I've written a fairly lengthy reflection on the climate change issue. This was occasioned by the recent discovery of a worthy adversary--they are extremely rare in this arena.
The author of this article, Jim Manzi, did a front page report for the National Review on global warming a few months back. This article is a summarization of what he explained then. He essentially agrees with the scientific conclusions of the IPCC that there is a high likelihood that global warming is in progress and is largely attributable to human-sourced greenhouse gas emissions. However, unlike most articles that begin with this premise, he follows it with an intelligent argument against aggressive mitigation measures to reduce these emissions. Here's what's rare: the argument is made intelligently. Here we have a man who has a reasonable understanding of the issue, but a moral value system with which I and many other environmentalists differ. The use of this presentation is that it allows us to measure the gap created purely by moral differences--without the obscurities and confusions introduced by ignorance, stupidity, dishonesty, and other vices which so very frequently infect the discourse produced by both of the main parties to this dispute.
Mr. Manzi's modest appreciation of the value to be found in biological diversity may be estimated from his passing reference to the possibility that some damages from climate change may be "non-monetary." Diversity is deemed non-monetary by the economists for the simple reason that we do not know how to place an accurate, objective valuation upon this type of "asset." This is partly because we do not have a market price that businesses are willing to pay for the privilege of ecosystem destruction: businesses do not pay a price for this privilege, nor is there any market in such transactions. This prevents us from doing a conventional calculation of diversity's present value; our lack of future knowledge prevents effectual predictions of its future value. As a result of all this ignorance of value, the value of this "asset" is assumed to be zero or something very close to it in typical econometric models. So, here we have a values disagreement. I am willing to pay a higher price for conservation than he is, and, since climate change is likely to be a primary cause of ecosystem destruction, I am also willing to pay a higher price to limit it.
I think he is correct that the main thrust of mitigation should presently be government-led programs in the rich nations to develop new technologies that will render emissions reductions cheaper--ideally to the point that they are cheap enough to persuade developing nations voluntarily to forego greenhouse gas emitting technologies. Under every reasonable scenario, developing nations will emit more greenhouse gases than developed nations over the next few decades. Their climate policies matter immensely. This research policy is the most significant public policy option available in terms of long-term consequences and in terms of global impact.
Nevertheless, I'm inclined still to support the imposition of a carbon tax in the developed world. The transaction and enforcement costs he speaks of certainly would be prohibitive at this time in the developing world; yet, in the advanced nations such costs would be much lower. Also, if designed efficiently (starting at about 10 cents per gallon of gas and half a cent per kilowatt hour, then moving higher very gradually and predictably to perhaps 50 cents and 2.5 cents over 10 years), the economy could adjust slowly enough that its current capital investments would not be squandered. This would create the technology-forcing effect of which he speaks and cut a practical path for the rising nations to follow. As to his assumption that a carbon tax would be permanent, I say this is not in itself bad. Furthermore, I think there is an opportunity for a major political deal to be cut on this tax issue whereby for every dollar of revenue that is collected as a carbon tax, another specified type of tax is cut by an equivalent amount. In this way, politicians can say that taxes are not being raised, merely redistributed. How about this: instead of taxing production (eg, with the income tax and corporate income tax), tax consumption through a carbon tax? Would the economy not benefit if these particular taxes were simply switched, with no overall increase or decrease in tax revenues? Such a tax would probably have the collateral effect of reducing our dependence on oil from our enemies and non-friends.
One of Mr. Manzi's most important and insightful points is that those who claim certain knowledge that climate change will be catastrophic are intellectually equivalent to those who claim they know beyond doubt that the whole theory is a hoax: both arguments are braindead--climate science is uncertain by definition (I mean literally by definition, as in mathematically provable). Therefore no one can make predictions about the climate with certainty. Period. Once this is recognized, it becomes clear that there is a risk of catastrophe just as there is a risk that climate change will not occur due to balancing factors in the climate system. The question then arises (and Mr. Manzi correctly identifies this as the essential question to face on this issue), what price ought we to pay to limit this risk. Again, up to a point he conceptualizes this intelligently as a matter of hedging risks, like taking out an insurance policy on the world. But, he does not go far enough in distinguishing where the analogy breaks down between those who fear we are wasting money on a fantasy problem and those who worry that we are ignoring a huge risk of disaster. The distinction is this: the former stand only to lose a fairly limited amount of money (even the infamously aggressive mitigation measures proposed in the Stern report only entail spending about 2% of GDP each year at worst), while the latter may lose an unknown amount--not just of money, but of lives as well. When potential losses are unlimited, as Mr. Manzi implicitly states, would it not be wise to err on the side of reducing such an inordinate risk, even though this margin of safety must come at the expense of a greater risk of spending more than necessary? In other words, simply put, the two risks are not commensurate--even if both are equally likely, the risk of catastrophe is the one we ought to be more concerned with and toward which we ought to direct a preponderance of our resources. This imbalance of risks diminishes the utility of gauging the scale and optimal response to this problem through traditional cost-benefit analysis--or, at the least, it warps the conclusion of such analysis in the direction of taking stronger precautionary measures. Despite the low probability of enormous loss, the size of the loss is potentially so much larger than that expected under high probability scenarios that it comes to dominate the numbers turned out by a pure cost-benefit analysis. The other reason why this catastrophe possibility will tend to dominate analysis of the climate change issue is that it inspires a degree of justifiable fear that neither middle-of-the-road nor optimistic scenarios can match for psychological impact. Of course, deciding what to pay for this catastrophe insurance is a difficult question, or, I should say, a subjective question. Once more, at the end of the analytical path we arrive at a fundamentally moral dilemma: the value of our material comfort vs. the value of the lives and well-being of the unborn, the value of the lives and comfort of the rich vs. the value of the lives and comfort of the poor, the importance of the climate change priority vs. the importance of other competing priorities (like money for national defense or biomedical research or education...).
So far, at both national and global levels, we have done little more than research the nature of climate change (which is an extremely important activity, though not sufficient). We have yet to construct a single test plant for carbon sequestration. We're still shopping around for a suitable insurance policy as the risks mount. Globally, we are spending less on this issue than any sane analyst has recommended, including Mr. Manzi. This headless, undirected condition is directly attributable to the absence of American leadership. The EU has tried to lead, but lacks the executive energy and decisiveness necessary to make an impression. Practically, America has little to lose by becoming the vanguard nation on this matter--it will help us to maintain our technological preeminence and to reestablish our moral leadership. Also, the timing should be favorable. The Chief Engineer at General Electric (which manufactures a lot more windmills than solar panels) recently said that he expects solar to be competitive without subsidies in the sunnier parts of the country (and in a number of foreign countries) by 2015! The CEO of REC, the largest solar manufacturer in the world, expects this to happen even earlier, by 2012. We could don the mantle of leadership in the confident expectation of reaping PR benefits worldwide without suffering the burden of overly heavy carbon taxes or massive government research programs. The government could then function as a kind of coordinator to help the economy transition efficiently into the post-carbon era enabled, at bottom, by scientific discovery and actioned by private sector innovation.
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