dampened. As we improve our ability to produce clean energy, and to conserve overall energy usage, the pain associated with shifting energy production away from fossil fuels declines.

There are serious costs both to acting too late and too soon on climate change. Most commentators are more concerned with the prior, Jim Manzi’s more concerned with the latter. I’m somewhere on the fence.