How can the world achieve economic growth while at the same time decarbonizing the global economy?
This question is important because there is apt to be little public or political support for mitigation policies that increase the costs of energy in ways that are felt in reduced growth.
…Policies based on the argument that putting a price on carbon will be “not costly’ are a house of cards, and based on a range of assumptions that could easily be judged very optimistic. Looking around, what you will see is that the minute that energy prices rise high enough to be felt by the public, action will indeed occur, but it will not be the action that is desired by the climate intelligencia. It will be demands for lower priced energy. And policy makers will listen to these demands and respond. Climate policy analysts should listen as well, because there will be no tricking of the public with rosy scenarios built on optimistic assumptions.
Roger Pielke continues his role of “Honest Broker“: given the need to stabilize carbon emissions, what are the policy options, and what will they really cost? Unlike almost every mitigation advocate I’m aware of, Roger is examining the assumptions of the baseline emissions trajectories, finding that the required emissions cuts are much bigger than those assumed in the projections of economic costs implied by such proposals as Lieberman-Warner.
Highly recommended — don’t miss this post and its predecessors. BTW, Roger linked to a Guardian report of strikes in the EU against rising fuel prices. The politicians of course are looking for measures to reduce street prices, not to increase them. Unfortunately, this quote is precisely true:
“Any subsidies or tax-cuts would simply divert even more money to oil-exporting countries,” Joaquín Almunia, the EU economic and monetary affairs commissioner, said.
Freeman Dyson published a review of an economist’s 100-yr model of the various carbon-control options, here. The short form is, carbon tax has the most positive outcome, Gore-ism has the worst, but a new technology which is carbon-free would trump all.
The Clinton Administration at one point proposed a carbon tax, claiming that it would have only a slight effect on the economy. This was implausible even to the Washington press corps. The administration finally provided the economic modeling that supported the claim. It turned out that the model assumed that the corporate income tax would be reduced to zero at the same time.
Why wouldn’t they be playing similar games today?
Brian, thanks for your comments.
I second your support for the NY Review of Books piece you referenced — full of typical Dyson insights. I wrote a post based on Dyson’s article, framed by this excerpt
Bob, thanks for comment and the history on the Clinton carbon tax proposal. I’m not informed on that at all — do you have a link you can recommend that would help me get some background?
No doubt — though the CBO studies I’ve looked at seem straight. The problem that Roger is focused upon is the “foundation layer” of all such studies — the IPCC scenarios. That means that even my favorite energy economist William Nordhaus may be understating the costs of his DICE model projections.
Meanwhile, we can be sure that the Bootleggers and Baptists are performing their roles.
Cheers, Steve