Having blogged twice this week (here and here) on Paul Krugman’s green economics essay, I want to add a couple of quick comments on what it takes to contribute usefully to this discussion.
- You can’t say anything useful about climate policy unless you’re willing to confront the philosophical issue of how much we owe to future generations. This, as much as anything, marks the difference between reasonably thoughtful commentators like Krugman and blithering imbeciles like Al Gore. Krugman’s essay doesn’t address this issue in any depth, but he acknowledges that it’s a crucial issue and he tells you (roughly) where he stands on it.
It’s not enough, incidentally, to invent principles for the sake of convenience and then abandon them as soon as another issue comes along. If, for example, you believe that we should treat future generations as well as we treat ourselves, you should support an aggressive stance on climate control and oppose policies that allow us to live better at those future generations’ expense; in particular you should oppose the taxation of capital income. If you believe we shouldn’t care about future generations at all, you’ll be led to the opposite stance.
- You can’t say anything useful about climate policy if you’re completely ignorant of economics. Krugman, remarkably, implicitly denies this point when he gives a respectful airing to climatologist James Hansen’s illiterate notion that cap-and-trade policies undercut individual altruism in a way that emission taxes do not. I’ve blogged here about where Hansen’s argument goes wrong. This is not a subtle issue; it’s Economics 101. By treating Hansen seriously, Krugman must be either making a rookie mistake (which happens occasionally to all of us, Nobel prize or not) or trying to curry someone’s favor; my money is on the former.
When’s Hansen’s op-ed originally appeared, Krugman was more critical of it on his blog, here: http://krugman.blogs.nytimes.com/2009/12/07/unhelpful-hansen/
“Cap and trade puts a quantitative limit on emissions, but from the point of view of any individual, emitting requires that you buy more permits (or forgo the sale of permits, if you have an excess), so the incentives are the same as if you faced a tax. Contrary to what Hansen seems to believe, the incentives for individual action to reduce emissions are the same under the two systems.”
So I’m not sure that “rookie mistake” is the right answer.
“If you believe we shouldn’t care about future generations at all, you’ll be led to the opposite stance.”
I don’t think that logically follows. If what you are saying is that if you give no value to future generations, then you will be indifferent to capital income taxes versus other kinds of taxes, that might be true, but you can still take the logical position that taxing capital income causes more present distortion than other kinds of taxes and that it harms current generations more than other forms of taxes, and remain opposed to taxing capital income on other grounds.
Warren Meyer, one of my favorite bloggers, put it in a way that I really like:
Sorry. Forgot the citation:
http://www.coyoteblog.com/coyote_blog/2006/10/advice_to_the_r.html
John Jenkins: Yes, I absolutely agree with you. I should have worded this a little more carefully.
I didn’t read Krugman’s piece as giving economic credence to Hansen’s argument. He points it out as an interesting one that’s different from what other people have said, explains what it is, and then dismisses it as irrevelant to his economic analysis. That doesn’t seem like a mistake of any sort, it’s merely an acknowledgement of something critics might bring up, and a way of making clear that he’s heard it, and doesn’t think it changes anything about what he’s saying.
I suppose the differences between tax and cap and trade are political. The lobby groups will favor whichever they perceive as being in their interests. Cap and trade is more complicated and I would think it will be easier for the politicians to do very little, while seeming to be doing something, with a cap and trade than a straightforward tax. This way they can please the voters and the lobbyists, at least for a short period. I think Hansen may have been wrong economically, but in a way his mistakes about the two approaches makes his point for him.
As to how much we value future generations, that is a difficult one. If the past is a different country, then how much more so the future? How much do we owe to people in other countries?
Take the present. As a group, Westerners obviously care less about the fate of people in developing countries than about people in their own country. We care a bit more about folk in other developed countries which are more like our own. A relatively small expenditure on clean water could save the lives of millions of children, but we do not consider it a priority to do this at small cost to ourselves. We do not read news reports of accidents in developing countries unless the death toll is much higher than in the West. If this is justified, and we take the same view with climate change, then we have no obligation to spend to reduce our emissions to save their lives (particularly if the same expenditure could save more lives directly on clean water). There is a possible distinction: one could argue that they have no clean water because they “run things badly”, but our emissions might kill them directly. One is neglect, the other active harm.
So how about the future. We care about ourselves in the future, but less than in the present. We care about our children’s future. We care a bit about our countrymens’ future, and I suppose it reduces over time. At some point, we will care about our coutrymens’ future about the same as developing countries populations now. Is your great grandson in 70 years time valued the same as an Angolan now?
Thats what I think we do care about, but what should we care about? Is that Angolan less worthy of our care? Should we care as much about our future descendents? We could try to come up with some “rules”, or “values” such as “all current lives are of equal value”. In some ways we find this perfectly acceptable. I think most people would say it was just as wrong for me to murder an Angolan as an American. But this does not translate into actions. We will give $5 to help Johnny down the road go to Disneyland before he dies of cancer, but that same $5 could save a few lives elsewhere. Our actions do not match up to the value that all current lives are equal. Steve has talked before of the difference between a “statistical” life and “Johnny down the well”. We will spend millions to save Johnny, but much less to prevent a statistical death. Poor Johnny, with his cancer and all. Humans are very inconsistent, and I think it is not possible to come up with a system of rules we find universally satisfying.
So how much do we owe future generations? I think it is reasonable to refrain from actions that I know will cause harm to others, even in the future. I would think it wrong to leave a bomb that would go off in 100 years time, activated by a human presence. I think it just about as wrong as leaving it to go off today. So do I think I should avoid harming future generations? Yes. Do I think I have an obligation to actively better therir lives? No.
I’d like to see more research done on extracting carbon dioxide from the atmosphere. Plants can do it. Surely we can out-think a bunch of plants.
Can we outthink plants? Not as easy as it sounds. Can we outthink ants? They make up more of the biosphere than we do, and have been around longer. They do pretty well in short.
We might in a pinch be able to outthink some specific plants, like the forsythia or the juniper bush, but all of them together? I have my doubts.
Actually, now you mention it Ken, the crab-grass in my lawn manages to out-think me every year.
Harold, what about a bomb that would go off in 10,000 years but eradicates every cancer in children today?
My money is on the latter. Krugman has a fondness for GSFC’s unmanned spacecraft.
Dave: I would plant the bomb, unless it was very, very big.
Neil: It is quite easy to take CO2 out of power plant stacks as the concentration is about 20%. We can do this with todays technology. We do not do it because it costs too much. Stripping CO2 out of the atmosphere at a fraction of the concentration (0.035%) is therefore totally impractical. Once we have capped all our power stations, then give it a look.