Debating Global Warming Policy

The conversation of what to do about global warming is winding down over at Cato Unbound. I've found the discussion fascinating, and I learned a lot. I'd like to see a lot more discussions like this one about climate change policy, and I hope we set a decent example. There were some mildly raised voices, sure. But there's also been a whole lot of data and scientific and economic reasoning exchanged. I guarantee that if you read through all the essays and replies, you'll learn something.

Eat Local, Yokel

My Marketplace commentary this morning briefly discusses “food miles” and the “eat local” movement.

One commenter writes, “Eating locally and seasonally keeps more of the food dollar in the local economy.” But it is not the comparative advantage of some localities to grow anything. In that case, refusal to trade beyond local bounds will leave the local economy poorer. That is, you'll succeed in keeping food dollars in the local economy only at the price of fewer total dollars for food and everything else. Please read Paul Krugman and Art Carden.

The study I mention “out of Carnegie Mellon University” is “Food-Miles and the Relative Climate Impacts of Food Choices in the United States” by  Christopher L. Weber and H. Scott Matthews.

It's pretty mysterious to me why the miles traveled by food in particular is thought to matter more than, say, the miles traveled by my Chinese laptop. Rootedness? Purity? How are your laptop miles, America?

Should we minimize our “music miles” and boycott bands on tour? Thankfully, our next-door neighbors have a band, Dead Larry. We don't have to go anywhere to hear them.

Inequality and Politics

Commenting on Larry Bartels' Unequal Democracy, Frank Pasquale writes:

We are frequently told that inequality–even the extreme growth in inequality witnessed over the past 30 years–is an inevitable concomitant of globalization, or is necessary for economic growth, or can't be remedied by politics. Bartels' work complements the growing consensus–led by people like David Cay Johnston, Jacob Hacker, Stephen Gosselin, Barbara Ehrenreich, among many others–that all these complacent contentions are not merely unsupported, but actually reverse the true causes and effects at work. Political change has accelerated US inequality–and only political change can address it.

I don't know who Pasquale thinks he's addressing. No one thinks we can't use politics to redistribute our way to lower levels of income inequality. The question is: Why do this? What's the problem to which this is the solution?

I feel like there is an unarticulated doing/allowing issue floating around in the background in this debate. Say the U.S. Congress cuts top tax rates. Is this politics causing higher inequality? Or is this evidence of relative indifference about allowing higher inequality? The left has the tendency to characterize every policy that might allow income inequality to rise as one intended specifically to have this result. This is a lot like the right's characterizing, say, workplace safety regulation as a specific attempt to stymie the growth of small business. In each case, those opposed to a policy see its side-effects as more salient than the primary effects intended by those who favor it. Imputations of bad faith — “you're really after the side-effect and your stated intention is garnish for malice” — are never far behind. Having read most of the recent left-leaning literature on the politics of rising inequality, it is disconcerting to see the argument from malicious bad faith as far and away the dominant narrative. It's hard to find anyone who even tries to fairly understand the ideas behind the recent American right's preference for policies that do in fact tend to allow greater income inequality. Am I wrong to find this pathetic?

David Gordon on Rawls

In the latest issue of the American Conservative, David Gordon has written a smart and lucid essay on John Rawls and his use by libertarians, like me. I agree entirely with Gordon's concluding suggestion that Rawls will be the Herbert Spencer of the 20th Century, though I wonder how we're supposed to take this? That Rawls will simply fall out of fashion? No doubt. That Rawls will be dishonestly maligned and fall into underserved disrepute? Perhaps. Anyway, I have a few quibbles with Gordon's piece.

For the most part, I think Gordon gives a fair account of Rawls' view, but it seemed to me that at one point his account was inconsistent with itself. (The emphasis below is mine.)

Indeed, Rawls’s greatest critic was a libertarian, his Harvard philosophy department colleague Robert Nozick, who raises a key objection to Rawls in his classic 1974 work Anarchy, State, and Utopia. Nozick notes that Rawls does not include property rights among the liberties protected by his first principle. To the contrary, Rawls starts off by assuming that the people in the original position have the task of distributing all the property in society. If one denies this, and, like Nozick, thinks that people start off with property rights, then there will be little or no scope for the difference principle to operate.

Then, later, while discussing what Hayek liked about Rawls — the generality of his proceduralism — Gordon notes:

In Rawls’s system, people in the original position do not assign shares of wealth to particular people: they set up general institutions for society. This fitted in with Hayek’s emphasis on the rule of law. When Hayek opposed “social justice,” what he had in mind was a system that gives orders to particular persons, ungoverned by general law.

The latter claim is correct. Principles of justice apply to the “basic structure” of society — the general institutional “rules of the game” — and do not identify patterns of property holdings. Hayek notes, correctly, that Rawls makes precisely his own point: that questions of justice apply to the rules that govern social cooperation, not to the patterns of holdings that interactions in accordance with those rules produce. If the rules are okay, then so is the pattern. But how do we know the rules are okay? Rawls says, correctly, that the basic rules of the game, including property law, have broad distributive consequences, and must be shown generally to benefit the least well-off class. Why? Because everyone needs to have reason to comply with the rules of interaction if those rules are going to define a social order that is stable in right way. The question whether the rules are okay is not independent of the kind of pattern it will tend to produce. My sense is that Hayek agrees with this.

It's a common misinterpretation of Rawls (helped along by Nozick, I'm afraid) that the task of selecting principles of justice in Rawls' system is “distributing all the property in society.” The task, part of it, is indeed to evaluate the basic rules in terms of their distributive consequences. If we “start off” with property rights for men, or property rights for white people,  we will find that the subsequent patterns of holdings will have something to do with how we've agreed to assign and enforce those rights. The fact that, under an order governed by such rules, women or blacks will tend either to be dependent or impoverished is grounds enough for those people to reject those rules, and grounds enough for any of us to reject those rules. If whole classes of people have reason to reject a basic rule of social interaction, that rule can't be a principle of justice.  Counterfactual choice in the “original position” is an unwieldy and unnecessarily extravagant way of generating the incontestably desirable impartiality of the rule of law. But Rawls is not wrong to see that the basic institutional rules have distributive consequences, and that these consequences may provide reasons to reject some candidate principles of social cooperation.

I should say that by no means do I take my Rawls neat. Like Rawls, I am a kind of contractarian who thinks the justification of basic institutions involves their being generally to the benefit of everyone, especially the least well-off.  Like I said, I don't think the original position/veil of ignorance business is all that illuminating in the end, if used as anything more than an intuition pump. Scanlon ends up distilling it down to what rules are and are not “reasonably rejectible” for a good reason. I think a strict interpretation of maximin (e.g., not okay for everyone else to to gain a million if the working class loses a dollar.) is crazy, and that talk of “justifying inequalities” in Rawls' Second Principle is based on a mistake. I deplore Rawls' completely unjustified analytic nationalism. And Rawls' discussion of luck and desert has always struck me as flat-out confused, and I think has had a terrible influence in political philosophy. Rawls is a neo-Kantian, I am a neo-sentimentalist. I also disagree with Rawls at a profound level about the relationship between democracy and liberty. Let me say a bit more about that.

Rawls is genuinely a liberal thinker. Liberty has categorical priority in his system. Political equality via democracy, he thinks, is the best means for achieving and maintaining liberty. Rawls worries a lot that self-reproducing and/or widening economic inequalities threaten the conditions for democracy and therefore the conditions for liberty. I think Rawls is not really very careful here and is pretty poor on the political economy of democracy. I am a James Buchananite here, and I think a great deal more of the necessity of constitutional constraints on the scope of democratic government than does Rawls. But it is worth nothing that Buchanan, too, more or less buys in to Rawls' general analytical framework. Richard Epstein is thinking much the same thing is his obituary of Rawls when he argues that adding “institutional realism” to Rawls “ironically” renders libertarian conclusions.

I've drifted away from Gordon's essay, haven't I? Gordon's real beef with Rawls seems to be his later ideas about “public reason,” ideas that I like a lot. I'll tackle that in another post. For now let me point you here.

Keeping Our Cool

Posting here will continue to be light as Kerry and I make our way to the Hawkeye State, but please turn your attention to the new issue of Cato Unbound, “Keeping Our Cool: What to Do About Global Warming,” featuring a lead essay by the estimable Jim Manzi. Commenters include: Joseph Romm, climate wonk at the Center for American Progress; Indur Goklany, author of The Improving State of the World; and Michael Shellenberger and Ted Nordhaus, authors of Breakthrough.

Here's a taste of Manzi:

The only real argument for rapid, aggressive emissions abatement boils down to the point that you can’t prove a negative. If it turns out that even the outer edge of the probability distribution of our predictions for global-warming impacts is enormously conservative, and disaster looms if we don’t change our ways radically and this instant, then we really should start shutting down power plants and confiscating cars tomorrow morning. We have no good evidence that such a disaster scenario is imminent, but nobody can conceivably prove it to be impossible. Once you get past the table-pounding, any rationale for rapid emissions abatement that confronts the facts in evidence is really a more or less sophisticated restatement of the precautionary principle: the somewhat grandiosely named idea that the downside possibilities are so bad that we should pay almost any price to avoid almost any chance of their occurrence.

But to force massive change in the economy based on such a fear is to get lost in the hothouse world of single-issue advocates, and become myopic about risk. We face lots of other unquantifiable threats of at least comparable realism and severity. A regional nuclear war in Central Asia, a global pandemic triggered by a modified version of HIV, or a rogue state weaponizing genetic engineering technology all come immediately to mind. Any of these could kill hundreds of millions of people. Scare stories are meant to be frightening, but we shouldn’t become paralyzed by them.

In the face of massive uncertainty on multiple fronts the best strategy is almost always to hedge your bets and keep your options open. Wealth and technology are raw materials for options. The loss of economic and technological development that would be required to eliminate literally all theorized climate change risk would cripple our ability to deal with virtually every other foreseeable and unforeseeable risk, not to mention our ability to lead productive and interesting lives in the meantime. The precautionary principle is a bottomless well of anxieties, but our resources are finite — it’s possible to buy so much flood insurance that you can’t afford fire insurance.

We have ideas about what a real, rigorous, intellectually honest debate about climate policy should look like. We hope this will be it.

The Perils of Thumbnail-Enviro-Blogging

Ah, blogging. My post below was intended as, well, as a “thumbnail sketch” — “a brief outline or cursory description” — offered for critique by my commenters. It was the product of perhaps ten minutes of deliberation, laying out in stark terms the countours of a few lines of thought I have found appealing at first blush. And thanks to all the commenters for your critiques, which I value, and many of which I agree with.

That said, sigh. I am very grateful for Tyler's link, for his broad agreement, and even for his terrifying apocalyptic imagination. But his naming the post “Will's Theorem” implied a settled view that I do not have and a logical structure I certainly did not take any care to set out. Then my admittedly half-baked thoughts showed up on the Wall Street Journal economics blog, and then on Felix Salmon's blog at Portfolio, where I am treated to a pretty good pummeling. Anyway,  now I feel semi-famous for a view I hold at barely better than even odds! Bittersweet.

Anyway, here are a few of Felix's points, and some thoughts about them:

But he has no reason at all to believe that in the medium run environmental externalities are positive rather than negative. It's entirely possible that in the medium run fossil fuels will remain cheaper than alternative energy sources, and that externalities will remain negative. It's also entirely possible that by the time fossil fuels are so scarce that alternative energy sources are cheaper than their carbon-emitting counterparts, we will have pumped so much carbon dioxide into the atmosphere that it will be too late: environmental catastrophe will be upon us.

Will's argument, it seems to me, seems to rely on the peculiar idea that we'll run out of fossil fuels just in time to avert environmental catastrophe: that even if we don't change our ways unilaterally, the finite supply of oil and coal wil force us to do so before it's too late.

But scientifically speaking, there's no reason to believe this. Carbon levels in the atmosphere are already too high, and they're rising fast.

I completely agree that there is no reason to believe that coal and oil prices will happen to rise just enough, just in time to cause a seamless, universal shift to cleaner, relatively cheaper sources of energy. That is in fact silly.

I expect that what's going to happen (what is perhaps already starting to happen) is that already very wealthy nations will try to force a shift to cleaner energy sources by manipulating relative prices — that is, by taxing carbon and subsidizing alternatives like wind, solar, biofuels, etc. At a point in the not-distant future, there will be large-scale substitution to the alternatives in these rich countries. The effect of this will be to ease demand for extractive energy sources, dramatically bringing down the price of coal and oil on the world market, making them that much more attractive to developing economies, who will then burn them in the least clean way. In effect, the rich world will be subsidizing dirty energy for the poor world. This is, I think, quite generous of us, but it's not clear to me the result will be any net decrease in carbon emissions.

Because I am not naive about the probability of our arriving at a stable solution to the global collective action problem required to successfully impose a worldwide tax on carbon, when we arrive at the point where rich countries finally succeed in reducing the price of carbon for poor countries, it's probably then a race of innovation against the true climate model. If the true model is the current consensus model, then we may simply be stuck with the (Nordhaus-calculated) $23 trillion dollar externality in 2100. Innovation certainly may fail to push the price of alternative energy to free (more or less) before we begin to take a big economic hit from warming. But if I could, I would bet my life savings against the predictions of the current consensus climate model. And I would also bet (rather more conjecturally) that energy will be basically free by 2050. Which may help explain where I am coming from.

Now, I have to say, I have no idea what Felix is talking about when he says that “carbon levels in the atmosphere are too high.” Too high for what? I am not aware of a net negative externality from current levels of carbon. But whatever. My point about technology was not just that technology will, in the medium-run, produce clean energy sources that will underprice oil and coal, but will also produce Nordhaus' first-best “low cost backstop” — a technology like carbon sequestering trees that basically delivers the carbon level we want. I predict this will happen in the medium term, by which I guess I mean the next several decades. (Oh, to have a real prediction market!) If we do get it, it's going to come from the kind of science and innovation that, as I said, “causes and is caused by” economic growth. So that's what I mean when I say I think the medium-run environmental externality from growth is positive.

Happiness Inequality

Read Justin Wolfers first in a trilogy of posts on U.S. happiness inequality at Freakonomics.

Also check out Eduardo Porter's account of Stevenson and Wolfer's paper:

It seems odd that happiness would become more egalitarian over a period in which the share of the nation’s income sucked in by the richest 1 percent of Americans rose from 7 percent to 17 percent. In fact, the report does find a growing happiness gap between Americans with higher levels of education and those with less, which is roughly in line with the widening pay gap between the skilled and unskilled.