1. I think he had two main points, the first being that policymakers can’t decide what to do about climate change on the basis of climate science alone. This is an excellent point, but: No duh.
2. His second main point was that reducing carbon emissions (say by 20% by 2020) is going to be incredibly difficult. This is also an excellent point, and is somewhat less “no duh” than the first point. Also, Roger gets extra bonus points for having excellent specifics, e.g., that reducing emissions 20% by 2020 in the UK would require the equivalent of adding 40 nuclear power plants by 2020.
3. I was struck by how much of his talk (especially addressing the 2nd point) matched what someone from the Sierra Club would say. What Roger said was “reducing carbon emissions 20% by 2020 is going to be a huge challenge, and we’re not going to make it.” What a Sierra Club person would say is “reducing carbon emissions 20% by 2020 is going to be a huge challenge, so we need to start now.”
4. One other difference between what Roger said and what a Sierra Club person would say is that the Sierra Club person would have talked about the impacts of climate change under business as usual. In contrast, Roger said nothing about the impacts of climate change (under business as usual or anything other scenario).
5. As an economist, I found Roger’s lack of discussion of climate impacts to be extremely disturbing. If—totally hypothetically—the science said that hitting 450ppm would cause the planet to explode, I’m pretty sure Roger’s talk would have looked different. (At least I hope so!) The economic point here is that cost-benefit analysis has two halves—costs and benefits—and you can’t do it by just talking about one of the two halves. Why Roger failed to talk about both halves has me totally perplexed and leaves me questioning how much he actually knows about economics. (For the record, he’s not an economist, so I think this is a legitimate question, not an insulting one. He’s a political scientist, but his talk was not about the intersection of science and politics; his talk was fundamentally about economics.)
6. Also perplexing to me is that Roger didn’t even mention (positively or negatively) the IPCC or the scientific consensus about carbon emissions leading to higher global temperatures &etc. This was an important omissions because I would guess that a significant fraction of the audience he spoke to today probably doubts the IPCC conclusion about human activity affecting global temperatures, and if Roger does believe the IPCC (as his Wikipedia page suggests) then he should have come out and said it. He failed to do so even though it would have taken only 30 seconds, and in my opinion that failure is inexcusable for someone whose goal is to educate.
7. Roger spent a great deal of time focusing on carbon emissions per unit of GDP, a variable that economists don’t usually have much interest in. After listening to Roger’s talk I still don’t have much interest in that variable in terms of either economics or policy, but I do appreciate how it allows him to tell a story about hard it is to reduce emissions: “Here’s the fastest that anybody’s ever been able to reduce emissions per unit of GDP, and reducing total emissions 20% by 2020 will require us to reduce faster than that. Wow that’s going to be hard!”
8. The hypothetical above about the planet exploding if we hit 450ppm makes it clear by Roger’s story is incomplete from an economics perspective. An analogy will help explain other limitations of his approach: Let’s say we’re talking about global populations of tuna, and that scientists are telling us that tuna are being caught at an unsustainable rate and that we need to cut the number of tuna we catch by 20% by 2020 in order to maintain a stable tuna population. Then Roger comes over and tells us that what we really ought to be looking at is not the number of tuna being caught every year but the consumption of tuna per capita in different countries around the world. Then Roger shows us graphs about rising populations in the developing world and the rising consumption of tuna per capita all over the world and tells us how difficult it will be to reverse this trend: how many more chickens we’d need to raise, etc. Finally, Roger comes to the seemingly inescapable conclusion that the number of tuna being caught every year is going to keep on rising. Anybody with half a brain can see that there is something missing from this story: What happens if there are biological limits to how many tuna we can catch? Anybody with a full brain should see that this analogy casts doubts on the value of Roger’s approach to climate change: What happens if there are physical limits in terms of the quantity of fossil fuels we can consume? What happens if there are biogeochemical limits in terms of the quantity of fossil fuels we can consume before blowing up the planet? This is not the time to pass judgment on these questions—for myself, I worry about the second question but not the first one—but it is the time to be concerned about the fact that these kinds of questions don’t even come up in Roger’s analysis.
9. Roger’s proposal for dealing with climate change is to have a small carbon tax (on the order of $1 per barrel of oil, which amounts to about $2.50 per ton CO2 or $0.025 per gallon of gasoline) with the revenue going to clean energy R&D. One point worth making here is that this is not a new idea; it goes all the way back to Thomas Schelling’s presidential address to the American Economic Association (”Some economics of global warming“) in 1992. Of course, a point doesn’t have to be novel to be worthwhile (otherwise those of us promoting revenue-neutral carbon taxes would have shut up long ago!) but Roger could have done more to provide context and perhaps to explain why this idea has had such difficulty in gaining traction over the past twenty years. Again, introducing this important idea would have taken only 30 seconds.
10. A deeper point about Roger’s proposal (which is in line with the folks at Breakthrough Institute, where he was a senior fellow) is that it is deeply government-focused: We’re going to have a carbon tax to fund government programs in clean energy R&D, and those government programs are going to move us in the directions we need to go on climate. This is very different than the usual prescription from economists, who tend to focus on providing incentives for private companies to do R&D. I’m not saying Roger is wrong, but I do think that it’s a surprisingly big-government idea to advocate in front of a room full of folks devoted to “free-market solutions“. The fact that Roger didn’t get any push-back (at least not during the part of the Q&A that I could stick around for) indicates to me that at a fundamental level he was failing to connect to the audience.

2. Right now most conservatives don’t much care about climate change, but some of them do care. These include local folks like Todd Myers and national folks like Greg Mankiw, David Frum, and many more.

3. The number of climate-conscious conservatives is likely to grow. Some conservatives are undoubtedly creationist-minded lost causes (just like some progressives are Marxist-minded lost causes :), but there are plenty who just have an extra-healthy dose of skepticism; if IPCC predictions continue to be validated by reality, that skepticism will wane over the course of this decade.

4. The environmental community should do everything in its power to boost the ranks of climate-conscious conservatives. This is because being a one-party issue is not a good way to make change happen (see gay rights, the religious right, etc.) and because conservatives are not going away (see #1 above). A year ago climate blogger Joseph Romm wrote that “the country can only contemplate serious environmental legislation when we have the unique constellation of a Democratic president and [large] Democratic majorities in both houses, an occurrence far rarer than a total eclipse of the sun.” Yesterday Romm wrote that “it’s clear we’re not going to get an economy-wide cap and trade bill.” Maintaining this state of affairs is bad bad bad, and although it may be a while until climate-conscious conservatives become a significant force it is entirely possible that serious climate legislation (like BC’s carbon tax) will have to wait until it does.

5. The best way to boost the ranks of climate-conscious conservatives is to take conservative concerns and preferences seriously. This includes the concerns and preferences of the relatively small group of already-green conservatives, but also those of potential converts.

6. Many of those concerns are about the growth of government, and many of those preferences are for revenue-neutral carbon taxes. In fact, some Republicans feel so strongly about public finance issues that they support revenue-neutral carbon taxes even though they don’t care about climate change. (George Will came to one of my classes this last year, and after explaining why he thought global warming was a hoax he told us that he hated the payroll tax and therefore he supported replacing the payroll tax with a carbon tax, or indeed with a “yogurt tax”; I asked him if he knew that Al Gore agreed with him and he said that an idea should not be held responsible for the people who believe in it :)

7. These conservative concerns and preferences are different from progressive concerns and preferences. In the unlikely event that you’d like proof, consider that Todd Myers of the free-market Washington Policy Center says that the Washington State Democrats refused to allow them to submit (and pay for!) this ad in their convention newsletter.

8. In order to take conservative concerns and preferences seriously, the environmental community needs to differentiate itself from the progressive community.

9. This is difficult because many environmentalists are also progressives. Concern about climate change is not just an excuse for expanding government, but there’s a good reason conservatives worry that it is.

10. The way forward is for the environmental community to reach out to conservatives. Yes there is mutual mistrust, but the onus is on the environmental community because enviros needs conservatives more than conservatives need enviros. Yes these efforts might not yield dividends for 5-10 years, but the time to start is now. Yes it is distressingly possible that revenue-neutral tax shifts will not poll well right now (among conservatives or among progressives!), but exploring those options is a way to demonstrate goodwill and to show that the environmental community is taking conservative concerns and preferences seriously.

The bottom line is that there is a huge difference between (1) trying to find common ground and failing, and (2) moving in other directions without even looking for common ground. Failing to look for common ground will simply lead to more mutual hostility and delay the growth of climate-conscious conservatism. In contrast, looking for common ground and failing will allow environmentalists to honestly and respectfully engage with conservatives (”we tried finding common ground, but the polling came back negative, and that’s why we’re pushing progressive ideas xyz that you don’t like”) and both groups will be better positioned to try again down the road. And of course there’s always a chance—somehow, someday… maybe even today!—that (3) trying to find common ground will succeed.

Start with the possible window of opportunity, which depends on the outcomes of three events:

1. The fate of federal climate legislation. The House has already passed a climate bill, but the Senate is stuck, and the conventional wisdom is that we’ll get an energy bill but not a climate bill. Different folks in the climate world have different opinions about federal action (my opinion is here), but everyone should be thinking about a Plan B in case federal action doesn’t happen. And in that context it’s especially important to consider…
2. The fate of the Congressional elections in November. Everyone seems to think the Republicans will pick up seats, with a decent probability of taking over the House and a smaller (but nonzero) probability of taking over the Senate too. Given the Republican tendency to oppose climate action in general and “cap-and-tax” in particular, the federal dynamics are likely to change significantly in 2011, with a strong likelihood of no action and an increasing interest in alternatives to cap-and-trade. Those alternatives may become even more important in light of…
3. The fate of the AB32 roll-back measure in California. In 2006 California passed the Global Warming Solutions Act (AB32), a measure that (among other things) requires the state to launch a carbon cap-and-trade system by 2012. This November, voters in California will be faced with a ballot measure—the California Jobs Initiative—seeking to suspend that effort indefinitely. I have not seen any strong polling about the odds of success for this measure, but if it does succeed in suspending AB32 then it will likely be the final nail in the coffin of the Western Climate Initiative, a regional cap-and-trade system that is already reckoned to be on life support.

In my view the odds are (1) that federal climate legislation will not pass this year, (2) that the Republicans will make significant gains in November, and —I’m going to waffle on this last one—(3) that the California ballot measure has a good chance of rolling back AB32. If I am right on all three, or even just on the first two, then it will be time for new directions in U.S. climate policy. Not a new direction, but new directions, because significant action on climate policy for at least two years is likely to happen not at the federal level but at the state level, in the much-touted “laboratories of democracy”.

In the event that U.S. climate policy moves in new directions, I am excited about the prospects for state-level carbon taxes. These can be implemented in any state, but I am especially keen about the chances for this policy on the West Coast.

One big reason is that we already have a neighborhood example: the province of British Columbia implemented a carbon tax in 2008, and in 2012 it will reach approximately $30 per ton of CO2. (That’s about $0.30 per gallon of gasoline or $0.03 per kWh of coal-fired power.) That’s living proof that carbon taxes can establish economic incentives to reduce emissions without destroying the local economy. It’s also living proof that politicians can push carbon taxes and still get (re)elected.

A second reason is that the West Coast has green-minded voters—there’s a reason Dave Reichert (R-WA) and Mary Bono Mack (R-CA) were 2 of only 8 Republicans in the House of Representatives to vote for the cap-and-trade bill that passed the House last summer—and innovative leaders in the business and non-profit communities who support well-designed carbon tax policies. These include the usual suspects in the environmental world (including Sightline Institute, with whom I worked on this memo on carbon pricing in Washington State), but also folks like Todd Myers, the environmental director of the free-market Washington Policy Center and the co-author of this 2009 op-ed calling for a revenue-neutral carbon tax of $30 or perhaps even $50 per ton CO2; and companies like Puget Sound Energy, whose 2008 WCI comments included a statement to “reaffirm [their] support for a carbon tax program,” a position recently repeated by CEO Steve Reynolds. (I have also been told privately by other major business leaders that they think a carbon tax is a good idea, and PS my examples above mostly come from Washington State but I’m confident that similar examples can be found in Oregon and California.)

A third reason is that we have ballot measures on the West Coast. In parallel with #1 above, state legislatures appear unwilling to tackle climate pricing—California is the exception here, but other states have repeatedly failed to lend legislative support to the Western Climate Initiative—and in parallel with #2 above, state legislatures are likely to see the same right-leaning dynamics that are projected at the federal level. An initiative campaign could go directly to the voters with a proposal to implement a BC-style carbon tax and use most if not all of the proceeds to reduce existing taxes.

And that brings us to the fourth and final reason for favoring the West Coast as a focal point for carbon tax action: State tax systems in the area are ripe for reform. A revenue-neutral carbon tax would appeal not only to green-minded voters but also to those who are fed up with the current tax system and want significant reductions in property taxes, income taxes, and business taxes. (Admittedly, this fourth reason applies to just about all states, and as noted before carbon taxes can be implemented in any state.)

My dream scenario would be a group of coordinated ballot measures in West Coast states in 2011 or 2012, leading to a regional carbon tax comparable to the RGGI cap-and-trade system on the East Coast. (These policies could then engage in a mostly friendly face-off if and when federal climate leadership returns.) As a first step towards this dream, how about making some progress in exploring new directions so we’ll be ready in case the window of opportunity opens?

So what I end up with is basically Martin Weitzman’s argument: it’s the nonnegligible probability of utter disaster that should dominate our policy analysis. And that argues for aggressive moves to curb emissions, soon.

At the heart of the economics of climate change are issues of uncertainty and discounting, and IMHO neither of them can be resolved. (Translation: Cost-benefit analysis is never going to give us a solid answer.) For example, Weitzman’s uncertainty issue is IMHO fundamentally related to the St Petersburg paradox: How much would you pay to play a game in which you flip a coin until it comes up heads and then (if this happens after n flips) you win $2^n ($2 for H, $4 for TH, $8 for TTH, $16 for TTTH, etc). It’s easy to show that the expected value here is infinite, meaning that there’s a logical argument to be made for paying $1 million—or even much, much more—to play this game. Similarly there’s an argument to be made for paying $1 million to avoid being on the opposite side of the game (i.e., having to pay $2 for H, $4 for TH, $8 for TTH, $16 for TTTH, etc). The problem is that this doesn’t seem terribly reasonable, so climate-related discussions based on similar low-probability/high-risk outcomes are IMHO not going to produce an intellectually satisfying resolution.

A carbon tariff would be a tax levied on imported goods proportional to the carbon emitted in the manufacture of those goods.

Wow, this is going to be really hard to calculate.

We’re not talking about a few more hot days in the summer and a bit less snow in the winter; we’re talking about massively disruptive events, like the transformation of the Southwestern United States into a permanent dust bowl over the next few decades.

I confess that I’m not aware of this research, and at times Krugman is a little too alarmist for my taste. (There’s a ton of uncertainty about how much temperatures will rise under business-as-usual and how bad this would be for human society.)

The simplest version of a Pigovian tax is an effluent fee: anyone who dumps pollutants into a river, or emits them into the air, must pay a sum proportional to the amount dumped…. Even today, Pigovian taxes as originally envisaged are relatively rare. The most successful example I’ve been able to find is a Dutch tax on discharges of water containing organic materials.

For some reason Krugman fails to mention the best idea in the world: revenue-neutral tax shifting, which involves increasing taxes on carbon and decreasing taxes on payroll, income, etc. (The basic economic idea—supported by economists of all political stripe, as evidenced by Greg Mankiw’s Pigou Club—is to have higher taxes on things we want less of and lower taxes on things we want more of.)

PS. There’s a successful implementation of a revenue-neutral carbon tax in British Columbia that deserves much more attention. (Part of what I do in my comedy life is tour the world and try to get folks interested in adopting similar policies; last night I was in Birmingham and presented the outlines of a proposal for Alabama.)

There is probably an atmospheric data set we could agree on…

Great, Ross, what is it? The hallmark of science is testable predictions, so give me a data set and make a prediction about it. How about the satellite data from Roy Spencer and John Christy? Roy Spencer ever provides a handy prediction (made in late 2008):

If the PDO [Pacific Decadal Oscillation] has recently entered into a new, negative phase, then we can expect that global average temperatures, which haven’t risen for at least seven years now, could actually start to fall in the coming years. The recovery of Arctic sea ice now underway might be an early sign that this is indeed happening. The next few years of satellite data might provide some very interesting insights into whether the Pacific Decadal Oscillation is indeed a major force in climate change.

Are you willing to make this same prediction? And if the PDO (which Spencer calls his “favorite candidate” for a non-anthropogenic natural cause for global warming) does stay in a negative phase and temperatures nonetheless rise as predicted by the IPCC, are you going to admit that you were wrong? Or are you going to continue to avoid making any testable predictions?

Please tell me you like this data set (or can provide me with another one) and that you like Spencer’s prediction (or can provide me with another one). Otherwise I’m going to lump you in with the “birthers and truthers“.

PS. The issue above is what I want to focus on, but let’s take a quick look at one of the nine pieces of evidence that you use to back up your claim that “the collapse of the global warming paradigm is… happening daily”: India withdraws from the IPCC, an article dated Friday Feb 5 2010. There’s only one problem with this piece of evidence: It’s not true. The headline indeed says “India quitting IPCC”, but the body of the article doesn’t really support that statement. And this Feb 9 Wall Street Journal piece says that “Prime Minister Manmohan Singh expressed support for the United Nations’ Intergovernmental Panel on Climate Change and its leader, Rajendra Pachauri, at a local energy conference in New Delhi Friday”. (Don’t believe the WSJ? Watch the video yourself.) Now, let’s see if you’re honest enough to admit that you were wrong in claiming that India withdrew from the IPCC. Or maybe you’d like to bet $100 (or $1,000?) that on January 1 2011 India will still be listed as a member of the IPCC? (See here, linked from here. )

In my original post I accused libertarians of promoting the “Three No’s”:

1. No recognition that climate change is a theoretical possibility. I am happy to say that we’ve made progress on this: Rossputin and the Taylor boys all acknowledge that it is at least possible that something like carbon emissions could be a problem. This is terrific.
2. No peace with the IPCC. With the possible exception of Cato’s Jerry Taylor, we have made no progress here. Two years ago libertarian folks were writing about the “impending collapse of the global warming paradigm”, and today the “impending collapse of the global warming paradigm” is —guess what?—still impending. Libertarians used to mock environmentalists for making claims of impending collapse (that we’re running out of food, oil, minerals, etc.) that didn’t pan out; Julian Simon was a master of this, and I admire him for it. But now you’re making the same mistake yourselves, and you deserve to be mocked for it, starting with Julian Simon, who wrote “My guess is that global warming is likely to be simply another transient concern, barely worthy of consideration ten years from now.” He wrote that in 1994. Give it up already! You already agree that climate change is a theoretical possibility (see point #1 above), so it’s not that hard to go from there to accepting the scientific evidence. Speaking of the scientific evidence…
3. No negotiation about climate change science, i.e., no serious scientific engagement. Here I am sorry to say that we’ve made negative progress. My fear—see my questions below—is that ClimateGate and GlacierGate &etc have eliminated the possibility of reaching agreement simply because we can no longer agree on a data set that will tell us, e.g., about global temperatures. I see ClimateGate mostly as an administrative issue—people who ask others to delete emails to avoid FOIA requests should not be in positions of authority—but I cannot stop others from interpreting it as evidence of “a conspiracy to limit population not only in this country but across the globe.”

So here are my questions, and I’m going to limit myself to one for each of my libertarian friends (but of course you’re free to opine on whatever you want):

• For Jerry Taylor of the Cato Institute: To what extent (if at all) have you changed your views since you wrote the following during our last go-round two years ago?
  

  “I actually agree with almost all of [Yoram's original post]… While I don’t pretend to speak for libertarians in general, I think an honest examination of the libertarian community would find that the beliefs Mr. Bauman is attacking are not as widely spread as he thinks. For instance, Prof. Pat Michaels – a senior fellow here at Cato who holds a PhD in climatology and who is widely published in the scientific literature on this matter – agrees that anthropogenic emissions are the main driver behind the warming trend of the past several decades. Moreover, he thinks the IPCC reports are fairly reasonable (albeit not perfect) summaries of the scientific literature (which maybe shouldn’t surprise – he is a member of the IPCC). He believes, however, that future warming will be at the lower end of the IPCC forecasts and that the economic costs will prove modest given the distribution of that warming.”

• For Rossputin: Is there a data set that we can agree on? Presumably not the Hadley Centre one (although my understanding is that you skeptics were for it before you were against it), but how about NASA (from their graphs page), or NOAA (from their annual State of the Climate report), or… you tell me! The hallmark of science is refutable implications, but we can’t get there unless we can agree on a data set to refute predictions. I’m on board with the IPCC, which predicts global average temperature increases of 0.2 C (0.36 F) for the next few decades. My untrained eye says that they’re doing pretty good so far, so well in fact that IMHO they’ve earned the benefit of the doubt; but if global temperatures rise by less (or more!) than they predicted then I’m going to reconsider. My question for you is whether you believe any of these graphs. If you do then let me know which one and what it tells you and what kind of changes will convince you that you’re wrong about global warming being a “hoax”. And if you don’t believe any of these graphs then then all I can do is encourage you to put a thermometer outside your house and start taking temperature readings :)
• For James Taylor of the Heartland Institute: What changes would you make to this draft PPT of an “introduction to climate science” lecture that I’ll be presenting to my ENVIR 100 students at UW next fall? I’ll take your suggestions seriously, and FYI here’s a smaller PDF version.

PS. Am I still invited for Thanksgiving dinner at the Taylor family compound? I might be on comedy/book tour this fall (promoting my fabulous cartoon economics book; see here for an excerpt on carbon pricing) and Thanksgiving would be fun (especially if your compound is in Hawaii, which is where my girlfriend wants to spend Tgiving this year :).

PPS. Let me repeat something I said 2 years ago:

Listen up, my libertarian friends. You have a lot to contribute to the climate change discussion, in particular by emphasizing the superiority of markets and market mechanisms over the inefficient and often ineffective command-and-control policies that are beloved by lefties. But first you need to take a seat at the table instead of taking pot-shots at something that economists know is theoretically possible and that the scientific consensus says is “very likely”.

We still need you at the table. Check out this this op-ed calling for a revenue-neutral carbon tax co-authored by Todd Myers of the free-market Washington Policy Center here in Seattle; I’d bet that you think it’s a good idea just on the grounds of national security! Imagine how much more likely this kind of revenue-neutral tax reform would be if you put your weight behind it.

Instead we have a GOP “purity test” (”We support market-based energy reforms by opposing cap-and-trade legislation”) that demonstrates a complete failure to understand that the way market-based instruments reduce pollution is by making pollution expensive. I half-expect lefties to live in a la-la-land where we get to taste the honey without the sting of the bee (check out this video that manages to talk about cap-and-trade for 6 minutes without mentioning that the price of fossil fuels will go up) , but the right wing is supposed to understand how markets work and right now it’s lost.