Saturday, April 19, 2008

Time on the "War on Global Warming"

Interesting article. The opening paragraph sets up the debate nicely - you can guess what comes next.

How to Win the War on Global Warming [Time]

Americans don't like to lose wars—which makes sense, since we have so little practice with it. Of course, a lot depends on how you define just what a war is. There are shooting wars—the kind that test our mettle and our patriotism and our resourcefulness and our courage—and those are the kind at which we excel. But other struggles test those qualities too. What else was the Great Depression or the space race or the construction of the railroads or the eradication of polio but a massive, often frightening challenge that we decided as a culture we ought to rise up and face? If we indulge in a bit of chest-thumping and flag-waving when the job is done, well, we earned it.


The U.S. produces nearly a quarter of the world's greenhouse gases each year and has stubbornly made it clear that it doesn't intend to do a whole lot about it. Although 174 nations ratified the admittedly flawed Kyoto accords to reduce carbon levels, the U.S. walked away from them. While even developing China has boosted its mileage standards to 35�m.p.g., the U.S. remains the land of the Hummer.

"Cap-and-trade" is clearly the centre piece of the current US proposal:

The most important part of a blueprint to contain climate change is to put a charge on carbon emissions. As long as the sky is free, renewable energy will never beat fossil fuels. But put a price on carbon, and suddenly the alternatives look a lot better. The most feasible way to do this is through a cap-and-trade system that sets ceilings for carbon output and lets companies that come in under the limit sell credits to those that don't, allowing them to keep polluting—a little. The effect is that overall carbon levels fall, and there is even money to be made by being greener than the next guy. That drives investment and research dollars into renewable energy and efficiency. "Cap and trade changes everything," says Krupp.

So what is the problem? That of course is the lobbying power of manufacturing. Despite evidence that environmental regulations have had little impact on jobs (including a paper of mine) it is no surprise to read:

The principal rap against cap-and-trade proposals is that they would be a drag on the economy. A new study by the National Association of Manufacturers, an industry trade group, estimates that Lieberman-Warner would cost the U.S. up to 4million jobs by 2030 while eroding gdp by up to $669 billion per year. "The environmental community would have you believe that you can make these changes and not only will there not be negative consequences, there'll be positive consequences," says Republican Representative Joe Barton, ranking minority member of the House Committee on Energy and Commerce.

4 million jobs is a large absolute number however small relative to total US employment. However, linking to a Porter type argument we get:

Nationwide, the American Solar Energy Society estimates, there are already 8.5million jobs in the clean-tech sector, which it projects could grow to 40million by 2030 with the right policies.

More than offsetting any loss and what drives some of the academic US studies in the economics literature.

The article concludes:

If we took all the steps outlined here—a national cap-and-trade system with teeth, coupled with tougher energy-efficiency mandates and significant new public and private investment in green technologies—where would that get us? We'd be a little poorer—a sustained battle against climate change will hit our wallets hard, absorbing perhaps 2% to 3% of gdp a year for some time, according to energy expert Henry Lee at Harvard's Kennedy School of Government, though unchecked warming could end global prosperity. But think of it as an investment: that money, if matched by action internationally, can reduce emissions radically over the next half-century, contain warming and lead us to a postcarbon world.

Ultimately, global warming is not a battle that will be fought fiscal year by fiscal year; it's a fight that will occupy us for generations. Our policies have to operate on the same time frame, even if our politics run on election cycles. We've learned from think tanks and war colleges that the outcome of any crisis is usually determined by one dominant global player that has the innovators who can churn out the technology, the financiers who can back it and the diplomatic clout to pull the rest of the planet along. That player, of course, exists, and it is, of course, us. The U.S. has enjoyed an awfully good run since the middle of the 20th century, a sudden ascendancy that no nation before or since has matched. We could give it up in the early years of the 21st, or we could recognize—as we have before—when a leader is needed and step into that breach ourselves. Going green: What could be redder, whiter and bluer than that?

Overall, this is a well written and balanced piece that covers all the main issues facing the war on global warming from a US (and ultimately world) perspective.


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