Tuesday, October 16, 2007


...this guy nails it:

One argument which I have found surprisingly absent is the apocalyptic version of Pascal’s wager: if there is a genuine strong change, we should move swiftly to combat it, and if there isn’t, swift movement to cut carbons would not be so bad (it could spur innovation, etc.). If you think the evidence is unclear, that’s not an argument to do nothing unless the evidence will become clearer soon — which it won’t. As such, your view is still an argument for doing something now because the cost of a false alarm is small and the cost of a missed threat is large. Big reforms are like an insurance policy: you pay insurance for peace of mind, but you also hope your money is wasted, and there is a small irreversibility from having sacrificed up front.

Voluntary demand-side reduction at a large international scale won’t work. Besides the problem of free-riding, people (and countries) who are helpfully cutting back get annoyed when others aren’t. You see this clearly in lab experiments on contribution to public goods in “commons dilemmas” — people help out at first, then get mad that others aren’t helping, and express their anger by not helping. One useful tool is a serious carbon tax (choose your favorite number, double it, hope for something in between, and find a politically popular way to earmark some of the revenue to R&D that won’t be supplied privately).

Even better is an international permit trading system (and yes, it should be international, since local systems won’t equalize the cost across countries). Get past the moral indignation of issuing licenses to pollute. Firms and governments that will pollute will do so whether you like it or not, but at least a trading system rewards the good guys. Trade-able permits also put a sharp price on the value of reducing carbon, which is a good way to monetize the valuation of carbon-reducing technology, and hence to make the value of innovation clear and encourage it.

Individuals? If you feel great about reducing your own carbon footprint, please do. But unless you are a symbolic individual whose behavior influences others through a newsy social process — thanks, Brad Pitt — yours is a small contribution. Do that, but also read the news, educate your neighbors, crusade, organize, and vote.

A fantastic post if you have the time to read it all. Read the comments at the end too, just for the hell of it. If you thought the issue was simple, think again.

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