How much would carbon policies hurt?
10/06/2014 § 3 Comments
We’ve been talking about carbon policies to address climate change for years — the Kyoto Protocol was agreed in 1997 — but carbon emissions keep increasing. The recent news about the West Antarctic Ice Sheet seems to confirm that climate change and sea level rise are coming, ready or not. Policies are not biting enough to change emissions enough to have an impact.
One thing holding us back is that we don’t want to pay for it. There are interesting discussions about the best way to pay for climate change policies. Do we reduce economic activity now by a little? Or, do we grow faster now and pay more later but out of a larger pot of money? How do we divide our efforts among prevention, mitigation, and adaptation? But these interesting discussions also serve to delay, limiting our ‘prevention’ options and de facto pushing us into adaptation. We will end up paying one way or another.
Also, emissions reductions are not necessarily that expensive, as a new study confirms and earlier research has shown. Car emissions are a good example. I have driven American cars made in the 1970s; they were horribly inefficient compared to modern cars. We have learned how to motor around using a lot less fuel per kilometre, and we are getting better all the time.
I often think about the economic impacts of carbon policy as turning back the clock to some earlier time when we were poorer. That’s not to say I’m taking the Roger Pielke view that
energy and the economy have an immutable one-to-one linkage our only two options are either economic growth or ‘technological innovation in energy systems on a predictable schedule‘ — a view ably rejected by Paul Krugman. Less carbon, though, does mean less energy use, which does mean less energy-intensive production, which essentially means less stuff. It might mean prettier stuff, in a baroque/Japanese, let’s-make-it-exquisite sort of way. But, still, probably, not so many physical objects that have been transformed from raw materials into commodities.
So, what are we talking about? Even with more efficient cars, lighting, heating, hot water systems, etc., we might have to put up with less stuff. Can we place it in an era? Well, let me explain with US data, with the caveat that the New Zealand experience has been different. How about the 1980s? Or the 1970s? How awful was it, really, just to have one television set per household instead of three? Or, to have 50 square metres per person instead of 100?
On the other hand — and I think this is important when considering resistance to carbon policies — a lot of people aren’t much richer than they were 20, 30, or even 40 years ago. The recent focus on inequality keeps emphasising that growth has been better for some people than others:
There are two ways to look at this. The first is that moving to the same level of consumption as 1975-ish wouldn’t be that painful for a lot of people. They are already there. The consumption basket has changed, sure, but the overall level of consumption has barely moved.
The second way, the one that creates the resistance, is this: lots of people have gained only a little over the last 40 years. Would carbon policies ask them to give up what little they have gained? If so, that’s a big ask.
The question, therefore, isn’t just ‘how much would carbon policies hurt’. It is also, ‘who bears the brunt of the change?’