Hair shirts

Now that nearly everybody (except US Republicans, of course) accepts the scientific evidence on global warming, the problem is to determine the best available response. As I’ve argued before, the main obstacle to action is the belief that we can’t protect the environment unless we are willing to accept a radical reduction in our standard of living.

Most of the arguments along these lines recently have been coming from anti-environmentalists, including some economists. We can add to the list Robert Samuelson who says

The dirty secret about global warming is this: We have no solution. About 80 percent of the world’s energy comes from fossil fuels (coal, oil, natural gas), the main sources of man-made greenhouse gases. Energy use sustains economic growth, which — in all modern societies — buttresses political and social stability.

Samuelson’s claims are notably lacking in any reference to supporting evidence beyond his gut feelings. The great majority of economic analysis suggests on the contrary, that market economies are entirely flexible enough to deal with an increase in the cost of any one commodity (in this case, the effective social cost of CO2 emissions) and that the cost of stabilising global CO2 levels at 550 ppm will be in the range of 1-3 per cent of GDP.

Unfortunately, the recent suggestions by Tim Flannery and Bob Brown that Australia should close down its coal industry only go to reinforce the claims of people like Samuelson. It’s notable that the Oz, which is trying, like others, to switch from outright denialism to a phony pose of moderation, jumped on these comments with glee.

There does seem to be, in parts of the Green movement, a “hair shirt” feeling that unless policy requires painful sacrifices, it can’t be doing any good**. So, we get opposition to the use of offsets to neutralise emissions, and a reluctance to look at possible options like carbon sequestration. Reader Robin Green raised this point with me in a lengthy email which I’ll quote a bit

Our intuitions may deceive us here. My crucial point is that while, greens are quite right to say that, for example, reduction is better than recycling, because it involves less energy and waste, not taking a flight should actually be equivalent (apart from network effects) to taking a flight and properly neutralising it – and should be seen as such, if we can work out the other problems I mentioned.

Hair-shirted arguments that “we MUST fly less” are likely to be seen as deceptive, and are likely to make some readers “throw the baby out with the bathwater” and switch off, in my view. This a great shame, because offsetting has great potential.

Far better that this hair-shirtism, surely, would be compulsory carbon neutralisation of all flights – spreading the burden equally, and increasing the incentive to develop more efficient ways of offsetting

There’s still plenty of doubt over whether emissions trading will work, and plenty of problems to be resolved. The same is true for CO2 sequestration, solar power, safe nuclear power, big improvements in energy efficiency, and all the other options we have to stabilise climate. But improvements in any of these directions will make us all better off. Neither a hair-shirt hope that nothing but drastic cuts in living standards will work nor a “what I have, I hold” insistence on doing nothing different from what we are doing now is going to be helpful here.

* Meanwhile, the Stern review has performed the useful service of showing how few people actually understand discounting. Here’s Samuel Brittan who imagines that the (almost) century-old neoclassical theory of interest developed by Ramsey and Fisher depends on new-fangled ideas about happiness studies.

** It’s not only Greens to whom this kind of thinking appeals. You can see a fair bit of it in certain economic rationalist circles (not all) when discussing economic reform, or in Austrian-influenced discussion of recessions.

77 thoughts on “Hair shirts

  1. It may be that Australia will have to reduce its GHG emissions by more than 60% by 2050 if we are to cooperate in achieving a stabilisation level of 550 ppm CO2-e. Countries with high per capita emissions will probably need to reduce their emissions more than countries with low per capita emissions. If Australia was to reduce its emissions by 60%, they still will only be marginally lower per capita than present per capita emissions in the UK. The Stern Review (p. 474) cites a study by Hohne et al which looks at various options for a global framework for reducing greenhouse gas emissions.

    The study discusses four options for different countries to reduce greenhouse gas emissions, it does not provide figures for Australia, but does for the United States, which also has high per capita GHG emissions. The results for the US are emissions 20-40% less than 1990 levels in 2020, and 70-90% less than 1990 levels in 2050. This is for a 450 ppm CO2 concentration, which corresponds to somewhere around a 550 ppm CO2 equivalent concentration. If we want to mitigate more of the low temperature increase effects of climate change, such as severe coral bleaching of the Barrier Reef, we will probably have to aim for a lower stabilisation target than 550 ppm CO2-e.

    My preferred way for Australia to mitigate climate change would be for an emissions trading scheme and complementary measures for dealing with domestic emissions, and a carbon tax on coal exports, which will perhaps be somewhere around $5.90 per tonne CO2-e. If Australia can provide effective emission reductions, and reduce coal exports through a price signal, we will be setting a good example. If we can also achieve some economic benefits through efficiency increases, others may even want to imitate us.

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