Bail Out the Planet

So, I let Earth Day pass without saying anything about Earth Day. I'm indifferent to Earth Day, but I care about earth (it's where I live), so let's try and atone. Those arguing against taking strong action to reduce greenhouse gas emissions tend to emphasize the cost of action. There are two sides to such an argument -- how much action would cost, and how that cost compares to the cost of not acting.

Regarding the former, there are several important points to make. One is that the longer we delay action, the more expensive action becomes. The second is that there are a lot of helpful things we could do that would essentially be costless, or that would have net benefits even discounting the impact on emissions. For example, someone who is at present indifferent between two similar goods has no incentive to choose the one produced with fewer emissions. A carbon price would provide that incentive at essentially no cost to the indifferent consumer. Or take driving. We lose billions of dollars every year to lost time and wasted fuel resulting from free roads and parking. Price those things appropriately, and driving is reduced and society is better off. Emissions also come down, but that's just a nice side benefit.

Of course, there are also the harder questions, like how to green the world's electricity supply at an economically and politically acceptable cost, but to consider this, I think it's worth bringing in the second half of the argument -- the cost of inaction. There are very complex models out there for figuring out the appropriate level of current consumption to forgo for the sake of emissions reduction, and the serious thinkers spend a lot of time focusing on those, and on their moving parts -- discount rates, expected economic growth, and so on.

It's interesting to set that approach alongside the reaction to the ongoing economic crisis. There has been, of course, a willingness to throw a great deal of money at the problem -- appropriately, in my view. There have also been a lot of people having road-to-Damascus moments on the virtues of regulation. Behind all of this are a few key insights. We weren't as good at keeping ourselves safe from economic calamity as we thought we were. Economic calamity is really painful. And economic calamity is frightening; as bad as the economic pain of the 1930s was, far worse was the political fallout that resulted from the chaos.

Humans don't handle significant change all that well, and we're facing unprecedented climatic change. Maybe the economic impact won't be that bad, particularly for richer countries in temperate zones, but there's good reason to think that the economic costs will eventually become significant; cities are expensive to replace. Incredibly difficult to predict, but almost certain to follow from climate change is political instability. That means war, suffering, and death.

So when I see the nonchalance with which a lot of people handle the climate change threat -- we'll manage to muddle through somehow; we'll be richer and better able to respond -- and when I think about how the sums that we need to spend on emissions reductions are nothing like the response we've mustered to battle this economic and financial crisis, I wonder how much we've really learned about ourselves from this meltdown. Sure, we're all chastened by the financial mess we got ourselves in, but it doesn't seem to have dimmed our hubris more broadly. We're watching CO2 concentrations rise just as we watched home prices increase, and we're sitting on our hands assuming it will all work out. But man, couldn't we have used an ounce of prevention in 2003.