Finding a Middle Way

Paul Krugman is firmly in the global warming camp. I don't agree. But I'm willing to listen to what he says. I think there can be a compromise position which buys some insurance while minimizing the economic damage. My problem is that I don't see much willingness to negotiate, much desire for moderation, and no real willingness to hear alternative viewpoints on the climate.

Here's Krugman's viewpoint from an op-ed in the NY Times (extracting the key bit):

The truth, however, is that cutting greenhouse gas emissions is affordable as well as essential. Serious studies say that we can achieve sharp reductions in emissions with only a small impact on the economy’s growth. And the depressed economy is no reason to wait — on the contrary, an agreement in Copenhagen would probably help the economy recover.

Why should you believe that cutting emissions is affordable? First, because financial incentives work.

Action on climate, if it happens, will take the form of “cap and trade”: businesses won’t be told what to produce or how, but they will have to buy permits to cover their emissions of carbon dioxide and other greenhouse gases. So they’ll be able to increase their profits if they can burn less carbon — and there’s every reason to believe that they’ll be clever and creative about finding ways to do just that.

As a recent study by McKinsey & Company showed, there are many ways to reduce emissions at relatively low cost: improved insulation; more efficient appliances; more fuel-efficient cars and trucks; greater use of solar, wind and nuclear power; and much, much more. And you can be sure that given the right incentives, people would find many tricks the study missed.

The truth is that conservatives who predict economic doom if we try to fight climate change are betraying their own principles. They claim to believe that capitalism is infinitely adaptable, that the magic of the marketplace can deal with any problem. But for some reason they insist that cap and trade — a system specifically designed to bring the power of market incentives to bear on environmental problems — can’t work.

Well, they’re wrong — again. For we’ve been here before.

The acid rain controversy of the 1980s was in many respects a dress rehearsal for today’s fight over climate change. Then as now, right-wing ideologues denied the science. Then as now, industry groups claimed that any attempt to limit emissions would inflict grievous economic harm.

But in 1990 the United States went ahead anyway with a cap-and-trade system for sulfur dioxide. And guess what. It worked, delivering a sharp reduction in pollution at lower-than-predicted cost.

Curbing greenhouse gases will be a much bigger and more complex task — but we’re likely to be surprised at how easy it is once we get started.

I'm willing to consider cap & trade and carbon taxes, but they must be put in a package that includes a lot of funding for more real science (with a watchdog to ensure that fanatics like the Hadley CRU group and their cronies don't do more fraudulent "science"). I favour more money into basic science and support for technological innovation rather than caps & limits & taxes. I think the long term solution is to find clean energy that out-compete 'dirty' energy. You can get there by taxing the existing energy (but that drives up prices for everybody). Or you can get there by finding newer cheaper ways of doing things. I favour the latter.

I live in British Columbia which imposed a carbon tax last year. The legislation promised that it would be "revenue neutral", i.e. the tax would be added on carbon but there would be tax giveaways to offset the added tax revenue to protect the poor and vulnerable. But this "offset" is invisible. I have no way of telling if the government is living up to its rhetoric. (My cynical side says 'no, after a very visible giveaway in the first year to show their good intentions, they have pocketed the taxes this year'. As the old adage says: out of sight, out of mind. Politicians count on this.)

My hackles are up on the global warming crowd pushing for legislation because so much of what they are pushing for is outside the purview of the public. I keep hearing a refrain from the past: no taxation without representation. In other words, government -- which is a messy business akin to sausage making -- needs to be done in public and the operations of government need to be transparent. Otherwise you don't have democracy. You have an oligarcy of the rich or an aristocracy of ideological fanatics. In the real world, legislation is messy and usually finds some middling way via compromise. That's what I want to see. I think climate is complex. Simplistic answers don't make sense to me.

Here's the point made by Krugman that is a key selling point for me:

...should we be starting a project like this when the economy is depressed? Yes, we should — in fact, this is an especially good time to act, because the prospect of climate-change legislation could spur more investment spending.

Consider, for example, the case of investment in office buildings. Right now, with vacancy rates soaring and rents plunging, there’s not much reason to start new buildings. But suppose that a corporation that already owns buildings learns that over the next few years there will be growing incentives to make those buildings more energy-efficient. Then it might well decide to start the retrofitting now, when construction workers are easy to find and material prices are low.

The same logic would apply to many parts of the economy, so that climate change legislation would probably mean more investment over all. And more investment spending is exactly what the economy needs.

I think it is critical to get people back to work. Unemployed workers means potential wealth that will never be. It is far better to get them into the workforce and create things of value. So retrofitting or building a more energy efficient future is an idea I support. I'm big on conservation and energy efficiency. What I'm not big on is hypocrites who have a monstrous carbon footprint telling me to cut off my toes to fit the tiny, tiny carbon footprint they have mandated for me.