The irony of laissez faire climate policy


in Economics, Politics, The environment

Half-built skyscraper

There are those who have adopted what amounts to a business-as-usual climate change policy – hoping that free markets and technological development will stabilize greenhouse gas concentrations at a safe level and deal with the consequences of the climate change that is already on the way, due to past emissions. While a lot of people take this position for self-interested reasons, I think there are at least some who adopt it in good faith. They look back at previous challenges, and situations where some people said a massive societal effort was required, and they see that the problems were less severe than advertised and that a muddled government response was adequate.

The great irony of taking this approach is that it is virtually certain to produce the opposite outcome from what its proponents are seeking. Right now, we have the chance to establish powerful incentives for critical voluntary actions: things like energy efficiency, stopping the construction of coal plants, and developing renewable sources of energy. Mechanisms like a carbon tax, feed-in tariffs for renewables, incentive programs, and the like are ways to encourage both private actors and firms to take these steps. If we fail to put those policies in place and we allow emissions to keep on rising for another decade or more, avoiding catastrophic climate change will only be possible through rigid controls: rationing, strict mandates, and major interventions in business and the lives of individuals. If we fail to take advantage of the time available for a smoothed transition to a low carbon economy, the transition will necessarily be a more abrupt and painful one.

The heuristic that says “we dealt with past problems, therefore we need not sacrifice economic liberty to fight climate change” leads, in all probability, to a situation where curtailing those liberties is the only road forward.

{ 5 comments… read them below or add one }

NatureAdvice March 5, 2009 at 8:24 am

With the growing concern over climate change there’s been pressure for the government to respond with targets aimed at combating the issue. Indeed, it’s become almost fashionable for political parties to add a green flavour to policies in order to show how socially responsible they are. There’s no doubt that there needs to be direction from a higher political level to point people in the right direction towards living more efficient, greener lives and making this process as easy as possible. I think not only the government people have important part to play to reduce the climate change %.
By the way, for your reading interested in funding for climate change ideas. Check out Four winners will receive $200,000 each to pursure their ‘Changing Climate Change’ idea. This initiative is being run by Green Mountain Coffee Roasters.

. March 5, 2009 at 3:16 pm

“How serious is the threat to the environment? Here is one measure of the problem: all we have to do to destroy the planet’s climate and biota and leave a ruined world for our children and grandchildren is to keep doing exactly what we are doing today, with no growth in the human population or the world economy.”

Speth, Gus. The Bridge at the Edge of the World.

Faith March 7, 2009 at 1:45 am

The market will provide!

. March 24, 2009 at 4:39 pm

Republican Rep. Michele Bachmann’s Over-the-Top Nonsense

During a radio interview in her home state of Minnesota over the weekend, Republican Representative Michele Bachmann [R-MN] called on all global warming deniers to report for duty “armed and dangerous,” ready to “fight back hard” in a “revolution” against President Obama’s cap and trade plan, warning that it “has the potential of changing the dynamic of freedom forever in the United States.

. May 2, 2009 at 1:46 pm

Krugman on climate change policy critics

I don’t especially mean to pick on [Robert] Samuelson, but this column exemplifies a strange thing about the climate change debate. Opponents of a policy change generally believe that market economies are wonderful things, able to adapt to just about anything — anything, that is, except a government policy that puts a price on greenhouse gas emissions. Limits on the world supply of oil, land, water — no problem. Limits on the amount of CO2 we can emit — total disaster.
Funny how that is.

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