Thursday, February 14, 2013

The Other Half of the Global Warming Problem

For reasons I have discussed in earlier posts,  I am skeptical of the claim that global warming on the scale suggested by the IPCC projections is a serious problem that needs to be dealt with. In this post, I want to look at the other side of the problem. If one accepts the conventional view that it is a serious enough problem to justify the cost of the sharp reduction in the use of fossil fuels needed to substantially reduce it, can it be done?

The reason I suspect it cannot is that preventing global warming faces a public good problem at several levels. Consider first the individual level. One might argue that if global warming is going to make me worse off, that is a reason for me to reduce my use of fossil fuels in order to prevent it. The problem is that although it is a reason, it is a very weak reason, because I would be bearing all of the cost—driving less, or being colder in winter and hotter in summer, or paying more to get my electricity from solar power instead of from natural gas—while receiving only a tiny fraction of the benefit. As with other public goods, one would expect it to be underproduced and, since this is a public good for an enormous public, drastically so.

One popular solution to a public good problem is to have the good produced by government. Have the government hold down the production of CO2 by a carbon tax or a cap and trade system, subsidize the development of technologies for recyclable power, and in various other ways force its citizens to modify their behavior to reduce global warming.

One problem with this solution is that we have no good way of making a government act in the interest of those it rules, in part due to another public good problem. Anything I do to make government do the right things—figuring out which politician supports good policies and voting for him or contributing to his campaign, writing books or op-eds defending good policies and criticizing bad—is itself producing a public good for a large public, since almost all of the benefit of good policies goes to other people. Public goods, especially for large publics, are underproduced, which explains why many voters—about half of them, judging by the highly unscientific experiment of asking students in classes I teach—do not even know the name of the congressman who represnts them, and almost no voter knows enough about all of the relevant issues to have a sound basis for deciding how to vote. That outcome is referred to in the public choice literature as rational ignorance. It is rational to be ignorant when information costs you more than it is worth to you.

If we have no way of making government consistently act in the national interest, we cannot count on government action to deal with global warming, even if it is in our interest to do so. And even if we did have a reliable way of controlling our government, we would still face a second level of public good problem. Controlling global warming is a public good not only at the individual level but at the national level, since if the U.S. holds down its emission of CO2, any benefit is shared with all other countries, whether or not they hold down theirs. Hence even a U.S. government that did act in the interest of its population might choose not to deal with global warming unless it could somehow arrange for most other countries to do so as well. Such an agreement among many beneficiaries of a public good is hard to arrange. It is even harder when, as in this case, the benefits are very unevenly distributed. Even if global warming produces net costs, which for the purposes of this post I am assuming, the costs to some countries will be larger than to others and some countries, most obviously in cold regions, will probably benefit.

I have just offered reasons, at several levels, why nothing will be done to prevent global warming, even if it is worth preventing. Readers may reasonably ask how I can explain the fact that things are being done. The U.S. House passed a cap and trade bill some years ago, although it never made it through the Senate, and it looks as though there will be renewed attempts to get a carbon tax or something similar in the near future. The current administration has subsidized a variety of activities, such as biofuels and the development of electric automobiles, on the theory that they reduce global warming. Similar policies have been employed by a number of other countries, many of which committed themselves some years back to specified future reductions in carbon emissions.

The answer is that while such policies are not worth doing, politically speaking, as a way of reducing global warming, they may be politically profitable in other ways. A loan guarantee to a company whose investors support the current administration, for instance, is a private good, or a public good with a very small public, from the standpoint of those investors, and one they will be willing to pay for in campaign donations or other ways of rewarding the politicians responsible for it. A carbon tax provides a new way of getting money into the hands of government, where it can be used to buy votes or reward supporters. Cap and trade, along the lines of the actual bill passed by the House, generates valuable assets—permits permitting the emission of a set amount of carbon dioxide. Those assets can be, in the House bill were, allocated to politically favored groups. In all of these ways, the campaign against global warming provides rhetorical support for politicians doing things they would like to do, but things that, absent that support, might cost them votes.

Consider as an analogous case Obama’s stimulus program. Very likely Obama believed his own rhetoric, believed that it would bring down unemployment. But supposed he didn’t. As long as other people believed it, the stimulus made political sense for him, since it gave him a convincing excuse to spend large amounts of borrowed money. If he didn’t believe it he had to worry a little about the failure of unemployment to come down as predicted—but, as the most recent presidential election demonstrates, that problem can be overcome. He succeeded in getting reelected by a comfortable margin, despite the striking difference between what he predicted and what happened.

My conclusion is that there may be no practical way of using political mechanisms to slow or prevent global warming, even if it is worth doing. Public support for doing it will be used by politicians to do things they want to do, many of which will impose substantial costs, which is why they need the warming rhetoric to let them do them. The things they do are unlikely to be well designed to prevent global warming, since that will not be the reason they are being done. I offer as one piece of evidence the biofuels program. Part of the original justification for it was the claim that it would reduce CO2 emissions. At this point, a fair number of environmental leaders and organizations have conceded that it will not. It does, however, raise the price of corn, which makes it politically attractive to politicians who want farmers to vote for them, and there is no sign as yet that it is going to go away.

12 Comments:

At 4:42 PM, February 14, 2013, Blogger Jacob Oveson said...

David,

Have you considered geo-engineering solutions to the potential global warming problem? Undoubtedly much cheaper, and perhaps manageable even through charitable donation on behalf of concerned climatologists.

Though they would benefit many others in the process, thereby creating a massive instance of free-riding, it is still in their interest to do so if they can single-handedly eliminate the issue at a reasonable cost.

I'm not aware of the precise costs of proposed geo-engineeering solutions, such as 'the garden hose to the sky' in "Super Freakonomics"- but was wondering if perhaps you were.

 
At 4:55 PM, February 14, 2013, Blogger David Friedman said...

I don't have an expert opinion on the geoengineering proposals. One problem is that, unless it was very clear that they would work and would not have important adverse effect, it would be hard to keep governments from blocking them.

And if they did work but it wasn't sufficiently obvious, governments might have an additional incentive to block them--so as to keep the opportunity to use global warming arguments for things they want to do.

 
At 7:18 AM, February 15, 2013, Anonymous Daublin said...

There is another problem: what policy would you enact, even if you could overcome the public choice problems? Every policy I can think of is horrendous for humanity, much worse than finding ways to adapt.

There's a subtle but important bait and switch in most discussions around global warming. The bait is to say that there is strong evidence that current emissions are much worse than zero emissions.

The switch is to talk about policies that don't move emissions anywhere close to zero. They don't even move emissions by 10%. Carbon taxes, Kyoto's cap and trade, Energy Star regulations, and CAFE standards are all in this category.

These policies are not adequate as they are, and they are typically not amenable to being ramped up to something effective. For example, we aren't going to address CO2 by having really strict CAFE standards; we'd have to stop driving all together. We aren't going to have sufficiently efficient clothes driers; we'd go back to hanging clothes outside. We aren't going to have efficient hot water heaters; we'd have to heat our water in the sun, or just use cold water.

 
At 7:39 AM, February 15, 2013, Anonymous Anonymous said...

What right do a few people have to geoengineer anything? A room full of maybe 100 people potentially impacting billions? You want to see a global civil war give that a try. We are close now anyway. I am free to pursue happiness as I see fit. Not some nutjob scientists. It will be proven eventually it is the sun that affects our climate. Not anything we are doing. How could it be us when a single volcano has more impact. I am sick of this climate change BS. It is phony and fake. A marketing scheme at best and a new world order power grab at worst.

 
At 11:39 AM, February 15, 2013, Blogger Unknown said...

This is not a new analysis. The transition town movement has held this for a number of years. we must prepare for a very different future, and we must organize so that we can collectively deal with it when it comes.

 
At 9:16 PM, February 15, 2013, Blogger Jehu said...

Want a global warming program that would actually address the problem if you grant all the premises and conclusions of its proponents?

The only one I've seen that would actually be 'sufficient' is Rainbow 6, by Tom Clancy. Notice that nobody is proposing anything that drastic...and, oh yes, Clancy didn't intend that novel to be prescriptive, despite the fact that at least one of his novels probably has been used thusly.

 
At 11:48 PM, February 15, 2013, Anonymous RKN said...

As a married 50-some year old and childless by choice it's hard for me to get too concerned about aGW, its likely consequences or an economic analysis of the government's incentives to do something about it. Even if aGW proves true, its worse effects will occur long after me and mine are gone. And government moves even more slowly in these matters.

So, evolutionarily speaking, why should I care?

 
At 9:34 PM, February 16, 2013, Blogger David Friedman said...

To RKN:

"Evolutionarily speaking" you should not be a childless 50 year old--the fact that you haven't pursued the most direct route to reproductive success suggests that your objectives are not the same as the objectives of your genes.

So far as your objectives are concerned, many people value things that do not directly affect them or their children. You might like the idea that other people will be happy, that work you have done will continue to exist and be of use to others, or any of a variety of objectives beyond your own lifespan.

And, of course you do not know what that lifespan will be. It would be a cruel joke if the solution to aging was discovered in time to give you an almost unlimited lifespan--and you were then burned up by global warming.

Fortunately, the second half does not seem likely.

 
At 1:39 PM, February 17, 2013, Anonymous RKN said...

"Evolutionarily speaking" you should not be a childless 50 year old--the fact that you haven't pursued the most direct route to reproductive success suggests that your objectives are not the same as the objectives of your genes.

It's a poisonous idea that molecules (genes) have objectives, even metaphorically speaking.

So far as your objectives are concerned, many people value things that do not directly affect them or their children. You might like the idea that other people will be happy, that work you have done will continue to exist and be of use to others, or any of a variety of objectives beyond your own lifespan.

Sure, but I wasn't asking why I shouldn't be a nihilist, but rather why, especially given I'm an evolutionary dead end, I should care about aGW or an economic analysis of government's reaction to it, where the consequences of both are likely to obtain (if at all) well after I'm gone.

But you know, the more I think about it this is probably a rhetorical question, although possibly of some value to posterity.

 
At 4:07 PM, February 17, 2013, Blogger Glen Whitman said...

I couldn't let this post go by without mentioning Bruce Yandle's "Bootleggers and Baptists" model of regulation.

 
At 10:43 PM, February 19, 2013, Anonymous Jim Rose said...

The best writer on global warming is still Thomas Schelling.

He specialises in strategy so he focused on climate change as a bargaining problem.

Schelling drew in his experiences with the negotiation of the Marshall Plan and the NATO treaty.

The Kyoto Protocol was not about actions but results measured over a decade later.

International agreements rarely work if they talk in terms of results.

They work if signatories promise to perform specific actions now.
• A NATO member did not, for example, promise to slow a Soviet invasion by 90 minutes of it happened after 1962.

• NATO members promised to raise and train troops, procure equipment and supplies, and deploy these assets geographically. All of these actions can be observed, estimated and compared quickly.

 
At 10:46 PM, February 19, 2013, Blogger Texan99 said...

Have you checked out the revolt underway by German and Spanish taxpayers this week? The green subisidies that add 10 cents or more to every kilowatt hour are suddenly getting very, very unpopular with voters, which is getting the attention of their political leaders. The green power producers are howling that their captive customers are being taken away.

 

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