Governing Geoengineering

The full audio of this June 25, 2009 AEI event is available here (MP3). We found this 2.5 hour discussion to be one of the more informed and objective reviews of the whole range of policy options relating to climate change.

Scott Barrett, formerly of Johns Hopkins University’s School of Advanced International Studies, now at Columbia School of International and Public Affairs, lead off the event with a presentation of his working paper “Geoengineering’s Role in Climate Change Policy.” This is a superb presentation of mitigation to adaptation to geoengineering. I haven’t yet found a web copy of Dr. Barrett’s paper, but have found an earlier 2007 paper The Incredible Economics of Geoengineering.

Also Dr. Barrett’s 2007 book “Why cooperate?: the incentive to supply global public goods” can be browsed on Google Books. Here is one relevant section on geoengineering.

Comments on Barrett’s paper are presented by Bryan D. Caplan of George Mason University and Nobel laureate Thomas C. Schelling of the University of Maryland School of Public Policy. Open Q&A follows, some of which is informed.

My comments:

[1] Scott Barrett looks to be a reliable source on the topic.

[2] Prof. Barrett illuminates how serious is the free riding problem (because of the very large costs associated with mitigation), and thus why global climate policy is such a horribly complex issue. That is a whole topic that your politicians do not want to acknowledge, and do not want you to think it about. I believe Barrett said that climate policy is the most complex policy issue he has encountered.

[3] In the Q&A Bryan Caplan outlines what he thinks is the Obama cap-and-trade strategy. As in the 2008 campaign Obama will continue to tell voters “he won’t sign a bill that raises consumer prices a dime”. Instead “those polluting industries will bear the cost” of saving the planet. Caplan speculates that Obama knows this defies logic and is economically impossible – but that he can hide the cost by bad policies which reduce economic growth from the natural 3% rate to say 1.5% – the difference being the deadweight costs, the increased energy costs and rents paid to regulators, lawyers and special interests.

1.5%, not such a big difference is there? Well, given 3% compound growth over 100 years, then your descendants will be about 20 times richer than today. But only about 4 times richer for the 1.5% growth case. Heck it’s only a wealth factor of 5.

I think Caplan may be on to a profound concept of what is going on in Washington – where no Democratic options have any associated costs or risks (costs are for the Republican proposals). However, I don’t accept the Caplan assumption of “say 1.5% less growth”. Could be, but nobody knows what will happen in five years, much less 100. That is why a flexible, adaptive climate policy is what we need. My point is simply that it may be possible to use such devices as cap-and-trade to conceal the actual costs inside of lower growth. Secondly that very small differences in compound growth rates account for the difference between e.g., Ghana and South Korea.

Climate policy is of course not Prof. Kaplan’s area, so I do not fault him for viewing geoengineering as being an either/or policy choice – which given the evidence presented at the meeting, makes geoengineering look like the right horse to back if you were picking just one. E.g., he doesn’t appreciate that none of the “thermostat” geoengineering proposals would have any effect on ocean acidification. Kaplan wrote a brief summary of his contribution to the AEI conference here. Excerpt on the hidden cost strategy:

5. But won’t people also fervently resist extremely costly solutions for global warming? It depends. If the cost is visible and noticeably reduces living standards, then popular opposition might well be intense. But smart politicians can get around this problem by obscuring the cost (imposing emissions regulations rather than carbon taxes, for example), and making sure that the costs come in the form of lower growth rather than absolute declines in living standards.

AEI has a brief summary of the discussion here.

Lee Lane, a resident fellow at AEI, moderated the discussion. He observed that, although the concept of geoengineering has existed for quite some time, until recently, it has been only a marginal factor in the climate policy debate. He also noted, however, that the idea is quickly gaining traction. Lane cited a number of influential organizations and individuals that have advocated further research on the subject. Because of the low costs associated with geoengineering, one nation, or a small group of nations, could change the global climate. This prospect has sparked both hopes and fears.

Scott Barrett of Johns Hopkins University, and author of the working paper, “Geoengineering’s Role in Climate Change Policy,” described climate engineering as one option in a diverse portfolio of potential responses to climate change. Globally, over the next several decades, gradual climate change will produce both winners and losers, and nations’ responses to these changes will vary according to their interests. The potential conflicts of interest are likely to narrow over time, but nations may wish to consider an agreement to govern the development and use of geoengineering. He also drew attention to the lack of rules currently in place to govern these actions.

Barrett discussed some options for developing international rules. He noted that the world politics of climate engineering differ greatly from those of greenhouse gas control. The former escapes the free-rider problems that have dogged the latter, but nations continue to have differing preferences over how to deal with the climate. Barrett proposed the Framework Convention on Climate Change as a forum for bargaining on these differences. Crucial components of an agreement might include rules governing deployment, as well as provisions making research and development transparent and providing notification of field experiments to other countries.

Nobel laureate Thomas C. Schelling, professor emeritus of the University of Maryland, responded by observing that we know very little about organizing the myriad actors and resources needed to cope with the problem of climate change. Adaptation will be an important part of a climate change portfolio, but Schelling cautioned that we do not yet know how to effectively transfer the necessary resources from richer nations to poorer ones. Until we develop a better framework for doing so, actions meant to shield less developed tropical countries from the climate change that has already been set in motion by past emissions will largely be fruitless. Attempts to enforce emissions commitments across borders are unlikely to work, he observed, and “therefore commitments should be to what nations will do, not what their effect on emissions will be.” One important advantage of geoengineering is that it does not involve drastically changing the way billions of people live and care for themselves on a daily basis. “The experimentation process,” he continued, “will provide insight into how geoengineering might actually be carried out,” and therefore should be a serious factor in discussions of geoengineering governance.

Bryan D. Caplan of George Mason University argued that nations may act on climate in ways that diverge from their own economic best interests. Caplan cited protectionist trade policies as one of many instances in which national behavior often contradicts national interest. He also addressed the concerns that certain powerful countries will be net losers should geoengineering be undertaken: if states are net losers under a relatively cheap geoengineering scheme, he countered, they will likely be even greater losers under far more costly climate change measures. More focus, he said, “should be placed on how much we could save with geoengineering.” If we can determine that geoengineering options would be both effective and less costly than other alternatives, it might be prudent to devote a greater portion of our resources to these strategies.

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