Wednesday, September 09, 2009

Forget the bang and not even a whimper...

Science writer Ron Bailey, whose work is frequently and admiringly cited by GM advocates takes a look at anthropogenic global warming and throws up his hands.  Bailey is noted by many including me as a former AGW skeptic who was persuaded by evidence and consensus that the problem was real, and he wrote honestly about it.

He has now reached a new, and remarkably hopeless conclusion.
Clearly, econometric models tell us that implementing smart policies could avoid some damage from climate change. But whether or not the benefits outweigh the costs depends entirely on the policies being optimally adopted. But will governments and international agencies be able to sustain smart policies over the next century? The tribulations of the European Union's cap-and-trade scheme and the current political jockeying over the 1,468-page Waxman-Markey climate change bill in the U.S. Congress are not promising. On the international level, rapidly developing countries like China, India, and Brazil are refusing to accept limits on their greenhouse gas emissions.
Along similar lines, numerous econometric models project that while climate change will have relatively minor effects on developed countries it will significantly harm poor countries. One proposed policy soluton is to have rich countries that emit a disproportionate share compensate poor countries. While this idea might seem appealing to some, one must also consider the sorry 50-year record of wealth transfers in the form of foreign development aid. As development economist William Easterly has argued, most of the $2.3 trillion in aid that rich countries have poured into developing countries over the past half century has been wasted. Is there any reason to think that trillions in climate change aid would be any more effectively managed?
Man-made global warming may simply be a negative externality for which the transaction costs are too high. In other words, any benefits achieved from trying to mitigate global warming will most likely be swamped by the costs of distributing the corporate welfare used to buy the political acquiescence of various industries. As much as one might hope to implement good public policy to deal with the problem, policy nihilism might be the only rational response to global warming. [More]
His logic is sound, and is echoed by other serious observers such as Jim Manzi.  His objections have moved on to the fact that addressing AGW would pose a serious political problem, diverting us inefficiently from an optimal form of government.
We are left, then, wandering in exactly the wilderness of mirrors that I described earlier.  There is no analytical basis on which we can really “put a price on carbon”.  It becomes pure power politics.  This isn’t just theory.  Consider seriously the evidence of what really happened in the Waxman-Markey debate.  That wasn’t random.  Even more, consider how such taxes have really been set in the UK.  Matthew Sinclair has a recent paper in the journal Energy & Environment in which he compares the total green taxes paid by Britons to the estimates of external AGW costs created by them according to various well-known and authoritative sources such as the IPCC, Nordhaus, Tol and DEFRA.  Take the example of driving.  According to this paper, Britons currently pay motoring taxes (net of road construction and maintenance) that are somewhere between 5 and 50 times the AGW externalities that they impose.  The paper argues that massively excess green taxes are paid economy-wide.
I yield to few men in my admiration for Hayek and his ideas.  His prediction that the welfare state would lead to serfdom, however, has (thus far) not been correct.  I don’t think that a carbon tax will be the one event that will push the free world into socialist slavery.  But it does seem clear that the same dynamics he described decades ago have re-emerged, simply with a different theoretical justification.  The same problems with planning that he highlighted will also be present now.
Taxing carbon to reflect its social costs seems like a common sense idea.  Unfortunately, it simply provides another excuse to politicians to raise taxes and exert more power over us. [More]
Both posts seem remarkably bleak, even as the authors cogently lay out their reasoning. They marshal more intellectual horsepower than I, of course, but even cursory reading is depressing as heck.

Both points of view rightly deal with conditions and facts as we know them today.  We don't have a cheap technological fix for AGW.  Of course, there is no way to factor future technological or cultural changes (lower energy use by simple choice, for example) right now.  But wouldn't it be curious if this was the first problem humankind simply labeled "too hard" and dropped entirely?  Is there no evidence in history of scientific effort to tackle seemingly intractable problems only to find at least partial and evolving answers?

I would argue that both these points of view would have been just as valid when we began discussion over the Clean Air Act, or the Clean Water Act.  And yet, we have admittedly imperfect solutions in place that at the least have decreased the number of news stories about smog alerts and rivers on fire.  Have the environmental benefits outweighed the costs of those actions?  I believe they demonstrate we can at least mitigate such problems without totally shackling the national or global economy.

The "political nihilism" of Bailey is not the enabling mindset to build a healthy culture around, IMHO. It certainly hasn't been how agriculture has faced its challenges.  It seems to me a short step from all-out despair at the human condition and prospects.

Both positions are not simply downers, but seem to match up with the pattern someone once noted in AGW skepticism.
  1. It's a hoax
  2. It's real, but not caused by humans
  3. It's real and humans contribute to it
  4. It's anthropogenic but too hard/expensive to fix.
The evidence these arguments are based on is constantly being amplified by new research.  They could be totally right is their analyses as of this moment, but I think it is a part of the human heritage to tackle the impossible routinely.  Their work is as prone to error as those who take the other side.  If they are wrong, we doom ourselves to living with considerable consequences we needn't.  If the other side is wrong, we slow economic growth and endure imperfect government.  The two worst case scenarios are hardly equal.

For agriculture, the most noteworthy aspect of the above arguments is how both readily agree to the idea of external costs of AGW.  It would seem the agricultural community is blithely unaware of this widely accepted economic concept.  The intense pushback from Farm Bureau and most farmers is based on the naive discovery, "Hey -this won't increase my profits tomorrow!"
On September 1st, Energy Citizens, the combined efforts of 23 Illinois farm, industrial, retail and energy associations will host a rally in opposition to proposed Cap & Trade legislation at the Crowne Plaza Hotel in Illinois' capital city, Springfield.
The rally is designed to bring public awareness to cap and trade legislation that will cost an estimated 2 million high paying American jobs, raise gasoline and diesel prices, raise electric rates and reduce global competitiveness of American companies. The groups intent is to point out the widespread opposition to cap and trade legislation that will damage the agricultural, manufacturing, retail, energy and transportation  industries of Illinois which provide the foundation of Illinois' economy. [More]
 At some point somebody needs to 'splain to them the solution to AGW is not supposed to be a profit center for farmers, it's the arrival of a long-overdue bill.  Our profession is acting like some unnamed friends of mine who conveniently slip out to the restroom when the bar tab arrives.


Anonymous said...


I attended the rally in Springfield and the one item that was not mentioned at all was paying producers for conservation efforts. Rather, the focus of every speaker offered the stage was the impact of higher costs and how those would impact the bottom line. Robert Murray, he owns coal mines, was by far the best speaker of the day and made a very emotional plea indicating how the impact of cap and trade would hurt his company and employees. Jean Payne of the Il Fert and Chemical Assoc. was equally as good pointing out that domestic fertilizer supplies would almost disappear resulting in more imports and reliance on foriegn inputs- especially nations who do not have this legislation.

I don't want to hear any producers looking to profit from this bill and I hope that element is pulled away. What we need to hear is how this bill could hurt agriculture, manufacturing, retail, frankly everyone as we look at the potential for increases in energy costs, material costs, and living expenses. Besides, like with the horse slaughter ban those stopping horse slaughter in the US did not stop horse slaughter and consumption worldwide, it just moved to another location, and that will happen here. If we cap emissions in the US fine, but those emissions will come from somewhere else and that is an element we cannot control.

John Phipps said...


Your words essentially echo Bailey's (we can't afford any answer) and Manzi's (we don't have the political ability domestically or globally). Ergo: no, we can't.

I try to include the best examples of positions other than my own. I hope these excerpts are useful for your efforts to understand. I'll try to include some of the predictions the auto/power industry made before the CAA & CWA too. Such doomsaying is a pretty familiar persuasion tactic.

One demurral, however. Perhaps it's time we stopped thinking of ourselves as the leader of the globe if we won't budge until China does. It is interesting to note they are making a huge investment in nuclear power (post soon). It's a long shot, but what if China does negotiate in good faith? would you then point to India? Indonesia?

There is a risk in leading, and perhaps we are too risk averse for this role anymore.

Anonymous said...

Good points. I think there is a distinction on leadership here. It is one thing to lead and show we are committed to change and enacting change while the flip side is lead into a blood bath. Economically speaking, we are needing to compete with China, India, etc. in order to provide incomes and economic growth domestically. If we enact legislation to change something we need to think what the unintended consequences would be. Horse slaughter is still my best example. If you want to rid the world of horse slaughter (which I support horse slaughter) outlawing it here while the plants reopened in Mexico obviously was not the answer. If we shut down industries and they move overseas to a land where they can continue production and those products are still purchased, we create a lose-win rather than the win-win we should always be seeking.

I still think global warming is a red herring, but I also think we need to be conscious of our actions in order not to create a situation that is potentially harmful. This, like most debates currently going on, is not an easy answer or quick fix. Time, study, and thought is much needed here.

Tom Wayburn said...

This man has already rejected the only solution to climate change that will actually work. With phrases like "optimal form of government" used to refer to the plutocracies of the US, UK, and other developed countries, "free world" used to refer to the strongholds of capitalism, and "socialist slavery" used to refer to economies that suppress the profit motive and the unrestricted concentration of wealth, he tells me that he has made up his mind to political failure. The most important component of a valid solution is economic shrinkage, which requires economic planning. Capitalism must be rejected as it requires economic growth. To save space please see the introduction to this heresy at