Although global warming zealots continue their religious crusade, more research reveals skepticism toward the doomsday prophecies. Recently Finnish scientists published research that further debunks claims about the role of humans in generating global warming. Their thesis is that global temperatures are controlled primarily by cloud cover, which is a natural occurance that is beyond human control:
The opponents immediately denounced this as a junk science:
It is OK and normal to have debates within scientific community. We, regular lay tax paying people are understandably not shrewd in all intricacies of scientific debates around so-called climate change. Yet, I am sure many of us want to make sure that no financially ruinous global or nationwide social engineering scheme would be enforced on all of us by social activists who decided to side with a group of aggressive academic zealots claiming scientific consensus and squashing dissenting views.
In his Counterrevolution of Science (1955), F. A. Hayek wrote about the dangerous hubris of “science worshippers” who wanted to extend their theories, which at best had narrow application and limited experimental database, to reshape the life of entire humankind. The first aggressive spearheads of this hubris were “generation X” socialists, acolytes of Henri St. Simone, who congregated in and around Paris Ecole Politechnique from the 1810s to 1860s. They dreamed about New Christianity – a creed based on the religion of science. With its “Council of Newton,” it was to regulate entire life of society. In the past century, we already lived through projects designated to reshape the life of humanity through “scientific” societal laws peddled by Marxism. We also lived through national socialist attempts to breed the better race of human beings based on “scientific” laws. More recently, in the 1970s, driven by the same scientific hubris backed by moral considerations, we resorted to global ban of “evil” DDT. This led to the outbursts of yellow fever and mass deaths in the Third World.
During a brief period of soul searching and self-scrutinizing among the left in the wake of communism collapse in the 1990s, in his Seeing Like a State (1998), James Scott, a leftist academic, gave a severe critique of that hubris that he called high modernism arrogance. Not naming socialism directly and sparing the ideological feelings of his fellow comrades, who have been dominating humanities and social sciences, he subtitled his book as follows How Certain Schemes to Improve the Human Condition Have Failed. Still, it was a devastating accusation of the “science”-based social engineering, from German attempts to breed perfect healthy forests in the 18th century to the “scientific socialism” of the Soviets who methodically ruined Russian agriculture by their aggreesive collectivization. The current left are not as modest as Scott’s generation. They quickly moved on, sweeping their own history under the rug. Being emboldened by the crisis of 2008 (a new “sign” of capitalism end of times), the left are now ecstatic about the Green New Deal and its Stalinist global warming regulations that are peddled by the big-eyed “democratic” socialist of “color” from Congress. It seems we are invited again to step on the same rake in order to smash our forehead once again by adopting another scientific Utopia.
But as abstract ideas go, pollution taxes are pretty appealing. Holding constant lots of things that we can’t really hold constant, it means replacing the inefficiency resulting from poorly defined/enforced property rights with a world where prices more accurately reflect the costs of one’s decisions.
Let me come back to the things we’re “holding” constant in a bit. Why do I want to throw my weight behind shifting public perceptions in favor of pollution taxes?
Which is not to say a carbon tax isn’t overrated by the median policy wonk. There are a ton of important caveats, but on balance, as a policy for use in the next 50 years, I think they’re a useful tool to enhance efficiency or replace worse tools.
Again, there are no panaceas. I’m also not a huge fan of the “Economists’ Statement on Carbon Dividends” as written (for reasons I’ve hopefully mostly addressed). I suspect the best case scenario for my preferred carbon tax policy would be a modest improvement. I think the bulk of the gain would be a cultural shift away from “let’s regulate our problems!” to “let’s leverage incentives to address our problems!” Not Earth shattering, but a step in the right direction.
So let me state my position, then we can dig into criticisms and caveats.
Let’s make marginal shifts away from taxing investment and towards taxing negative externalities. As we go, let’s spend a lot of effort trying to study the impacts and adjust accordingly. Let’s heavily agument that with abatement policies rather than trying to return to some pre-industrial climate target.
Okay, let’s dig into criticisms and caveats.
Public choice considerations
Geoengineering and other alternatives
1-Public choice considerations
A Green New Deal will be a rent-seeking bonanza. Pollution taxes will face the same sorts of problems that plague the tax code in general. There will be intentional loop-holes and accidental screw ups.
We have to continue to push for reducing the complexity of tax codes in general. But I can’t deny that a carbon tax would be a step back on this margin.
Minus a hundred points for my position.
2-What about geoengineering?
Geoengineering sounds like a possible panacea. Maybe it is. But I’m not willing to flip a switch and find out the hard way all at once.
First off, geoengineering is scary. The climate is a complex system and complex systems are difficult-impossible to manage well. And that’s especially concerning if it means that anyone with a few million bucks can try to fiddle with Earth’s thermostat.
But it seems like a plausible tool that might be used to address climate change. Similar to my take on a carbon tax, I think the way to go is baby-steps plus research.
What about subsidizing “green _____”
Personally, I’m skeptical. Solar sounds appealing, and I (personally) think windmills are beautiful. But I don’t think the government will do a good job of picking winners and losers. Pollution taxes are appealing to me because they don’t require bureaucrats to choose. Again, I think the way to go is to use pollution taxes to offset other taxes–while continuing to advocate for reduced size/scope of government and a return to federalism.
Plus five points for my position.
We should also remember that GDP is an imperfect measure of well being. The current figures aren’t directly comparable to the figures we’d get in a post-carbon-tax world. A one-time fall in GDP doesn’t (necessarily) mean we’ve screwed things up.
Still, it’s worth remembering that a) we can go too far with a carbon tax, and b) we don’t have access to a silver-bullet solution. So let’s start small and gradually increase carbon taxes till we get close to (our best estimate of) the optimal level.
Plus epsilon points for my position.
The basic idea of a carbon tax is that we’re dealing with a global-scale externality problem. But small scale taxes are unlikely to do much beyond shifting where pollution happens. A fully effective tax would require multi-lateral coordination. And, as a country, we aren’t very good at that.
Trying to create a tax on imported carbon-intensive goods that didn’t face a tax at home seems a) sensible at first blush, and b) a massive opportunity for public choice problems.
On the other hand, we could justify a tax commensurate with the local impacts (something like 10% of the global impact). This fits nicely with my idea of starting small and adjusting at the margin.
But even within the U.S. there are coordination issues. Long Island will likely face net costs from climate change, but other areas will benefit from a longer growing season.
Plus 10 points for my position, but also minus 10 points.
Uncertainty cuts both ways: we’re currently accidentally manipulating the climate and that could turn out to be catastrophic. Trying to intentionally manipulate it in the other direction is also dangerous. Again, the appropriate focus is on marginal tinkering [much as it clashes with my non-interventionist priors] rather than ambitious global engineering [which grabs my priors by the lapels and knees them in the groin].
When I teach externalities, I draw a graph like this:
In this market, we end up with an equilibrium quantity defined by the point where Marginal Private Cost equals Marginal Social Benefit (MPC = MSB). But the Marginal Social Cost (MSC) is greater, so we get a deadweight loss equal to the triangle I’ve shaded in red and purple.
It’s important to note: we don’t actually know where the MSC curve is. It’s somewhere above MPC, but we’re basically in the position of trying to eliminate a subsidy we don’t know the size of.
The relevant models–climate models and economic models–are filled with uncertainty that we simply cannot resolve without real life experience.
What does the economic way of thinking tell us? Act on the margin. Setting a tax that pushes supply (MPC) up to the green line doesn’t fully address the problem (as I’ve assumed it to be in this graph), but it’s an improvement.
Even better, it’s an improvement where the biggest returns are experienced up front. This modest tax fails to get rid of the red deadweight loss (DWL) area, but it eliminated 3/4 of the total DWL.
Plus X points for my position where X is a random variable with an unknown distribution, positive first derivative, and negative second derivative.
At my friend’s behest I’ve been looking at Bob Murphy’s critique of carbon taxes. I find it’s shifted the magnitude of my prior opinion, but not the direction. I still think carbon/pollution taxes are a good idea, but I no longer think they’re a great idea. My take away from Murphy’s work is that the optimal carbon tax is fairly modest. My response is to advocate for getting a very modest carbon tax on the books, then gradually shift tax policy in that direction.
For climate change (and any other problem) we ought to be pluralists. A mix of approaches is ideal. Part of the appeal of Pigouvian taxes is that they allow and encourage a wide range of responses. The best pollution abatement scheme isn’t something we can look up in a binder. We have to discover it, and crowdsourcing is the appropriate way to do that.
But carbon taxes are only one part. We should also advocate for changes that will ameliorate harm. I am more bullish on these policies than I am on a carbon tax:
Make it easier for the world’s poorest people to move to rich countries that will be better able to cope with climate change.
Quit subsidizing flood insurance.
Quit subsidizing polluting industries (and other industries).
Even though geoengineering scares me, we should try to learn more. Ditto for any other possible tools that come along.
A lot has been said about Trump pulling the US out of the Paris Accords. Leftists have been apoplectic, foaming at the mouth even. Conservatives are baffled, if they have anything to say at all. What should libertarians think?
Libertarians in the United Kingdom, States, and Provinces are generally unilateralists (not isolationists), whereas libertarians in Europe, South Africa, and Latin America are generally multilateralists. I’m of the opinion that American libertarians are wholly wrong to claim that their foreign policy is libertarian. It’s not libertarian at all. Unilateralism is combative rather than cooperative and relies on nationalism rather than internationalism to make its arguments.
Multilateralism forces factions to come to a consensus, thus slowing down government action at the international level, while also forcing factions to interact with each other in a diplomatic manner at that same international level. Unilateralism allows states to do whatever they want, regardless of what others may think. Now let me remind you of what libertarianism stands for: peace, prosperity, and freedom through mutually beneficial exchange and agreed-upon rules that can be changed provided they go through the proper channels (legislation, judiciary, executive). (Am I wrong here?)
Which sounds more libertarian to you?
Now that we have issues of doctrine out of the way, what’s really interesting to note is the Left’s inability to see what Trump is actually doing: wagging the dog. Trump’s term as executive is not going well (surprise, surprise). And so, he does a mean-spirited thing that he hopes will distract.
Here’s how I see the Paris Accords (chime in if you disagree):
They (it?) have not, and will not – ever – accomplish anything in regard to climate change, but
because of this it is also an organization that is wholly non-threatening. It’s just a bunch of countries getting together, in good faith, to solve a problem (real or imagined)
Some hardline factions on the conservative wing in the US didn’t like that the Paris Accords are essentially glorified intern conventions, and some Leftist factions on the American Left absolutely revere green initiatives (even if they’re no good at greening anything other than lobbyist’s pocketbooks), so Trump pulled the plug.
ATTN published a video of An-huld (the really cool guy who made my childhood by being in all my favorite action movies like Predator* and who ended up being the governor of California). In that short clip, Schwarznegger starts by saying that 7 million individuals die from pollution-related illnesses.
That number is correct. But it is misleading.
People see pollution as “all and the same”. But some forms of pollution increase with development (sulfur emissions and some would argue that too much CO2 emissions is pollution as it causes climate change). However, others drop dramatically – especially heavy particules (Pm10) which are a great cause of smog. Julian Simon (the late cornucopian economist who is one my greatest intellectual influence) pointed out this issue and noted that the deadliest forms of pollution are those that relate to underdevelopment.
True, richer countries pollute and there are policy solutions (I have often argued that governments are better at polluting than at reducing pollution, but that is another debate) that should be adopted. But, these forms of pollution do not harm human life as much as those that come with poverty.
* By the way, when you watch Predator, do you realize that there are two future American governors in that movie? I mean, imagine that when Predator came out, some dude from the future told you that two of the main actors would end governing American states. Pretty freaky!
This post is part of the preliminary results of the NoL Foreign Policy Survey 2017 Pilot. I will be posting results throughout the week as I play around with the data. As always, I strongly emphasize that this is a pilot survey and these are just preliminary results.
Are libertarians climate change deniers? No. The majority agree that it is occurring, caused by human activity, and that it is harmful. They do not however support unilateral action by the United States government. At least not the average libertarian respondent.
Note that the last question, asking about supporting unilateral action, is on a different scale from the other three.
When you drill down by type of libertarian though you start to see stark differences. Left-libertarians agree much more strongly that climate change is occurring, caused by human activity, and harmful. They are also much more in support of unilateral action to prevent climate change.
What is driving the differences between type of libertarian? Part of the story seems to be that those who think climate change is harmful are more willing to act to address it, but I suspect a large part of the story is also that some libertarians, particularly market anarchists, simply do not trust the government. Market anarchists are less likely to believe climate change is harmful or caused by humans compared to libertarians at large, but the big difference in opinion is whether the government should act on it.
Thoughts? Tomorrow I will be posting the demographics of those who took the survey.