“Rigidifying” Climate Policy

In her book, March of Folly, the late historian Barbara Tuchman coined the terms “mental standstill” and “rigidifying” to describe a state  “where principles … governing a problem are fixed and then made rigid when dissonances and failing begin to appear.  This is the period when … rethinking, and change of course are possible”.  Instead, “rigidifying leads to (the) need to protect egos; policy founded upon error multiplies, never retreats.  Persistence in error is the problem”

Climate policy reflects a state of rigidifying.  Environmentalists, business rent-seekers, some in Congress and the President continue to promote cap and trade to reduce US emissions.  Some economists in response support a carbon tax with the revenue recycled to offset elimination of a more distorting tax—e.g. payroll tax as being more efficient.  If those are the only two choices, a carbon tax is clearly preferable.  But, those are not the only options.

Although the climate debate continues unabated, the carbon situation in the US should make it irrelevant.  EIA in its latest Annual Energy Outlook estimates that by 2035, energy related CO2 emissions will be below the 2005 emission level.  All of this without  a commitment to a global treaty or Congressional legislation to ration carbon.  The EIA estimates reinforce the conclusion in a forth coming George C. Marshall Institute paper on changes in the fuel mix for power generation.  That paper documents a long term steady decline in carbon intensity over at least the past 50 years.

How did this happen without the guiding hand of a government mandate?  EIA attributes it primarily to slower economic growth, energy efficiency improvements, subsidies for renewables, and increased use of natural gas. And, of course, regulation has played a role.  The Marshall paper concludes that the major drivers were differences in relative prices, technology, and the substitution of natural gas for coal.

The debate over the role of human activities in climate change is nowhere near resolution.  Although there is no dispute that human activities—e.g. land use changes –affect climate, there is no compelling scientific evidence that human activities are the major contributor.  Such conclusions come from models that mainly reflect assumptions about how the climate system works and what factors cause change.  In the models, it is primarily CO2 but that is a gross over simplification.

While the US carbon trend should be seen as encouraging, there is a larger concern about the level of global emissions and about the long term effects of changing the chemical composition of the atmosphere.

Global emissions are projected to continue to grow because of economic growth in countries like China, India, Brazil and other developing countries, probably by 50% or more by 2035.  In addition, there are almost 1.6 billion people who have no access to commercial energy and live in devastating poverty.  They seek a better life and standard of living and that means consuming fossil energy.  Constraints on access to energy would condemn them to continued high disease and mortality rates.

If policy makers take a long view of the emissions issue there is a potential win-win situation.  The focus of US efforts should shift from efforts to constrain energy use by making it more costly either directly or indirectly to helping to create conditions that would enable developing countries to have greater access to our energy technologies and achieve greater capacity to use them.  A proactive trade policy would promote greater energy technology exports would have a positive economic benefit domestically and could strengthen relations with trading partners.

One additional thing should be clear.  A goal of reducing global emissions by 50% or more over the next several decades borders on being delusional and would represent economic suicide.  If climate changes, for whatever reasons, we would be better off, as would other nations, by investing in adaptation strategies.

As Abraham Lincoln famously said, as the times are new, we must think anew.

Originally published by the Houston Chronicle at http://fuelfix.com/blog/2012/10/01/“rigidifying”-climate-policy/

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