The marriage of climate and economic justice


in Canada, Economics, Law, Politics, Psychology, The environment

Something occurred to me as I was walking through the snow this morning. There’s an episode of Yes Minister (The Bed of Nails) in which the hapless minister Jim Hacker is charged with implementing an integrated national transport policy. His savvy and manipulative chief civil servant explains:

It is the ultimate vote loser… If you pull it off, no one will feel the benefits for ten years. Long before that, you and I will have moved on… In the meantime, formulating policy means making choices. Once you do that, you please the people that you favour, but infuriate everybody else. One vote gained, ten lost. If you give the job to the road services, the rail board and unions will scream. Give it to the railways, the road lobby will massacre you. Cut British Airways investment plans, they’ll hold a devastating press conference that same day.

Ultimately, the minister and his permanent secretary conspire to be freed from the job, first by proposing a service-slashing approach to transport reorganization, in which they deliberately alert the prime minister about unpopular changes it would imply for his constituency, and then using Sir Humphrey’s second strategy:

We now present our other kind of non-proposal… The high cost, high staff kind. We now propose a British National Transport Authority with a full structure, regional board, area council, local office, liaison committee, the lot. 80,000 staff, billion-a-year budget. The Treasury will have a fit! The whole thing will go back to the Department of Transport.

What occurred to me in the snow is that while Hacker and Humphrey may have been using these approaches as a dodge, one could say metaphorically that those calling for strong climate change policies have in some ways pressed the same two strategies.

First there was the dream of an economically efficient solution via a carbon tax. All the most sophisticated and credible economic analyses projected that the best way to solve climate change was to put a rising cost of carbon across the entire economy and then let individuals and firms make their own economic choices to adjust. This policy was favourably contrasted with trying to reduce fossil fuel use and the resultant greenhouse gas (GHG) emissions through regulation. It was also tailored to appeal to people on the political right: rather than imposing particular technological choices it relies on the free market to adapt naturally to the increasing cost of a previously-neglected factor of production, just as they do every day as commodity prices like oil and copper spot prices do.

What seems to have sunk this strategy is the willingness of those on the political right to play Russian roulette on climate change, assuming the damage we do won’t be that bad or that some future technology will solve the problem painlessly. Coupled with that is the unreasoning hostility to taxes that has been embraced by some right wing populist figures, movements, and political parties. Proposing an environmental policy that can be given the derogatory label “a tax on everything” is challenging in a climate where such figures are influential, and can make it easy for an incoming right wing government to scrap on the basis of “giving money back to [insert name of jurisdiction] families”.

The carbon tax idea was always an awkward fit for the “social greens” to use Clapp and Dauvergne’s terminology. In Paths to a Green World they differentiate between four broad streams within environmentalism: market liberals, institutionalists, bioenvironmentalists, and social greens:

If your analysis is that our system is beset by an ever-destructive capitalism which must be deconstructed, the virtues of a carbon mitigation measure designed to function through efficient capitalist markets was never likely to appeal. Perhaps it speaks to the climate justice dimension when carbon tax revenues are put to purposes that aid the disadvantaged, as with refunds to those with low emissions under a cap and dividend scheme or proposals to use carbon tax revenues to fund a basic income system.

That’s the second set of policies that occurred to me in the snow, corresponding to Humphrey’s “high cost, high staff” straw man. That’s the mainstream media criticism consensus on proposals like the Green New Deal: that they can’t see the rational connection between proposed elements like a job guarantee and climate change, and that the set of new government benefits being proposed seems unreasonably costly.

We surely can’t know what strategies will succeed on climate change. There has never been a problem sufficiently similar to serve as a credible model, so we can never say with complete confidence that one or another past movement suggests the best activist strategies in the world today. We’re going to need to keep trying multiple strategies, especially if we’re committed to democracy. Under a democratic system the populace must ultimately begrudge and tolerate any burdensome actions their society is undertaking for the sake of a stable climate. It has to be akin to the general tolerance of taxation, and be an expected and embedded norm to be part of a society progressively moving away from carbon fuels.

It’s great that social greens are so passionate and able to turn a belief that they’re fighting for justice into enthusiasm and motivation. It probably helps to have a comprehensive vision for societal reform, as opposed to the rather abstract and unemotive “what strategies for decarbonization can work, if we put it ahead of all other priorities?”.

{ 7 comments… read them below or add one }

. March 1, 2019 at 4:09 pm

Anybody who thinks a program like the Green New Deal is unmanageably expensive is going to be a bit surprised by the costs of a fifty-year evacuation and abandonment of all of South Florida and significant portions of coastal eastern North America and the Gulf.

. March 3, 2019 at 10:19 pm

Green New Deal critics can’t see the forest for the trees

Some view this “green intersectionality” as damaging to the fight against climate change. They argue that these other policy goals are irrelevant, costly and will weaken support for the plan. Others suggest, to the contrary, that it is politically savvy to link issues that voters clearly care about to the fight against climate change.

Author and activist Naomi Klein has eloquently argued why both sides miss the point. The prevailing view places issues into silos, and fails to grasp that the crises of inequality and environmental devastation are “inextricably linked — and can only be overcome with a holistic vision for social and economic transformation.”

Again, research has long identified these links. Take for example, the much discussed job guarantee that provides a social safety net in the form of publicly funded “green jobs,” such as insulating homes or environmental rehabilitation. This idea comes from the work of economists like Pavlina Tcherneva, and it fits with the broader notion of a “just transition” — the idea that the people who lose their jobs in the fossil fuel sector as a result of the transition to a green economy should not be left behind.

anon May 17, 2019 at 4:12 pm

For mainstream parties global warming isn’t important enough to put ahead of other objectives. So, leftiest bolt it onto their redistributionist agenda and right-wingers incorporate it into their persecution narrative. Everyone is just using it as an argument for what they already wanted, rather than examining the problem in its own terms.

. July 18, 2019 at 3:52 pm

The Democrats’ nascent third effort, the Green New Deal (GND) championed by Representative Alexandria Ocasio-Cortez and endorsed by Kamala Harris and other presidential hopefuls, is therefore designed differently. It is intended to have the durability of legislation, but to be so broadly appealing to Democrats it can be passed without Republican support.

Thus its main innovation: targeting climate change and social inequities together. A blueprint released by Ms Ocasio-Cortez and Senator Ed Markey, one of the architects of the 2009 bill, promises universal health care and affordable housing, as well as extremely steep emissions cuts. This has been viewed as a naive effort to cure all the ills of modern capitalism at a stroke. Yet it is also intended, in theory more pragmatically, to expand Democratic support for emissions cuts by harnessing the two main parts of the party’s coalition: college graduates who want climate-change policy and blue-collar workers whose jobs are threatened by it. Resistance from those workers’ representatives—for example Joe Manchin of West Virginia, the ranking Democrat on the Senate energy committee—was another reason why Waxman-Markey failed. The social policy in the GND blueprint is designed to win them over.

The enthusiasm the green deal has generated, from the climate activists who invaded Mitch McConnell’s Senate office this week as well as the 2020 contenders, is testament to more than Ms Ocasio-Cortez’s salesmanship. Its emissions targets, which would include decarbonising electricity generation within a decade, are at once vastly ambitious and merely commensurate with what scientists recommend. That makes it hard for anyone concerned about global warming to gainsay the proposal. It has a powerful moral allure. Yet the gravity of climate change also means the world cannot afford another failed effort by America to curb its tide of carbon pollution. And the green deal appears to have no chance of success.

Only a unified Democratic government—with a filibuster-proof majority or no filibuster to worry about—could entertain passing it. This is not simply because the climate-related proposals in Ms Ocasio-Cortez’s draft are left-wing. In fact, by allowing a possible role for carbon pricing, nuclear power and carbon capture-and-storage, they are more moderate than many activists would like. A bigger problem is that by lumping together climate and social policy the proposal appears to confirm one of the main Republican arguments for inaction on global warming: a contention that Democrats are using the issue as a smokescreen for a left-wing economic agenda. This has hitherto been an exaggeration; Democrats have been pushing carbon pricing, a market-based solution, for a decade. Yet the green deal provides compelling evidence for it, which makes the prospects of Republicans returning to sanity on global warming even more remote.

It might therefore seem sensible that the deal’s architects are only counting on Democratic votes. Yet moderates such as Mr Manchin—who says the GND is “not a deal, it’s a dream”—seem unlikely to support it. The proposal is already being used to attack such Democrats in rural states with lots of extractive industries. Opposing it would offer them a relatively low-cost opportunity to define themselves against their party. It is therefore hard to imagine anything resembling Ms Ocasio-Cortez’s blueprint passing into law. And if it did, Republicans would unite to overturn it, just as they did in response to Mr Obama’s much less provocative health-care reform. The inconvenient truth for Democrats is that they cannot impose their policies by legislative fiat any more than Mr Obama could do so by executive order.

. July 22, 2019 at 1:15 pm

The Green New Deal, as first proposed, had two problems. The first is that it was only a sketch, with handwaving in lieu of detail on the massive economic reorganisation it envisages. The second is that it included a gratuitous list of progressive measures—including a federal jobs guarantee, universal basic income and universal health insurance—that are only tangentially related to climate policy. Many top-tier Democratic candidates, who would no doubt balk at such sweeping changes, signed on to the Green New Deal nonetheless. Yet with the release of Mr Biden’s and Ms Warren’s plans, both less quixotic and more scrupulous than the earlier sketches, the debate is much improved.

Curiously, both proposals dodge the question of a price on carbon, whether through direct taxation or a cap-and-trade scheme. Though research into more cost-effective technology for carbon capture and sequestration or solar power is helpful and necessary, a carbon price incorporating the negative externality of pollution would seem a simple first step. Mr Biden’s plan only nods towards the principle “that polluters must bear the full cost of the carbon pollution they are emitting” and says nothing more on the subject. Ms Warren’s plan does not mention it at all.

. October 20, 2019 at 9:19 pm

Sorry, the Greens Don’t Make the Grade for this Progressive
On race, abortion, worker justice and more, they flail and miss the mark.

. December 28, 2019 at 7:32 pm

Why bundle together the seemingly unrelated issues of climate change and economic inequality? To some, the appeal rests in political economy. Any plan to free an industrialised economy from fossil-fuel dependence will create losers. To succeed politically, it must mobilise groups of winners more powerful and passionate than those losers. Plans to tax carbon and pay out the revenue as a dividend may seem appealing; what voter could resist cash rebates? But the benefits, from lowering emissions to paying out dividends, are shared broadly and thinly, while the costs are concentrated on a few politically powerful industries. A carbon refund of $100 per month might be too small to mobilise a critical mass of voters, while the associated tax would prompt a no-holds-barred campaign by deep-pocketed fossil-fuel firms. A Green New Deal, in contrast, might promise sufficient goodies to sufficiently organised interest groups, such as labour unions and domestic manufacturers, to gather a winning political coalition.

To others, the Green New Deal is something more revolutionary. Roosevelt saw the Depression as both a threat to liberal democracy and the product of an economic system that put profits ahead of the welfare of the working man. Similarly, left-wing activists view climate change as the result of unbridled capitalism. They aim to solve it by redistributing economic and political power.

From either perspective, there is plenty in the Green New Deal to make economists nervous. Yes, many approve of government funding for public goods such as infrastructure and education. Some see the sense of embracing second-best solutions to serious problems when the ideal approach is politically untenable. But the Green New Deal largely dispenses with analysis of the costs and benefits of climate policy. It would create large opportunities for rent-seeking and protectionism, with no guarantee that the promised climate benefits will follow. It might chuck growth-throttling tax rises and dangerously high deficits into the bargain as well.

Of course, much the same could be said for the New Deal, or indeed the effort to win the second world war. In fact, the criticism of the economic approach to climate change implicit in the Green New Deal is not that it is flawed or politically unrealistic, but that it is a category error, like trying to defeat Hitler with a fascism tax. Climate change is not a market glitch to be fixed through pricing, in this view, but part of a dire social crisis. It is hard to judge such arguments without decades of hindsight. But they seem to be winning, raising the possibility that, for the moment, economists have lost the chance to lead the fight against climate change.

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