Here is a reply to Declan’s comments on a previous post about Climate Change. My reply, once again, was a little long winded so I separated it into this post. FYI, Declan writes on his own excellent weblog at Crawl Across the Ocean.
Some choice quotations:
The money raised via a carbon tax doesn’t disappear, it just gets redistributed through the economy. To the extent that the carbon tax accurately reflects the discounted cost to society from global warming, the net effect should not be any kind of negative impact on growth, just a redirection of resources away from more carbon intensive sources/uses of energy in favour of less carbon intensive ones.
The money raised by income taxes doesn’t disappear either, it just gets redistributed through the economy. But the real question is how quickly the money circulates around the economy – the more circulation, the stronger the economy. Since energy products are quite inelastic with respect to price, people will probably still grit their teeth and pay up. But the money that was destined for other purchases gets taken out of circulation for the government to spend, which slows down the economy.
Another gross simplification is to think about the following: Let’s say I lend you $20. You hand over $20 to me, and I go spend it on some fruit and dark chocolate and eat it. You then come back to me and say “OK, I’d like to call your debt” and I say “They money is all still inside the economy, what difference does it make?”
In the absence of a carbon tax, continued increases in the price of oil and gas are likely to lead us back to coal. You suggest we pursue alternative forms of energy but a carbon tax would encourage exactly that.
Perhaps coal, perhaps nuclear, or perhaps the cheapest available “alternative” energy source. I agree that a carbon tax will help encourage the development of alternative sources of energy, but for the wrong reason. It’s also not a mutually exclusive decision whether to use fossil fuels or alternative energy, we just choose fossil fuels because it’s cheap and convenient. But when alternative energy is cheap and convenient (e.g. in the Pacific Northwest there are dams all over the place), it works too.
I think you are severely underestimating the cost of adapting to a new warmer climate, and your final paragraph is predicated on an assumption that the final shape of the climate wil be the same regardless of what we do, but that’s not my understanding of the situation.
I have no idea what the environmental liabilities of greenhouse emissions are. In fact, I don’t even know if the balance of changes would be an asset or liability. If you’re some evergreen tree in a forest, you’re probably loving the fact that your CO2 source is increasing, but hating the fact that higher temperatures cause more clouds, reducing your chlorophyll utilization rates from less sunlight. Just like when anything changes, there will be winners and losers, but the survivors will always be the ones to adapt to changing circumstances. I’ve always had a hunch that Canada would stand to gain big time in the event of global warming, but talking about the benefits of planetary warming is political taboo, so I haven’t bothered to write about it yet.
Yes, it’s tragic to see polar bears drown on thinning ice shelves, but who says this hasn’t happened millions of years ago? What solid evidence do we have to show that the climate circa 1850 was the “perfect” climate for the planet? Why not cool down the earth instead?
Aside from that, your argument that Canada shouldn’t do anything because we are a small country doesn’t make any sense to me. If you lived in the U.S. would you be arguing in reverse?
If I was the USA, I wouldn’t be complying with Kyoto either simply because other countries have too much of an incentive to cheat by forcing the USA to buy carbon credits derived from less than credible certification processes. It’s also a tough sell when you see India and China go through the version of their own industrial revolutions and realize that you’d be playing with both arms behind your back globally if you actually had to cut your carbon emissions to less than 1990 levels. It’s the tragedy of the commons on a global scale. It would greatly help if there was some very, very good evidence that definitively links temperatures to greenhouse activity, but there isn’t a smoking gun like the ozone hole or acid rain, so I guess what I’m trying to say is “brace for impact”.
On a total side note, if things got really bad on earth (i.e. the average temperature rose 10 degrees and it was quite obvious that the oceans would boil in another 100 years if we didn’t do anything), I do believe at present we have the technology to send solar reflectors into orbit and reduce solar exposure on earth. It would be expensive, but not prohibitively so. I recall the Russians thinking of turning satellite reflectors ONTO the earth at nighttime in Siberia to increase the growing season. I’m not sure whether this was actually feasible, but it was a cool article when I read it.
This post is ruthlessly pragmatic in view, politically it would be suicide to mention it in any conference on climate change! I’d probably get lynched on the stage. I’ve never been one to avoid confrontation, however.