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My former professor from graduate school is coming to U of R tomorrow:

Speaker to Address Carbon Emission Reduction
“Robert Frank, the H.J. Louis Professor of Management and professor of economics at Cornell, will present “Reducing Carbon Emissions Will Be Easier Than Many People Think” at 5 p.m. Tuesday, April 7, in Morey Hall, Room 321. A reception will follow.”

Now, I am pretty sure that given the available research, there are going to be continued benefits from reducing our reliance on carbon, and that these benefits are almost exclusively going to be on the health side of things, as the combustion of carbon-based fuels is still, at this time, not an extremely clean process (think particulate pollution). Whatever climate benefits may come from reducing CO2 (which by the way is not the same as reducing global warming) would pale in comparison. My prediction is that if we do get CO2 reductions in the future, they will produce net health benefits, and that the carbon activists will claim “victory” because the reduction of carbon passes a benefit cost test on the grounds that our health is improved – meanwhile the way the carbon reductions get passed is through their impact on global warming.

In any case, note the title of the talk from Professor Frank – it sort of assumes the conclusion, no? Ignoring that, I suppose one would want to distinguish between reducing carbon emissions and then what the transitions to other energy sources would entail. I won’t bore you with a lot of calculations right now, but suffice it to say that it is an hilariously unlikely thing to expect us to be able to transition any significant portion of our power grid in the US to “clean” sources in the next 40 years.

While I am on the topic, note that when we talk about “optimal” carbon taxes, or how much carbon to reduce, we are making pretty gross assumptions that the level of carbon emitted today is not already optimal. In other words, when we write down that the “external costs of carbon” are ___, and that we should therefore set a tax equal to these external costs, then we have to first ask the question, “how much are we taxing or otherwise regulating carbon already?”

Please show me a single article by someone who is talking about global warming policy that asks this question? For example, we have very large taxes on gasoline at both the state and federal level in the US (I can’t show you these amounts and how close they come to the measured “social cost of carbon” because my students have become accustomed to googling my website for answers to problem set questions). Furthermore, beyond the taxes already imposed on fossil fuels (and there are plenty), have we stopped to ask just how much current regulations already restrict the output of carbon based fuels? For example, we have banned fracking in New York State. In other words, NO fracked gas is coming out of the ground. This is more than a 100% tax, and there is no question that since the NET benefits of drilling for and burning natural gas are positive, an outright ban reduces social welfare. Do we permit drilling in the ANWR? How much oil is not coming out of the ground there that would have come out otherwise? And how does this compare to how much less oil would be drilled in the US were we to first institute a carbon tax? And what does the current tax and regulatory climate do to how much companies are already investing in oil and other fossil fuel exploration? It is not at all entirely clear that we are not producing “too little” fossil fuels. However, that is really not what is on the mind of folks when they talk about the problems with fossil fuels – it’s not about “optimal” policy at all, else these questions would be on the table.

Note that James Hansen is coming to campus in a couple of weeks.

UPDATE: Matthew Yglesias, while reflecting on parenthood, delivers this one: “but only the federal government can make electrical utilities spew less mercury into the atmosphere.” Of course, that depends on what we mean by the word “Make.” I am very interested in starting an electrical utility that burns natural gas to generate electricity. Such combustion does not emit any mercury into the atmosphere. So, would we conclude by the logic above that “only” the federal government can “make” electric utilities spew less mercury? Hardly. Of course, there are not well defined property rights to the air, and given that the price of mercury is not well established, it would seem Yglesias’ logic is sound. On the other hand, it is the very federal government that does not step in to stop states from banning fracking, and it is quite clear that if you ban fracking you are going to endorse coal burning, which produces mercury. So can I then logically say that only the federal government can MAKE utilities spew more mercury? I don’t think either claim is accurate, but it sure does make people feel good to read one or the other.

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