Kyoto, Carbon, and Al Gore
We know what has happened to the climate so far, and (with a good degree of confidence) we know why. Working out what is going to happen to it from now on is much more difficult. And that makes judging policy especially hard -- especially when you understand that the costs of ambitious front-loaded carbon abatement programs (such as the Kyoto Protocol, fully implemented) would have had (a) only a modest impact on our climate prospects, according to the current models, and (b) enormous economic costs. Yes, something must be done -- but need it be as costly and as ineffective as that?
Facing such huge but distant risks, the crucial thing is to think long term, the very thing that Washington does worst. An initially moderate carbon tax, an initially gentle scheme of mandatory caps on greenhouse-gas emissions, and an honest plan to promote long-term energy efficiency could nudge the economy with minimal disruption on to a path of much lower climate-change risk. At the same time -- anathema to many environmentalists -- serious thought should be given to policies for adapting to climate change. Whatever happens, we will have to live with higher temperatures. And, above and beyond the warming that is already, so to speak, in the pipeline, it will make sense to tolerate some more, and adapt to it, rather than aim or hope to stop it altogether.
Al Gore's movie is not intended to make people think that way. But if it forces politicians, at last, to think at all about the issue, that might be sufficient justification.
The Crook piece does a good job of summarizing where, to my knowledge, the majority of the economics profession is on the issue of global warming. Most economists I know would endorse
- Rejecting the Kyoto treaty,
- Imposing a modest carbon tax.
My understanding is that the economists in the Clinton administration fought vigorously against the Kyoto treaty but lost the internal policy battle to the Vice President's office. I don't recall the full story of that battle ever being told. If any reader knows of a reference, please let me know.
Maybe former Clinton appointee Brad DeLong can enlighten us. Brad has lately been calling for greater candor by former administration officials. This is a good opportunity to lead by example.
Update: A loyal reader alerts me to an old Wall Street Journal article, which tells a bit of the story:
the president's economic team -- including Treasury Secretary Robert Rubin; Deputy Secretary Lawrence Summers; Janet Yellen, who heads Mr. Clinton's Council of Economic Advisers; and Gene Sperling, head of the president's National Economic Council -- is urging a go-slow approach for the economy's sake. Privately, some raise the specter that ambitious targets for reducing carbon emissions, say, to 1990 levels by 2010, could trigger economic upheaval and energy-price increases greater than the 1970s oil shocks.Update 2: Brad DeLong fills in a few more details (with some gratuitous swipes at George Bush, natch). Thanks, Brad.