Friday, March 14, 2008

Climate Policy Guidebook

Now that the debate in the US has largely moved beyond the existence of climate change and on to its potential solutions, there's a great need for educational tools to help the public understand the pros and cons of a complex array of competing policy options. One of my readers kindly sent me a copy of a recently-published book entitled, "Climate Solutions: A Citizen's Guide", by Peter Barnes. This short book is a laudable and highly readable effort in that direction. I wish I could recommend it more enthusiastically, and not just because he ultimately endorses a policy of emissions cap & trade with dividends, which is close to my own preference.

Although I didn't approach Mr. Barnes's book expecting to agree with everything in it, I was pleasantly surprised by how much of it meshes with the realistic and market-oriented response to climate change that I have promoted in this blog for the last four years. Most of the points on which I would differ with him are either not very consequential, or can be attributed to the differences in our backgrounds: entrepreneurial vs. corporate, journalistic vs. technical. For example, his anti-corporate bias extends to the point of seeing the support of oil or power companies for a proposal as a valid argument against it. Populism may be in vogue, but its appearance here undermines the rigor of his analysis. Similarly, his dismissal of nuclear power seems based on outdated arguments about waste management and safety, though I doubt it will change any minds. These concerns aren't trivial, but by themselves they wouldn't prevent me from recommending "Climate Solutions" to colleagues or friends. However, before I handed anyone a copy of this book, I'd want to clarify two key points:

First, the case for a carbon tax is much stronger than the straw man that Mr. Barnes sets up and knocks over. In particular, I don't believe that enacting cap & trade legislation would require any less political heroism than a carbon tax, because their net effect in raising the prices of energy and other goods with embedded emissions would be very similar--a fact sure to emerge in any serious Congressional debate on either measure. For that matter, the argument for cap & trade is also stronger than the one laid out here, when you include its key advantage in discovering the market-clearing price for carbon over time, and its ability to drive reductions to their most efficient--and lowest-cost--providers. Readers relying on this book to arm them for cocktail party debates, rather than using it as a helpful introduction to the subject, will see their conviction for cap & trade crumple the first time they encounter a well-informed supporter of a carbon tax.

The other weakness of the book results from Mr. Barnes's ambivalence about emissions offsets. The environmental effect of greenhouse gas emissions is equivalent without regard to source or location, and that concept is essential for a cost-effective global strategy for reducing them--the only kind of strategy we can buy enough of to get the job done. Few would dispute that offsets require better standards and a globally-trusted certification process. Nevertheless, treating the US as a closed system for purposes of emissions reductions would cut us off from an enormous pool of remedial and preventative emissions reductions in developing countries. That would have the dual effect of forcing us down the more expensive path of premature asset turnover and brute-force industrial-scale reductions, and cutting off an important channel for the flow of capital and technology to the developing world. Equity must be a key element of any global effort to address this global problem, but I don't accept the sins-of-our-fathers rationale for our shouldering most of the cost. I also doubt most Americans would regard per-capita emissions parity with China as an appropriate goal, without recognizing the differences in per capita GDP and productivity.

Mr. Barnes has a good journalist's knack for making complex topics understandable without over-simplification. If there was ever a subject in dire need of that skill, it is climate policy. "Climate Solutions" provides a good layman's introduction to some very complex issues, though it might have been more effective and useful, had he focused on providing a balanced overview of all the options, without leading the reader so directly to his preference for cap & trade. With the caveats described above, Mr. Barnes's book is worth a look. It can be purchased from the publisher or on Amazon, and a brief excerpt is available here.

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