Since its inception, the environmental movement has had an uneasy relationship with economics. The environmentalism that arose in the 1970s relied almost exclusively on “command and control” regulations that mandated certain actions by polluters, with little attention paid to issues of economic efficiency, business incentives, or how markets are likely to evolve over time. The movement was populated largely by scientists, lawyers, and activists, many of whom believed that our capitalist system was the main driver of environmental degradation—and that economics was little more than capitalism’s enabler.

This skepticism, and sometimes outright hostility, towards economics stemmed from many firmly held beliefs: that the quest for economic growth by definition resulted in the exploitation of the natural world; that private entities with their focus on profit will always degrade the environment; that assigning dollar values to nature was counter-productive, and one of the main drivers of the unhealthy relationship between humans and the environment. The overarching position of the environmental community for much of its first 20 years (roughly1970 to1990) was that markets could not be harnessed to benefit the environment, but instead needed to be suppressed and reined in to promote environmental values.

This position still prevails in some environmental circles, but the profound distrust of economics has largely given way to a more balanced and realistic assessment. Environmentalists have discovered that the theory of market failure (the foundation of much of microeconomics) contains a powerful environmental message: private markets alone will not fully account for the costs they impose on the environment and human health, nor under many routine circumstances will they promote the sustainable use of natural resources. Environmentalists can now point to classical economic theory for one of their strongest arguments in favor of government action to protect the environment.

This theory not only provides diagnostic criteria to determine when markets work effectively and when they don’t; it also offers prescriptive action on how to make markets function better. For example, the rationale for greenhouse gas taxes comes directly from the economic theory of Pigouvian taxation, which posits that polluters should be charged on a per unit basis for the damages they impose on society. Microeconomics can also provide insight into the best stage of the production process to levy the taxes (in order to maximize their efficacy), as well as methods to redistribute the tax revenue to reduce any regressive impact and help transition to cleaner modes of production.

The primary alternative to direct emissions taxation is “cap and trade,” which allows the government to set an overall cap on total pollution while allowing firms to achieve emissions reduction by buying and selling pollution permits. Cap and trade was successfully implemented in the U.S. in 1990 for sulfur dioxide emissions (and was adopted by the EU in 2005 for greenhouse gas emissions), with cost savings to the industry in the hundreds of millions a year, without compromising the target reductions. Environmentalists used to fret about the moral implications of giving polluters a “right to pollute;” now that cap and trade has a demonstrated record of success, there is growing acceptance that the method can be a powerful environmental policy mechanism.

There is also growing recognition that, where property rights are nonexistent and natural resources are being exploited unsustainably, assigning property rights and limiting access can help reverse the damage. The principle has been applied with significant success in many ocean fisheries; it’s also being put into practice to help reverse deforestation in areas where ownership is currently contested.

Sometimes markets fail in subtle ways that have major environmental implications. For example, private entities have little incentive to provide the public with information about their toxic emissions. Consumers, therefore, make purchasing decisions with limited information about what types of production processes their purchases support. Policies that force firms to provide complete information on their toxic emissions can empower users to make better-informed purchases, and more knowingly express their preferences for greater environmental quality.

The above examples are only a few of the ways in which environmental goals have been advanced by addressing market failures. Assigning dollar values to ecosystems has also been accepted by many environmental organizations, who now view this as an essential ingredient in making sure policymakers and businesses don’t overlook, and underestimate, the benefits that nature provides.

New York City decided to purchase its upland watershed because forests could provide water filtration cheaper than a sanitation plant. Costa Rica elected to pay private landowners for the forest ecosystem services their properties provide to the general public. These are just two real-world examples of how placing a dollar value on ecosystems led directly to increased preservation.

The ability of economic theory to advance environmental goals has helped the economics profession win over many once-skeptical environmentalists. The environmental community has come to recognize that market failures are to blame for much of our environmental degradation, along with market distortions—e.g., subsidies, tax breaks, and the right to pollute without accountability. These market failures and distortions are the antithesis of healthy capitalism, and are opposed by most economists.

Summing up, over the decades environmentalists have become far more sophisticated in their understanding of economics. Economic theory provides many important tools to analyze when markets work and when they don’t, and how to use that knowledge to benefit the environment. Most important, there’s a growing recognition that well-functioning markets aren’t the enemy of the environment, but in fact may be one of its greatest allies.

Jason Scorse

This post appeared on the blog of the American Sustainable Business Council this past week.

Externalities are costs (or benefits) not directly borne by those engaged in an economic transaction. Pollution is the most ubiquitous negative externality in the world. All externalities allow companies, large and small, to effectively cheat by pushing costs onto society that they should bear. With climate change accelerating, the failure to address externalities is literally threatening the future of human civilization.

Because of the prevalence of negative externalities throughout all sectors of our economy, we are living in a world of massive economic distortions, misallocation of resources, and grand illusions. This is not hyperbole, but simply the economic reality we face today. Pollution externalities allow us to fool ourselves into thinking that $4 a gallon gasoline is too expensive, or that .99 cent hamburgers are a good deal.

If fossil fuel producers had to pay for the greenhouse gases they emit, agribusinesses for the nitrogen pollution that cause “dead zones”, chip makers for the heavy metal pollution from the production of laptops or shipping companies for the diesel pollution that creates smog in the world’s port cities; the industrial landscape would be radically altered. Instead, we would have many more wind farms and less oil rigs, more recycling and less waste, smaller and more efficient homes, and more locally made goods.

Sadly, not only do many of the most polluting businesses oppose measures to address the negative externalities they produce, but due to their tremendous economic power (ironically, oftentimes due to the fact their goods are underpriced in the market) they can disproportionately influence the political process to their advantage. This leads to a situation where not only do the largest polluters often pollute for free, but they secure all sorts of subsidies and tax breaks. This is truly perverse, hence the term “perverse subsidies” to label government handouts for environmentally destructive activities.

Opposition to paying for the pollution is both short-sighted and representative of a true market failure. It is short-sighted because well-crafted policies to address externalities could make the entire American economy stronger by spurring innovation and creating new products. It is unfair because in America we believe in personal responsibility. If someone crashes their car into someone else’s, they are liable for the damages. The same should be true for pollution from a business activity. The thousands of people who become ill from exposure to heavy particulate matter or from drinking contaminated water produces just as much real suffering as getting injured by a more obvious cause. Rising health care costs to address these hidden externalities place an undue burden on the entire society. But today, those who injure people through polluting activities often are allowed to continuing do so with impunity.

Businesses need to work with the Administration and Congress to craft new laws to address these market failures by taxing pollution at the source. The revenues can be used for a combination of deficit reduction, new technology R&D, and education, healthcare, and infrastructure investments. As a result, America would become much stronger. Yes, corporate profits might take an immediate hit in heavily polluting industries, and yes, consumers would feel an immediate pinch in their wallets, but with more money pumped into innovation, and a healthier, smarter, and more productive workforce, these costs would be more than mitigated over the medium term. And getting new revenue streams for critical infrastructure needs (both physical and virtual) would benefit all businesses.

Instead of running away from externalities, businesses should be leading the charge to effectively curtail them, and channel that new revenue into a host of productive uses for the greater economic good.

Jason Scorse

The following appeared in the NYT op-ed section on Thursday, November 29th.

It's no surprise that it can be very expensive to live near the ocean. But it may come as a surprise to American taxpayers that they are on the hook for at least $527 billion of vulnerable assets in the nation’s coastal flood plains. Those homes and businesses are insured by the federal government’s National Flood Insurance Program.

You read that right: $527 billion, which is just a portion of the program’s overall liability of $1.25 trillion, second only to Social Security in the liabilities on the government’s ledgers last year, according to government data.

The flood insurance program was created by Congress in 1968 to fill a void: because of the risk, few carriers provided flood insurance. Now, private insurers offer flood insurance in a partnership with the government — but taxpayers shoulder all the risk. It has turned out to be a bad bet. The program is $18 billion in debt, a sum the government acknowledges probably will never be paid back by premiums, and it is likely to need a new multibillion-dollar infusion to pay claims from Hurricane Sandy. It is long past time for the government to stop subsidizing home and business owners who live and build in dangerous flood zones.

Homeowners and businesses should be responsible for purchasing their own flood insurance on the private market, if they can find it. If they can’t, then the market is telling them that where they live is too dangerous. If they choose to live in harm’s way, they should bear the cost of that risk — not the taxpayers. Government’s primary role is ensuring the safety of its citizens, so the government’s subsidizing of risky behavior is completely backward.

Between 1978 and 2011, the program, which is run by the Federal Emergency Management Agency, paid out more than $24 billion in claims in the coastal flood plain. Total losses paid out for Hurricane Katrina alone exceeded $16 billion. FEMA says it is too soon to say how many claims will be filed for Hurricane Sandy-related damages, although The New York Times reported this month that early estimates suggest that this storm will rank as the second worst for claims paid out, with the cost possibly reaching $7 billion — at a time when the program is allowed, by law, to add only $3 billion to its debt.

The bottom line is that the flood insurance program is a fiscal time bomb for the government.

We should phase out the program, begin thinking strategically about how to shift populations away from the most risky coastal areas, and use the best available science to update the woefully out-of-date coastal-zone risk profiles that government agencies currently rely on to determine danger. We also need to encourage more stringent building codes that take into account the full range of climate risks. (Officials in New York and New Jersey this week estimated the overall costs of Hurricane Sandy in the two states at a combined $72 billion.)

Two major reinsurers, Munich Re and Swiss Re, have strict building codes for policies in coastal areas and will not insure properties in high-risk zones. Florida now self-insures for hurricane wind damage, and has the Florida Hurricane Catastrophe Fund for insurers whose funds are exhausted. The program is financed by a surcharge on all homeowner and commercial insurance policies, but because of the potential for huge liabilities in a future storm, the program might fall short of the money it would need.

We do not underestimate the complexity and political difficulty of phasing out a popular program like national flood insurance, nor do we think the government should abandon people who are currently insured. But Congress and the president should challenge the status quo and make some tough decisions, like providing subsidies or buyouts to encourage people to move out of the most disaster-prone areas, and eliminating other government incentives that support living in high-risk areas.

Some Americans want to live as close to their beloved coasts as they can, but coastal landowners should pay the full cost of living in these dangerous areas. In this climate-constrained world our quality of life will take some hits. But with careful planning and a gradual shift away from the coast, Americans can still enjoy the beauty and live safely, yet escape the cycle of catastrophe and response, in which so much money is expended on properties that are repeatedly flooded.

Judy Kildow & Jason Scorse

Many progressives complain that the traditional media enables Republicans to obscure the truth (or outright lie) by continually peddling false equivalencies between the left and right, and by alluding to centrist positions that the nation should strive for, when in reality these positions are already held by the Democrats.

The worst offenders include some of the major opinion writers for the nation’s leading newspapers—the New York Times and the Washington Post—as well as the hosts of the major Sunday TV talk shows. One such person is Thomas Friedman, whose Times column this past Sunday (“G.(reen)O.P.”) is a perfect example of punditry that obfuscates rather than illuminates.

The basic premise of the piece is that Mitt Romney, having won the GOP nomination by appealing to the far right, should now stake out a “centrist” position on an issue sufficiently important to attract independent voters. Citing the GOP’s history of supporting reasonable environmental measures, Friedman suggests that Romney buck the crazies in his Party and put forth a sensible green energy platform that aligns with historic Republican positions.

Ironically, Friedman made this plea only days after Romney staged a much-publicized press conference at the shuttered doors of the Solyndra Corporation to smear the Obama Administration’s support for green energy. In his rant against Obama’s policies, Romney blatantly lied (a regular occurrence) by stating that the Attorney General’s Office had investigated the loan to Solyndra and found evidence of cronyism.

In fact Romney has shown every indication that he plans to continue the GOP Party line in favor of dirty energy, and oppose all policies addressing climate change. Any analysis of the Republican Party over the last decade shows that it is increasingly being bankrolled by the fossil fuel industry, and Romney is totally unlikely to take these backers on.

No sooner had George W. Bush been sworn in than Vice President Cheney (a former oil company executive) began convening secret meetings of the nation’s top energy companies and inviting them, essentially, to set the nation’s energy policies. All efforts to regulate greenhouse gases were shelved, states that tried to tackle the issues on their own were sued, and federal regulations that limited exploration and energy development were dialed back.

The GOP has become even more closely aligned with fossil fuel interests during Obama’s presidency, working unrelentingly against the “cap and trade” bill in the Congress. With the Koch brothers and their billions staunchly behind them, Republicans have also blocked every attempt to end the billions of dollars in subsidies that go to the oil industry—subsidies that are opposed by roughly 80% of all Americans.

Given these facts and the current political climate, the chance that Mitt Romney could one day wake up and decide to “do the right thing” on energy policy (something Friedman seems to think Romney actually believes in) is zero. There’s no chance. The power brokers in the GOP would never allow it, especially since the Tea Party and other rightwing extremists have made denying climate science a cause almost as dear as resisting any call for higher taxes.

In addition, the reality is that we already have someone with a balanced and serious energy policy: President Obama. While the President’s positions have been far from perfect, the stimulus bill contained the biggest investments in green energy in the nation’s history: he greatly improved fuel efficiency standards, made Detroit focus on hybrids and plug-in cars as part of its restructuring, toughened the rules for coal-fired plants, and continues to support a market-based system to tackle climate change.

If Romney moved towards a more sensible energy policy he would be moving in Obama’s direction, and his contrast to Obama—which delights his far right supporters—would evaporate. Not only is he unable to shift to the middle because of the GOP’s close alliance with dirty fuel interests; in an election in which he needs a fired-up base, moving in this direction would likely cost him more in lost enthusiasm than he would gain in votes from independents.

All of this should be obvious to anyone paying attention to GOP policies since 2000, but it seems to have eluded Friedman. He’s more concerned with maintaining his (undeserved) mantle of pragmatism and above-the-fray detachment, which is supposed to connote a steely wisdom, than in confronting the hard truths about political dynamics in 2012 and the constraints they impose. Friedman is a decent person, but he’s too full of himself to do the kind of honest reporting that might ruffle a few feathers.

Ordinary bloggers like me can point this out, but we don’t have audiences in the millions turning to us every week. It’s a shame that journalists with these followings don’t do a better job. Until they do, American politics and the American people will continue to suffer under a cloud of misinformation and false equivalence.

Jason Scorse

As we all know, the Tea Party is nothing new; it is simply the most recent manifestation of the rightwing extremism that has been an integral part of the Republican Party for over three decades. What is new is that what used to occupy the fringe has morphed into the mainstream of the GOP. Fortunately, increasing numbers of people in the media are coming to realize that the Republican Party is being dominated by its most reactionary and radical elements—and they’re hell-bent on moving America back to the 19th Century, both economically and socially.

Just this week, I witnessed the deleterious effects of the rightwing wave that swept the nation in 2010 and allowed Republicans to take over many statehouses as well as the House of Representatives. I work in marine policy; in 2000, the government embarked on an initiative to incorporate marine spatial planning (MSP) and ecosystem-based management (EBM) into our ocean policy. It was an attempt to overcome the huge disparity between the relative sophistication with which we manage our terrestrial habitats and the minimal steps we’ve taken to improve the management of our coastal systems.

When President Obama came into office in 2008, he established new priorities for our National Ocean Policy (NOP). These included building MSP and EBM into a new national framework to create a more rational and efficient coastal management system. Combining data on human uses of ocean and coastal resources with the best available natural science promised a new era of ocean conservation and improved management.

But the industry groups who profit from exploiting the nation’s coastal resources always viewed MSP and EMB with trepidation, as these will likely restrict their activities. When the Tea Party swept into power in 2010, the industry groups finally had their allies in Congress (most of whom were bought and paid for through lobbying and campaign contributions). They began their campaign by deriding MSP and EBM as “ocean zoning”, which in their view was simply a burdensome regulation allowing the government to restrict access to what should be purely open resources, i.e., open to unbridled exploitation. Republicans proceeded to pack the House Natural Resource Committee with industry hacks, and held hearings in which industry representatives greatly outnumbered environmental groups. MSP and EMB were fallaciously attacked as “job killing” regulations promulgated by “big government”.

The bad-mouthing plan worked.

This past month the National Oceanic and Atmospheric Administration (NOAA), which oversees U.S. ocean policy, cancelled its MSP and EMB initiatives and began closing the Marine Protected Areas Center in Monterey, CA. The reason: the GOP-controlled House simply reduced the budgets for these initiatives to zero. Even though the initiatives formerly had bipartisan support, and were based on more than a decade of scientific input, they were scrapped at the behest of the interests that now control the Republican Party.

Most Americans have never, and will never, hear of the Marine Protected Areas Center, nor will they know how the nation’s coastal environments will suffer now that these policies have been sidelined. And that’s the way the Republicans like it. They seduce low-information voters with platitudes, and stoke people’s anger with faux-patriotic vitriol; once in power, they use that power to undermine any trust the public might have in government action. This creates a pernicious cycle in which corporate interests are continually placed ahead of the public interest.

November will give the nation a chance to turn the tide and vote the GOP extremists out of office. Here’s hoping voters are up to the challenge. If they aren’t, you can rest assured that the rightwing extremists will find a way to undermine all kinds of public institutions in communities all across America.

Jason Scorse

The "economy vs. the environment" debate is as old as the environmental movement. Despite holding little explanatory power, the debate survives because the leaders in certain highly-polluting industries do not want to see their profits diminished by stricter regulation. They lack the creativity to think beyond 20th century technologies, and oppose environmental regulation with every means at their disposal.

The anti-regulatory forces pour millions of dollars into misinformation and propaganda campaigns, and finance politicians and political groups that fan the flames of fear and paranoia to defeat common-sense environmental goals. These groups find their fullest expression in the modern Republican Party, which has taken a radical anti-environmental and anti-science bent, but they also target key Democrats in fossil-fuel dependent regions.

Industries that pollute have the right to oppose regulations they deem antithetical to their economic interests (though not to lie about them). Unfortunately, their anti-regulatory fervor has crowded out reasonable debate about the proper role of government in environmental protection.

The bottom line is that government has a strong role to play in regulating pollution, the worst forms of which occur because of persistent market failures. There are legitimate arguments for severely restricting the government's role in given markets (e.g., housing). At the same time, top economists the world over have come to recognize that most markets cannot provide adequate environmental protection. Markets can do some things extremely well, but optimizing pollution levels is not one of them.

At this time of great environmental challenges, it is imperative that responsible business leaders play a more constructive role in the discussions over environmental policy. They can begin by acknowledging that government has an active role to play, and help steer government policy in the most efficient, transparent, and equitable directions.

We hear a lot these days about how uncertainty is bad for business. This is true, but it's no reason for business leaders to allow the anti-regulatory forces to dominate the debate. When this happens, everyone loses: society gets higher levels of pollution and environmental degradation, and businesses remain unclear about the regulatory future. And without fail, in the absence of Congressional action on large issues such as climate change, more command and control style regulations (which are often less efficient because they do not allow for maximum flexibility) become the default position as regulations are left to the EPA.

Make no mistake, the jobs of tomorrow will increasingly come in the green technology arena. When the coal, oil, and gas industries celebrated the death of climate change legislation in the U.S., the loudest laughter came from China and Germany. China alone plans to invest more than $750 billion in clean energy technology in the coming decade, and Germany continues to move ahead with significant incentives for its alternative power sector.

It's true that emerging economies are willing to tolerate higher levels of pollution in exchange for higher rates of economic growth, as all the advanced economies once did. All the same, given their populations and the pace of their development, their leaders know there is no way they can mimic the history of Europe and America without turning their nations into unlivable wastelands. They realize they will have to leap-frog technology—just as they did with cell phones over land lines—with respect to energy and other natural resource industries.

The companies that develop the world's first low-cost solar panels, low-cost wind turbines, low-cost electric cars, low-cost water purification plants, and most energy-efficient infrastructure will enjoy almost unlimited market potential. America could become that leader, but we are already falling behind. The profit motive is sufficient to keep Silicon Valley and many creative leaders pouring billions into new green-tech projects, but this must be complemented by sound environmental policy at the state and national levels. Ideally, this policy would place a consistent and increasing cost on polluting behavior. It would also channel government resources (which could be supported by the fees on pollution) into basic R&D in a variety of technologies, in order to remain unbiased against nascent technologies.

It will take courageous business leaders to stand up and buck the anti-regulatory trends sweeping the nation, and call for a serious and sustained commitment to environmental regulation that is in the nation's interests. It will take courage to look beyond the short-term bottom line and envision a different way of doing business that leaves a smaller ecological footprint, and produces value through efficiency, service, and niche markets instead of mass consumption dependent on natural resource extraction. But this is what we need if we are to move beyond the stale debates that plague our politics, our boardrooms, and our chattering classes.

Jason Scorse

As the holiday season approaches and people of various religions gather to celebrate, I am reminded of one of the principles shared by all monotheistic faiths—the belief that humans are separate from nature. Even religions that accept evolution believe that humans are uniquely imbued by the Creator, and exist in a separate moral universe.

This great divide between humans and all things non-human has led to incalculable destruction and pain inflicted on untold billions of animals over thousands of years. I do not claim that the religious separation between humans and other living beings is solely responsible, but it has contributed significantly. Virtually all research into violence shows that the propensity for cruelty increases in proportion to the dehumanization of “enemies”; animals perpetually live in that dehumanized space.

We torture and kill billions of animals in our industrial farming system every year; animals are out of sight and out of mind. Animals today have forceful advocates who are questioning and fighting back against the factory farming complex; religion, though, still holds that animals exist solely for human purposes, and we can do with them what we wish. Animals are also abused for sport and in the name of science, for purposes as trivial as testing hair dyes and lotions. Again, there is the belief, promulgated by religion that animals are here to serve us and little more.

Fortunately, we are slowly beginning to realize that the line between us and the animal kingdom is essentially artificial—little more than a product of our arrogance and lack of imagination. We are learning that animals not only have an immense capacity for pleasure and pain, they have complex emotional lives: they pine for other animals, mourn, and develop deep and affectionate ties—with members of their own species, and others as well.

Videos proliferate on the internet of orangutans befriending dogs, dogs befriending elephants, deer befriending rabbits, and even lizards cuddling with cats. Many humans have forged bonds with animals as diverse as lions, tigers, whales, and dolphins. We are also discovering mental capacities in animals far more sophisticated than we once imagined, including the ability to build and use tools, solve complex puzzles, and communicate in complex languages.

These discoveries have begun to impact public policy. The National Institutes of Health just put a freeze on medical trials for chimps, with new criteria that will make it much harder to employ chimps in future medical experiments. The Constitution of the European Union contains language banning animal cruelty, and the Ecuadoran Constitution is the first to include explicit “rights of nature”.

We are nearing a moment in history when societies across the global will recognize that life exists on a continuum; while humans are unique in many aspects, we are only one manifestation of the evolutionary process. This does not mean that all life is equally valuable—an ant is not equivalent to a person—but morality must be broadly defined. It is not enough to simply claim that humans are inherently superior to all other beings.

When we reach this point, we will be able to appreciate our place on the continuum without looking down on other creatures or creating the kinds of divisions that have led us to inflict harm on other creatures and on our consciences as well. The truly moral person is the one who has the power to dominate and control others, but chooses not to (and even a few religious people understand this).

Jason Scorse

The past decade has been extremely depressing for the U.S. environmental community. Rather than lead the world on climate and energy policy, the U.S. has fallen further behind our developed-world allies, and now even falls behind rising powers such as China and Brazil.

The question arises: Why has America not been able to muster the political will to usher in a clean energy future and join forces with the other rich (and not so rich) nations of the world to combat climate change?

The answer is, of course, complex. Institutional barriers in the American political system favor rural states over urban ones and demand super-majorities that are almost impossible to muster; powerful industrial interests continue to disproportionately sway politicians while funding vast networks of misinformation; and one of our two major parties has embraced a virulently anti-science position that is unprecedented in modern history.

But there is something even more fundamental that the environmental community has failed to grasp. It’s not that Germans, Canadians, Norwegians, and French have a greater love for the environment, or that these countries lack parochial and special interests and powerful corporations. Above all else, what differentiates Americans from these other wealthy nations is our much greater degree of economic insecurity.

The reality is that a bold new energy and climate change policy would inevitably result in dislocations in certain industries and upset long-established ways of life in many regions; in addition, it would lead to higher prices for basic commodities such as gas, home heating oil, and food.

In societies where there are strong social safety nets―universal healthcare, universal preschool, strong support for new parents, significant investments in public transportation, and sustained support for higher education ―the changes wrought by a paradigm shift in energy will tend not to result in hugely destabilizing effects across whole towns and communities. In fact, with good planning and investments in critical infrastructure, strong environmental policies can result in overall improvements in the quality of life for nearly everyone.

Throughout much of the developed world, citizens are willing to pay prices for gasoline that would lead to riots in American streets, because they know that the government revenue raised by high gas taxes is used for programs that directly benefit them. In other words, ten-dollar a gallon gas isn’t such a big deal when everyone has great healthcare, great public transportation, and free high-quality schooling.

Many environmentalists criticized President Obama for using virtually all of his political capital to pass healthcare legislation before a comprehensive energy bill. Though many of the benefits of that healthcare bill won’t go into effect until years from now, and support for the legislation still suffers from the copious amounts of misinformation peddled by the bill’s detractors, the goal of universal healthcare will ultimately serve the environmental community. The question is whether it will be too late to matter.

The bottom line is that people are much more willing to support environmental policies that come with large risks and disruptions to their way of life when other policies are in place to shield them from excessive risk and instability. Progressive environmental policies must rest on a foundation of broader investments in social safety nets. One of the primary reasons that the U.S. has fallen behind the world on environmental policy is because we have fallen behind on virtually all measures of economic security; the two are intimately linked.

Jason Scorse

For most of modern American history, the two major political parties in America have largely agreed on the desired long-term environmental outcomes for the country: there was a consensus among Republicans and Democrats that it was a good thing to press for cleaner air and water, less toxins in the environment, biodiversity preservation, and mitigation strategies for clean energy and, mostly recently, climate change.

The disagreements were largely centered around how to achieve these outcomes, and to some extent the pace of change and the absolute targets. Democrats by and large preferred a heavier regulatory approach (i.e. “command and control”) that set specific firm-level emissions limits, prescribed permissible technologies, and set industry-wide energy and fuel efficiency standards. Republicans tended to support more market-oriented policies, with cap and trade foremost among them.

Nowadays, the arguments are no longer over the methods to achieve environmental progress, but whether we should support such progress in the first place. This situation is unprecedented. Those who believed that divided government would lead Republicans to take a more moderate and constructive role have so far been proven wrong. It is hard to imagine the situation being much worse for America’s environmental quality, which is directly linked to the quality of life for all Americans.

The modern Republican Party has absolutely no affirmative environmental agenda whatsoever, and goes so far as to contest the entire rationale for continued environmental progress. Ironically, this extremely reactionary environmental agenda is coming at a time when the ideas that Republicans once championed are now widely accepted as the best ways to structure environmental policy.

The cap and trade bill that died in the U.S. Congress in 2010 was based on market-oriented principles that were the centerpiece of George Bush Sr.’s cap and trade policy for sulfur dioxide, enacted in 1990. It permitted maximum flexibility in achieving its goals of greenhouse gas reductions over a long time horizon, giving businesses plenty of time to adjust and adapt. The bill’s intellectual foundations were so strongly rooted in conservative economics that then-presidential candidate John McCain was a huge supporter of the measure and included it in his presidential platform.

And yet today, the Republican-led House of Representatives has voted to deny the science of climate change and strip the EPA of its authority to regulate greenhouse gases, which was granted to the agency by a 5-4 decision in the very conservative-leaning Supreme Court. The GOP-led House has proposed gutting the EPA’s budget as well. And it gets worse.

The Republicans in the House have refused to end the subsidies for oil companies (as these firms continue to rake in record profits), and while they seek to reduce food stamps, they have made it clear that they will not touch the billions in agricultural subsidies that disproportionately benefit big agribusiness. Adding insult to injury, House Republicans even reintroduced Styrofoam into the House cafeteria after Democrats had removed it during the last Congress.

I have been involved in environmental policy for almost 20 years and have never seen anything like the current Republican assault on the environment. It is truly astounding. To be clear, the Republicans leading this charge against environmental progress are in no way following conservative principles―they are doing the exact opposite. Those who profess to support conservative economics should be leading the charge against subsidies for big business and taking a firm stance in favor of the “polluter pays principle,” which states that those producers and consumers whose actions degrade the environment should pay for the damage. (You know we’re living in an upside down world when the one avowed socialist in the Senate, Bernie Sanders, has been the most vociferous opponent of oil company handouts.)

There is absolutely nothing “free market” about letting polluters trash the environment for free. In fact, this fits the definition of a market failure, not a well-functioning capitalist system. What the Republicans are currently practicing is crony capitalism of the worst kind: rewarding industry at the expense of the public interest and future generations.

It is the Republican rank and file who should be the most offended by these policies. Public opinion polls consistently show that both Democrats and Republicans care deeply about the environment, and support clean energy policies and strong environmental safeguards. Unfortunately, the once proud environmental ethic of the Republican Party has been snuffed out by a small group of radical Tea Party extremists who are deeply confused both about true conservative principles and the proper role of government in society. And once moderate Republicans who supported sensible environmental policies are nowhere to be seen. Until true conservatives retake the Republican Party we will be left doing little more than damage control, and the chances of a new comprehensive affirmative environmental agenda are slim to none.

Jason Scorse

Overall, President Obama’s State of the Union speech was received positively by both the public and the pundits; it was a sober speech outlining the economic challenges we face and the ways government investment can bring long-term prosperity.

I was pleased to hear the President use some of the language and framing that I too have been advocating in recent talks regarding environmental policy (long version; short version). Obama couched the race to develop green energy technology, in which the U.S. is currently falling behind, as less an environmental imperative and more an economic and security imperative. He played to economic nationalism by challenging Americans to rise to a new “Sputnik moment”.

This is exactly the way to talk about the green tech revolution. While I was disappointed that Obama failed to even mention climate change, the fact is that appealing to economic competitiveness could well be more effective—especially in a depressed economy, in which environmental goals have slipped way down in the public consciousness. Americans like being No. 1—or least thinking of themselves as No. 1—and in green tech, we’re losing.

It is always slightly dangerous to invoke nationalistic sentiment, but it’s better to use it to support renewable energy and economic dynamism than most anything else. (And with the Right stirring xenophobic nationalism, it is imperative to have an alternative that appeals to the best of America and not the worst).

Obama did a very good job of telling America the stark facts about our global position in the green tech arena; he also made clear that the race isn’t over, and that we can still win by making the proper investments. This was a way to propose more stimulus, especially infrastructure spending, which has considerable bipartisan support and is generally favored by the public.

But Obama did even more: he cleverly alluded to the perverse subsidies that government doles out to fossil fuel companies. After making the case for more investment in clean tech, he said that any new proposals wouldn’t add to the deficit because they would be paid for by eliminating breaks to oil companies. This is not only excellent economic policy—ending subsidies to polluting industries and using those monies to support clean technologies—but it puts Republicans in a bind. The GOP is supposed to believe in free market principles, and nothing violates those principles more than government handouts to extremely profitable industries. Obama was in effect daring Republicans to once again support corporate welfare for big oil, and violate the conservative principles that they champion only in the abstract.

This was my favorite part of the speech. As I’ve been saying in this blog, today’s Republican Party is anything but conservative. It favors a form of crony capitalism in which “limited government” means limited to their friends. Ironically, it is Obama and the Democrats who on energy policy have been proposing conservative solutions: cap and trade is the quintessential, market-based conservative policy option.

I hope Obama builds on his State of the Union narrative, and also includes more on the national security implications of a better energy policy. And I hope he keeps forcing the GOP to either stand up for conservative principles, or risk being exposed for the frauds they truly are.

Jason Scorse

The death of climate change legislation this week provides more evidence of a completely broken political system. Not only is the threat from climate change real and growing; addressing the problem would have strengthened our economy and reduced the power of the world’s petrodictators. Climate change policy would have been a huge net positive for society, and it should have been a no-brainer.

But of course, some industries—notably oil and coal—would be harmed. Since they hold disproportionate political sway, these incredibly polluting industries were allowed to block progress. It is truly discouraging to the see the world’s greatest democracy beholden to the lowest common denominator.

The GOP is largely to blame: not one Republican Senator could be counted on to do the right thing (and remember that cap and trade was part of the McCain-Palin platform, but now even McCain is against it, as well as Lindsey Graham who worked with Kerry and Leiberman on a climate bill). Although comprehensive climate change legislation had already passed the House (again, with no Republican support), the new supermajority requirements of the Senate meant that at least some Republican support was necessary (especially since a few “centrist” Democrats from the oil and coal states were likely to vote “no” as well.)

But despite the obstructionism and small-mindedness of the Republicans, I place the majority of the blame on Obama. Why? Because he never made the case to the American people, never forced a true debate on the issue.

Obama’s greatest strength is that he can talk to the American people as adults, and level with us about the hard choices we face. But before the climate bill negotiations even began, he capitulated to the right by offering billions in federal loans for new nuclear plants and pledging to expand offshore oil drilling.

Later, faced with the disaster in the Gulf, Obama could have turned crisis into opportunity and made the case as to why finally—after decades of speeches and broken promises from Presidents as far back as Nixon—we had to wean ourselves off fossil fuels. He could have packaged this with American competitiveness and the need not to let China and Europe become the dominant players in the new alternative energy industries. He could’ve reminded us that most of the 9/11 hijackers came from Saudi Arabia, which supports extremists around the world and doesn’t even let women drive cars; he could’ve pointed out that Iran wouldn’t be funding a nuclear program if oil was $20 a barrel.

Instead, Obama and the Democrats caved. They didn’t force a vote to put people on record; they didn’t make the Republicans actually filibuster the bill; the threat was enough to make them fold. Most discouraging (and not confined to the climate bill) is how the Democrats have been unable to enforce party discipline on procedural votes; it’s one thing to resist party-line unanimity on legislative votes, but all Democrats should be required to let legislation come to the floor. It’s beyond me that Democrats who side with Republicans on filibusters go unpunished; loyalty on procedural votes seems to me an absolute minimum requirement for a political party.

Obviously, I’m frustrated. There is simply no excuse for a failure of this magnitude, especially without a fight. There was never any indication that Obama took this issue seriously enough to do what was necessary, and for this I will not forgive him.

But the fight goes on, and Obama and the Democrats still have time to make up for this colossal misstep. There are a number of steps that the EPA is likely to take next year that could significantly limit greenhouse gas emissions, and are also onerous enough that the oil and coal industries may actually prefer congressional action. In addition, there are a number of executive orders Obama could issue to increase energy efficiency throughout the economy—and, through government procurement of green energy, move the market in a new direction.

And who knows? Maybe the Democrats won’t lose too many seats in November, and will get a second wind on this issue. At this point, they have failed and there’s no good spin to put on it.

P.S. The NYT seems to largely agree with how I appropriate blame. On a positive note, Harry Reid spoke to the Netroots Convention and offered a glimmer of hope. And although unrelated to climate, this exchange was extremely moving and demonstrates why despite all of their shortcomings the Democrats are far superior to the GOP.

P.P.S. Krugman has a nice piece Monday on the issue and lays more of the blame on the consummate hypocrite John "country first" (cue the laugh track) McCain.

Jason Scorse

Humanity is at a fascinating crossroads. We have the technology and the means to create a sustainable development path for the world economy; the question is whether we can make the transition before catastrophic climate change becomes certain, before the oceans are depleted, and before our legacy becomes so toxic that we are destined for generations of increased cancer and eventual species collapse.

On the positive side, the major transformational technology of the 21st century—electric vehicles—is about to take off. The two impediments to the widespread adoption of this technology, the cost and storage potential of the batteries, have both been overcome. The Nissan Leaf set to come out at the end of this year will cost in the low to mid-20s (after rebates) and the battery can hold a charge of 100 miles. The cost per mile is about 1/5 that of gasoline, meaning that the average driver in the U.S. will save approximately $1,000 in gas costs per year (while drivers in Europe will save double that much). With the promise of never having to go to the gas station again and zero point-source emissions, these cars are the future. I predict that more than 50% of all new cars sold in the U.S. by 2020 will be all-electric and 80-90% of all cars on the road in the U.S. will be all-electric by 2030. We are on the cusp of an automotive revolution.

It’s true that electric cars can only be as clean as the fuel that generates the electricity. All the same, the fact the electric motors are so much more efficient than combustion engines means they’ll produce less CO2 and other pollutants than gasoline engines even when they burn dirty fuels. Since the U.S. will increasingly get more of its electricity from natural gas, wind, solar, and even nuclear, the efficiency gains will be tremendous (despite the role that coal will continue to play in our energy mix). Our dependence on foreign oil will soon be a thing of the past, and the petro dictators in Iran and Saudi Arabia will have to find other ways to fuel their economies.

It is doubtful that the efficiency gains from electric vehicles will be enough to achieve the cuts in greenhouse gases necessary to stave off the worst effects of climate change, but they will move us in the right direction. At the same time, legislation in the U.S. is leaning increasingly towards regulation of the utilities sector; this is a helpful development, since electricity is the single greatest contributor to global warming and will only grow in importance as electric vehicles replace the combustion engine.

Other major technological advances on the horizon—in artificial intelligence, stem cells, biotech, nanotech, and computing power—are sure to usher in a new era of productivity which will dwarf that of the modern era. The future will be truly bright if only we can hang on long enough.

There are powerful negative forces that could dampen or even negate any advances. There’s the clear potential of catastrophic climate change; the state of the oceans is extremely troubling, with major species facing extinction, entire ecosystems in decline, and the toxic load so great that the entire ocean food chain may be irreparably poisoned. Add in the rates of tropical deforestation and concomitant species decline, the proliferation of toxic chemicals in our agricultural food supply, and the widespread use of toxic industrial chemicals, and we are truly in a race against time to clean up our act.

Whether we ultimately succeed will largely depend on whether the developing countries can skip the most destructive aspects of industrial progress and implement green technologies to satisfy the demands of billions of new consumers. It is not whether the poor in China, India, Brazil, and Nigeria are going to get cars, refrigerators, and blue jeans, but whether their economies will be based on 20th century models or 21st century green technologies (and whether the emerging markets will mimic the animal product-heavy Western diet or stick with a predominantly plant-based diet; the evidence so far is not encouraging). This is the great economic and environmental challenge that we face.

Jason Scorse

It is extremely disheartening that serious climate change policy appears unlikely to pass Congress this year, and may very well not be on the agenda for years to come (if ever). I blame Obama for not making comprehensive energy reform a serious priority, and not using the disaster in the Gulf to make a forceful and passionate case to the American people that now is the time to break our addiction to fossil fuels.

Whether the political battles of the past year, the persistently weak economy, and the wars in Afghanistan and Iraq have drained Obama to the point that he doesn’t have it in him to rise to the occasion, I don’t know. But he has let down the environmental community, his supporters, and ultimately the country; it is simply insane that in 2010 we still subsidize fossil fuels and fund the Saudi and Iranian mullahs with our thirst for cheap gasoline. Adding insult to injury, China is overtaking us in the production of renewable energy.

The primary obstacle in the way of climate change legislation is the 60-vote threshold in the Senate. Why the Administration doesn’t put good legislation up for a vote and let the GOP block it, making clear to the American people that they at least tried, is beyond me. With a Republican Party united in opposition, there’s no way that serious energy policy can pass.

Not only is the GOP opposed to passing legislation that only months ago was co-sponsored by one of its more conservative members, Lindsey Graham; in fact, Republicans are attempting to move backwards:

1. Senator Murkowski of Alaska tried to pass a measure that would’ve prevented the EPA from regulating greenhouse gases; the measure fell short by only four votes, with a few “centrist” Democrats voting with the Republicans.

2. The GOP continues to block efforts to lift the liability cap on BP, which currently stands at a paltry $75 million (if ever there was evidence that Republicans are shills for the oil industry, this is it).

3. Despite the worst environmental disaster in U.S. history, Republican governors and members of Congress continue to call for an increase in offshore drilling.

A recent op-ed by Senator Lamar Alexander of Tennessee perfectly encapsulates the intellectual bankruptcy of the GOP. In his WSJ piece, “An Energy Strategy for Grown-Ups”, Alexander makes no mention of climate change and displays no understanding of the most basic aspects of energy policy. He argues that wind power won’t help reduce our dependence on foreign oil because oil supplies the transportation sector, while also stating that we need to begin electrifying the transportation sector (which could be done with wind power). He says that utilities need an economic incentive to reduce CO2, which is exactly what the bills he opposes attempt to provide; but he offers no ideas along these lines, and without government intervention utilities will never reduce CO2 emissions on their own. Adding to the circus-like atmosphere of the GOP’s attempts at energy policy, Senator Scott Brown of Massachusetts defended his vote to strip the EPA of its ability to regulate CO2 because the EPA is a “non-governmental” entity; this from a sitting U.S. senator!

The bottom line is that the GOP is wholly unserious about energy policy. Republicans seek to do everything they can to maintain record energy industry profits (including lax safety regulations in the coal, oil, and gas sectors), and are happy with an energy trade balance that sends hundreds of billions a year to nations with interests contrary to ours (Iran, Saudi Arabia, Russia, and Venezuela).

This kowtowing to corporate interests and the anti-science crowd would be appalling in the worst banana republic or authoritarian regime; coming from the leader of the free world, it’s vastly more disturbing. Without U.S. progress on climate policy, the chances for a post-Kyoto deal are vastly diminished.

When we look back decades from now at the interests that blocked progress on the pressing environmental goals of the 21st century, we will realize that the GOP had literally become enemies of the Earth.

Jason Scorse

Ever since the oil embargo of the 1970s, Americans have known that we need an energy policy that reduces our dependence on foreign oil. With the discovery that fossil fuels contribute significantly to global warming, coupled with the entanglements involved in securing foreign supplies, the case has only grown (not to mention the environmental havoc wrought by catastrophes like the Exxon Valdez spill and the ongoing calamity in the Gulf of Mexico).

But time and again, America has come up short.

President Carter’s 1977 speech on the need for a new energy policy is as prescient today as it was more than 30 years ago. During the eight years of Bill Clinton’s presidency, with Al Gore as vice-president, almost no progress was made. Under George Bush and Dick Cheney, we moved significantly backwards; the Administration was run by former oilmen all-too-eager to do the industry’s bidding, with no regard for the public good. Bush not only reneged on his word to regulate greenhouse gases, but his administration fought against individual states that embarked on their own greenhouse gas reduction programs (so much for states’ rights).

Under Obama it was supposed to be different.

Finally, we had a president who understood the dangers that global warming poses; and with large Democratic majorities, there was widespread hope that the oil and coal interests would not be allowed to block new climate legislation.

But then a couple things happened.

Foremost, the GOP went completely off the rails and embraced the worst elements of its anti-science, anti-regulatory base. Even John McCain denounced the cap and trade legislation that he and Obama had agreed on only two years ago. A party that for the most part doesn’t believe in climate science has become so wedded to an anti-Obama, anti-government agenda that it can’t see the huge security and economic competitive advantages of a serious energy policy. The party that prides itself on the ability of markets and businesses to adapt to changing conditions now claims that a modest price increase in fossil fuels will spell the end of American free enterprise. The reality is the exact opposite: America will be economically much weaker in the coming decades without new energy legislation, as China, Brazil, and the EU proceed full-speed ahead, building the energy technology of tomorrow.

In a particularly sad testament to the dysfunctional state of the Senate, where 60 votes are now needed to even bring legislation to the floor, the Gulf oil spill seems to have made it even less likely that the Kerry-Lieberman energy bill will pass. It had been assumed that expanded offshore drilling would attract the votes of a few “centrist” Democrats; now, given the shifting politics of offshore drilling, they’re not likely to support the legislation. If the bill doesn’t pass during this Congress it’s unlikely to pass over the new few years, given the almost certain prospect of dwindling Democratic majorities.

One wrinkle in the debate is the role of the Environmental Protection Agency (EPA), which has issued new regulations set to go into effect in July 2011 that limit the greenhouse gas emissions of the country’s biggest stationary sources. This was clearly meant as a warning to Congress: do nothing and we will step in. How this plays out will be fascinating because there is nothing that industry fears more than the heavy hand of the EPA (which is one reason they have so far supported the bill before Congress).

To attract industry support, the legislation has been so watered down that many in the environmental community wonder if in fact it’s worth supporting. I believe it is, if only because it’s a foundation that nudges us in the right direction (the same as the healthcare bill).

Beyond politics, beyond the security and competitive issues, is the larger moral case. The evidence is only increasing that global warming is happening, that it’s accelerating, and that it will have dire consequences for humanity. Most people alive today should still be around in 2020, 2030, and beyond, and will likely witness the effects of climate change on a scale that is hard to comprehend right now. The idea that the profits of the fossil fuel industries should outweigh the global environment is stunning. It is another reminder that something is terribly wrong with the political structure in Washington.

Hopefully, we will come around and do what is necessary to avoid the worst impacts of climate change. Time will tell.

But if we fail to act there will be plenty of blame to go around. In addition to the Republicans and the “centrist” Democrats, President Obama will deserve his share. He spent heavy political capital on healthcare, but has not taken nearly as strong a stance to align his Administration’s policies with his campaign rhetoric on climate change. The American people, addicted to the illusion of cheap energy, are also to blame.

The judgment of history will not be kind if we can’t bring ourselves to do the right thing on energy policy. Tens of millions of displaced peoples, tens of thousands of extinct species, and a much less hospitable environment could make our inaction seem criminal to future generations.

Jason Scorse

There is a tendency among some environmental writers to dismiss “classical”, “traditional”, “neoliberal”, or “mainstream” economics as somehow inimical to environmental interests.

The problem is that more often than not these writers get the facts wrong.

It’s almost as if the knee-jerk aversion to economics that exists among many environmentalists prevents them from acknowledging the truth: that mainstream economics is very much on their side. While criticizing economics may help them polish their leftist credentials and demonstrate the contrarian-independent thinking that grabs headlines, it ultimately leads to sloppy thinking.

Case in point are recent pieces by David Roberts of Grist and Bill McKibben in The New Republic (for the record: I respect both authors and they do good work).

McKibben describes how the Waxman-Markey climate change bill is full of loopholes for special interests (which it is), and uses this as evidence against the basic economic rationale for a cap and trade bill. He then praises the new CLEAR bill sponsored by Senators Maria Cantwell and Susan Collins for its fairness, lack of loopholes, and simplicity. He suggests that it represents a significant departure from traditional economics—the subtitle of his piece is “Forget Cap and Trade”—when in fact the bill is nothing but a cap and trade bill with full auctions and consumer rebates.

The CLEAR bill represents a policy that mainstream environmental economists—from Robert Stavins (Harvard) to Michael Hanemann (UC-Berkeley)—have advocated in one form or another for well over a decade; it is what I have taught and advocated in graduate school every semester for the past seven years.

CLEAR is superior to the Waxman-Markey bill not because it deviates from the prescriptions of classical environmental economics, but because it adheres to them so closely.

Now for the relatively recent David Roberts piece, “Economics as Pathology”, in Grist (one of dozens of pieces over the years where Roberts lambasts mainstream economics). Roberts slams “neoliberal” economics for its insistence on rationality as the guiding principle for human activity; since people don’t act rationally all of the time, Roberts believes this insistence has hampered the search for solutions to climate change.

Roberts, for all of his excellent contributions to the climate change debate, insists on a myopic and caricaturized version of economics that simply doesn’t exist. Even the leaders of the behavioral economics revolution that he admires so much are all mainstream economists in the world’s leading institutions—e.g. Sendil Mullinathan of MIT, Richard Thaler at the University of Chicago, and Matthew Rabin at UC-Berkeley.

In fact, the leading proponents of decisive action on climate change are as mainstream as they come: William Norhaus (Yale), Paul Krugman (Princeton), Martin Weitzman (Harvard), and even Gregory Mankiw (Harvard, former Chair of the Council of Economic Advisors under President Bush). All are extremely prestigious, and all adhere to a largely classical (i.e. neoliberal) economic view. Put them together in a room, and I’m sure they would ultimately agree that we need a range of policies to complement carbon pricing; they recognize that changing both consumer and producer behavior on such a massive scale will require more than just price signals. They might not agree completely on all of the prescriptions but neither do environmentalists.

Economists of all stripes have argued for decades for the proper pricing of pollution, for severely reducing or eliminating natural resources subsidies for agriculture, forestry, energy, water, and fisheries, and for making property rights simpler and more transparent.

So here’s the bottom line: when they discuss policy solutions to environmental problems, Roberts and McKibben (and virtually every other environmentalist) are three out of four times describing concepts that can be traced to mainstream environmental economists, sometimes from work done decades ago.

Of course economists don’t agree on everything, and there is always some economist hack at one of the rightwing “think tanks” who will put forth an outlandish idea—but by and large the most well-respected mainstream economists are squarely on the side of environmentalists.

It would be nice if more environmentalists would simply acknowledge this, and we could all work together to help the public understand the strong synergy between economic and environmental interests. The idea that classical economics is somehow opposed to environmental legislation, or not sophisticated enough to grasp the realities of human behavior, is false. Worse, it creates a false dichotomy that only helps fuel the skeptics and confuse an already chronically misinformed citizenry.

P.S. In a subsequent piece I will explain why these issues are so critical for framing the legislative battles in the months and years ahead.

Jason Scorse

Maybe the rightwing crazies have a point. Maybe global warming is part of a vast leftwing conspiracy to stop us from funding terrorist states to the tune of $1 trillion a year through oil imports; maybe the real agenda is to reduce our use of coal, thereby decreasing the severe air pollution that kills thousands every year, despoils the American landscape, and provides some of the most dangerous employment in the nation; maybe it’s a way for the liberal media, which wants America to fail, to divert our attention from the fact that China is now the leading producer of solar panels; maybe those big-government fanatics just want the American economy to become more efficient so that they can have more money for their radical agenda, like making education more affordable and providing universal healthcare.

As the evidence mounts that global warming is accelerating at an alarming pace, it is equally evident that progressives have done a terrible job of getting people to care. Rarely does a month go by without polls showing climate change near the bottom of the list of people’s concerns.

The problem might rest with the terms themselves: neither global warming nor climate change conveys any sense of urgency.

But it goes deeper than that. Despite incredible weather events now and then, the whole idea of global warming is simply too abstract and long-term. And the solutions are presented in the worst possible ways, either dry and academic (e.g., cap and trade) or in terms which immediately evoke negative reactions (e.g., a carbon tax).

It’s a shame, because there are so many better ways to convince people to do the right things. They’re intuitive, and they require no complex scientific knowledge, no PowerPoint presentations, and no fancy charts. Here are some of them:

#1: Gas guzzlers are the best friends of terrorists and Middle East dictators

We have fought two wars in Iraq and are deeply engaged in the Middle East largely (though not exclusively) because of the region’s oil deposits; and the dictators and rogue regimes that dominate the area exist because of the petrodollars our oil imports give them. It should incense Americans that we have to pay homage to the Saudi Royal Family, which is one of the most medieval, reactionary, and despicable regimes in the world (one in which women can’t even walk alone or own a driver’s license). That a single dollar of our money goes to these despots, or makes its way to the Iranian mullahs, should be an affront to our sense of decency. Yet every time we fill up, some of that money ends up in the pockets of people who hate our values and want to kill us. That should be enough to seal the deal on reducing our oil consumption. It should be talking point #1, repeated over and over again at every opportunity.

#2: If you don’t believe we can do better than coal, you don’t believe in America

Coal is cheap and abundant, but it’s just about the dirtiest fuel out there. It causes extreme air pollution, and just getting it out of the mountains destroys them and the surrounding landscapes. Coal mining is an 18th century technology that has carried us into the 21st century, but it’s time has passed. What jobs would be better for Americans, coal mining or building and installing wind turbines and solar panels? It’s that simple. If we can get our energy without polluting the air and water and blowing up mountains, why wouldn’t we do that? And how on earth did we let the Chinese beat us at making solar panels? We should view it as a national disgrace that a Communist government is beating is at green technology (and Americans love a good challenge, especially against an economic rival).

#3: Wasting energy is for suckers

A recent report by McKinsey and Company estimates that energy efficiency improvements in the U.S. could save us $1.2 trillion. Letting the status quo continue is like throwing money down a rat hole; it is simply stupid. Retrofitting U.S. infrastructure would employ millions of workers in good jobs and end up saving us all money. What’s not to like?

The bottom line: if global warming was a hoax (which it isn’t), so what? There are clear, inarguable reasons for doing everything in our power to reduce our use of fossil fuels and take the lead in the green energy revolution.

And as a bonus we might also help to reduce climate change and ensure a reasonably hospitable planet for generations to come.

Not bad for a leftwing conspiracy.

Jason Scorse

This Wednesday is Earth Day, another of those somewhat strange days that highlight issues which should be top-of-mind every day. But this Earth Day will be different because this time we have a truly environmentally-minded president.

In less than three months Obama has designated millions of acres for wilderness protection, passed legislation authorizing tens of billions for renewable energy projects, directed the EPA to classify greenhouse gases as a threat to human health, stalled leases on oil and gas drilling around sensitive habitats, and put forth the most ambitious and comprehensive climate change legislation in the world.

Perhaps most important, Obama is continually reinforcing the link between solving our environmental problems and laying the foundation for sustainable economic growth; in addition, he’s making the connection between environmental progress and national security.

In these ways and more, the president is seeking to end decades of inertia during which the debate was framed as one between jobs and the environment, and those in the environmental movement were branded as hippies and tree huggers. His appointment of Van Jones as an advisor on green jobs was an especially excellent choice; Jones has been extremely successful at making the link between environmental progress and urban issues, thereby broadening the scope of the environmental movement.

It’s hard to keep the public focused on environmental issues. The failing economy remains the No. 1 priority, gas prices are back down to reasonable levels, and the environment just isn’t a top priority. While much progress has been made in educating the public about the growing climate emergency, the issue is still not very salient for most Americans.

Obama deserves tremendous credit for all that he’s doing to keep the environment front and center. Let’s hope he continues to do so, and gets critical Democratic support for his agenda.

Jason Scorse

On the heels of the stimulus package victory, the Obama Administration quickly unveiled its new bank bailout strategy and home foreclosure plan. The host of economic challenges that Obama faces is unprecedented in the modern era, let alone the foreign policy challenges that seem to grow more difficult every day (see Iran, Pakistan, Russia, Afghanistan, Iraq, and Israel).

But looming ahead is what will likely be Obama’s toughest challenge: enacting meaningful climate change legislation.

With oil prices back down to near-record lows (in real dollars), with the economy in a tailspin, and with environmentalism near the bottom of the public’s priority list, passing such legislation is going to be extremely difficult. It has not been made any easier by Energy Secretary Chu’s recent statement that he is unsure whether the political climate is right.

The signature legislation being considered is a national cap and trade system that would reduce greenhouse gas emissions to 20% of 1990 levels by 2050. This would require a major restructuring of American industry (and the entire economy), and would likely lead to significantly higher energy costs in the short to medium term. Because demand for energy is relatively insensitive to price, much of the cost would be passed on to consumers. Rebates could mitigate these higher prices, but this too would cost money and the question is where to get it.

Enter the contentious issue of giving away or auctioning the greenhouse gas permits.

Government auctions of permits could generate huge amounts of revenue, perhaps trillions; the monies could be used not only to decrease taxes in other sectors, but for additional investments in green technology or technology transfers to the developing world. But industry is going to lobby hard for free permits. Obama has pledged to auction the permits, but it’s an open question whether this will make it into the final bill. Either way, look for a massive battle.

In addition to the permit issue, fossil fuel industries (particularly the coal industry) would be hit hard by any binding greenhouse limits. Legislator in the affected states will lobby intensely to weaken any legislation, and create escape clauses that go easy on the coal industry.

Even more fundamentally, the remnants of the Republican Party in Congress are comprised mostly of extremists, many of whom continue to deny the reality of climate change. Arguments that Obama is kowtowing to the “extreme left,” and that he wants to put the interests of polar bears over those of American workers, are sure to fill rightwing airwaves when legislation is finally proposed.

Whether Obama and Congressional Democratic leaders have the will to overcome these objections (which unfortunately may be joined in by some of the “Blue Dog” Democrats), will likely determine whether America, and the world community, make a serious effort to address climate change. If we wait another eight years, there will be almost no real chance of reining in the emissions trajectory.

Initial signs are promising. Henry Waxman won out over John Dingell for the chairmanship of the Energy and Commerce Committee, replacing a shill for the automakers with a staunch environmentalist. Obama’s Environmental Protection Agency has already signaled that it will make recommendations for regulating CO2, and Obama himself has not backed down in his aggressive call for the U.S. to be a willing partner in tough and substantive international climate negotiations scheduled for Copenhagen this December.

But a lot can happen in 10 months, and great political battles often hinge on factors beyond the President’s control. The state of the economy and foreign affairs toward the end of 2009 may have as much to do with whether we try to reduce greenhouse gas emissions as the best-laid plans of environmental advocates.

Jason Scorse

Aside from all the speculation about Obama’s cabinet picks this past week, the most significant political development may have been the victory of Henry Waxman over John Dingell for the chairmanship of the Energy and Commerce Committee in the House of Representatives. Dingell, a Michigan Democrat, has chaired this powerful committee for nearly three decades. He has consistently undermined sound environmental policy by kowtowing to the Detroit automakers, scuttling efforts to raise fuel efficiency standards and to otherwise address climate change.

Few believed that Waxman would succeed in ousting Dingell before the chairmanship came up for a vote, and Waxman ended up winning by only a slim margin. His victory is significant because it means that Democrats are serious about energy policy. Obama released a short YouTube video on climate change last week, in which he made clear to both domestic leaders and the international community that America will take a leadership role in reducing greenhouse gases.

In addition, a large portion of Obama’s planned stimulus package (which will be his first priority after taking office) centers on building new green infrastructure, including transmission lines to support electric cars, smart grids to allow much more efficient use of energy, and major new renewable energy projects across the country.

As someone who has waited decades for the United States to get serious about energy issues, and not simply react to the ebb and flow of the oil market, the prospect of comprehensive reform is truly exciting.

Obama is benefitting from a political climate in which there is now bipartisan consensus that government must make up for the spending slack caused by falling consumer demand. Add to this the fact that most jobs in alternative energy cannot be outsourced, and you have a potent recipe for action.

Another aspect of a major progressive energy policy is its security component, i.e., what’s best for the environment and job growth is also best for our national security: as one of my bumper stickers proclaims, “Renewable Energy is Homeland Security”.

With this in mind, look for James Woolsey, former head of the CIA and energy advisor to John McCain’s presidential campaign, to have a role in the Obama Administration. Since Obama has yet to name a (promised) Republican to his cabinet, I wouldn’t be surprised if Woolsey became at least a senior advisor. This would be politically shrewd; Woolsey is highly respected in both parties, and could help cement support from the military and those who are security-minded, but less persuaded by environmental concerns.

Jason Scorse

There are many debates about the best ways to address global warming, with most centering on whether a carbon tax or a cap and trade scheme is best (or some combination of the two). There are also some lively, though less extensive, debates about the extent to which we should balance our attempts to reduce global warming with attempts to mitigate its effects.

I propose shifting the focus and asking what to me is the key question: which policies would best promote technological innovation? This is crucial because simple demographics and economic trends make it impossible to significantly curtail greenhouse gas emissions without major technological advances.

By the end of the century the Earth’s population will likely be in the range of 9 billion, a roughly 50% increase. Even though most will be born in what are now developing countries, by century’s end these billions of people will have benefited from significant economic growth (as will those who already live in the developed world) and perhaps their now-emerging nations will have joined the ranks of modern economies.

These two facts alone mean that if we all we did was rely on today’s technology, the Earth’s population in 2100 would emit many more times the greenhouse gases than we do currently. And yet if we’re to tackle global warming we need reductions of 50-80% from current levels. Do the math and you’ll see that there are only two options: massive increases in technology or massive reductions in material living standards. This essential conclusion is inescapable (with one major exception--see below).

Technological innovations can come in many forms, including more fuel-efficient cars, greener buildings and new renewable energy sources. It makes sense to investigate whether the types of policies currently on the table are really the best at helping to promote innovations in these areas. We also need to think more creatively. For example, should prizes for discoveries play a bigger role? How can we best support the development of technologies that don’t even yet exist (but which history tell us will surely be a part of the mix)?

And we need to determine which policies can have the most direct impact on shifting consumption patterns. Along those lines, many experts have suggested that a reduction in per capita consumption of animal products might be extremely helpful.

Here’s why. When the price of carbon (and other scarce resources) is factored into the price of animal products, these staples of modern life will become much more expensive; as a result people’s ability to purchase them will likely decline sharply. Whereas most people would feel poorer if they couldn’t vacation as much or own as many playthings, they might come to realize that eating fewer animal products was in fact a blessing in disguise: it would dramatically reduce greenhouse gas emissions and improve people’s health as well.

I know that some might look at this as a reduction in living standards. To me it’s a win-win we could all look forward to.

Jason Scorse

Recently, Japan, Norway, and Iceland announced that they plan to dramatically increase the scope of whaling, extending it to species that currently aren’t hunted. Upon learning this I experienced a strong sense of anger and frustration. Part of this was due no doubt to my recent trip to Hawaii and the opportunity I had to get up close to Humpback whales, which are now slated for slaughter by the Japanese. These magnificent creatures pose no threat to humans, are highly sentient (their famous songs are as complex as symphonies), and every year take part in the longest migration on the entire planet.

After I called the Japanese, Icelandic, and Norwegian embassies, and sent out emails to my friends urging them to do the same, I took a moment to examine my strong reaction to this news. At a time of genocide in the Sudan, the ongoing carnage in Iraq, and the continuing AIDs epidemic, was the intensity of my feelings misplaced? Was I falling prey to the charge often leveled against environmentalists, that they care more about animals than about people? It took me some time to wade through my emotions; here’s what I’ve concluded:

1. In some ways I have become desensitived both to the cruelty that is an everyday phenomenon in today's world and to my inability to do much about it. But if this is so, then why did I react so strongly?

2. Part of the intensity of my feelings likely stems from the fact that it is some of the richest countries in the world that are killing the whales; this killing isn’t necessary for their survival, or even a major component of their well-being. The Japanese are actually the worst offenders; under the guise of “scientific research” they harvest whales and subsidize whale meat in order to increase domestic consumption, and seem more motivated by nonsensical claims of “cultural imperialism” than on actually wanting to support local industry. In short, for the offending countries, the whale industry is either a ridiculous extravagance or an expression of political stubbornness by those who want to cling to old traditions that fly in the face of moral progress.

3. Another part of my frustration flows from the simple calculus of how easy or difficult certain problems are to address. Of course I would choose to end the AIDS epidemic over preventing whaling, but the former is infinitely more difficult. Ending whaling would literally be as simple as getting a few of the outlier nations to agree to stop it. And there is no opportunity cost of such an action; ending the slaughter of whales would not decrease the ability to cure AIDs. In fact, all of the effort now being expended to prevent whaling could be used instead for other causes.

4. On some level environmental issues such as the slaughter of whales (or dolphins, lions, tigers, elephants) are highly and importantly symbolic. The prevailing ethic on the planet is that animals exist for nothing more than to satisfy human desires; they have no worth of their own. Beside the fact that this ethic is arbitrary, and in my view immoral, I think it feeds into a larger worldview that leads to continual conflicts over the Earth’s natural resources: conflicts which are at the root of most major wars (if the Middle East weren’t home to the world’s biggest oil reserves, we would not be in Iraq today). While ending whale slaughter won’t turn us into eco-friendly societies overnight, the adoption of more enlightened environmental policies sometimes hinges on the cumulative effect of many seemingly small victories.

In summary, there are dozens of problems deserving of our attention, and perhaps some of the energy spent on environmental causes would be better spent on directly ending human suffering; but in the end, the moral deficiencies that lead some to shoot elephants for sport, others to kill whales, and others to kill people are more intimately linked than many of us probably realize.

Jason Scorse

I have not seen Al Gore’s new movie, but I have seen videos of some of his slide presentations that were the inspiration for the film. I don’t want to wade into the science of global warming, but one thing that I think the film gets wrong is that there is a scientific certainty that the effects of global warming will be catastrophic; it is a possibility, but there is no consensus on this point. Regardless, most sensible people believe that we should begin decreasing greenhouse emissions in order to reduce the chance of catastrophic effects.

The major criticism that has been leveled at the movie is that it is short on actual solutions, as well as actions individuals can take to reduce greenhouse gas emissions. That’s surprising since there’s a very simple thing almost everyone can do that would have a major impact on greenhouse gas emissions: eat fewer animal products.

British physicist Alan Calverd has calculated that if everyone switched to a primarily plant-based diet we could cut greenhouse gas emissions by 21% because of all the energy that goes into animal agriculture, in addition to the methane emitted by the animals (which is orders of magnitude more powerful than CO2 at trapping heat in the atmosphere). To put things in perspective, that’s more than four times the 5% reductions called for in the Kyoto Protocol . The 21% reduction is such a startlingly high number it’s amazing that it has not received more press; even more amazing, it is rare to hear anyone even mention the link between diet and greenhouse gases.

The reason, of course, is that people don’t like being told that their habits have negative consequences for society, especially habits as personal as dietary choices. I have witnessed this firsthand whenever the environmental benefits of moving in the direction of vegetarianism come up in conversation (apart from the animal rights issues); people often get defensive and resort to anecdotes about unhealthy vegetarian friends, their own inability to contemplate a day without meat, proclamations that we are at the top of the chain for a “reason”, that we need meat to be healthy, and without fail the question “but how would I get protein?” Although the irrationality of the majority of these comments surprises me, their root cause does not. People don’t like hearing inconvenient truths. But the person of reason must look beyond personal biases and focus on the facts.

The facts regarding animal agriculture aren’t pretty. Just as many environmentalists (and those who care about our oil dependency on Middle Eastern despots) look with incredulity at people who drive Hummers and other huge SUVs, so too could you look with incredulity at people who every day consume hamburgers, bacon and other meat products; these people are engaged in equivalent behavior with respect to the environmental impacts. In fact, the marginal benefit of switching from your average compact car to a hybrid is significantly lower with respect to reducing greenhouse gas emissions than switching from an animal-based diet to a plant-based diet. There are also myriad other environmental benefits of reducing meat consumption, including less use of pesticides, water, and fertilizer, less soil erosion and less sewage pollution.

Some people point out that the source of the problem is that animal agriculture is based on feeding grain to livestock. They argue that feeding grass to livestock is actually efficient, because livestock are the only animals that can digest grasses and turn them into protein. They are correct, but a couple of significant caveats weaken their arguments. First, there is no way that grass-fed animal agriculture could come close to providing the quantity of meat that is currently consumed. The price would be significantly higher, and the system would still lead to significantly more greenhouse gas emissions than from plant-based agriculture (due both to animal manure and to the energy required to refrigerate meat). So in the final analysis, while changing the way we produce meat could certainly make a significant contribution to reducing greenhouse gas emissions, only a major reduction in overall meat (and dairy) consumption would lead to dramatic reductions. The best part is that these reductions would not only not be costly, they would probably save us money and could be accomplished with existing technology: an amazingly rare win-win situation that stares us in the face.

Because meat-eating is so much a part of the American psyche, it is doubtful that you will see many politicians, environmentalists, or climatologists speak out encouraging people to transition to a plant-based diet in order to combat global warming. Let’s be frank: in our macho culture meat is (wrongly) associated with virility and strength. In addition, the animal industry lobby is powerful; like all agricultural lobbies in this country, its power is vastly disproportionate to its share of GDP, mostly due to the perverse realities of the electoral college. This is unfortunate because moving away from our reliance on animal foods would not only help to dramatically reduce greenhouse gas emissions, it would have tremendous health benefits as well.

Jason Scorse

(Mother Jones is running a great series on the ecological destruction we are inflicting on the world’s oceans. This piece takes some of their arguments a step further.)

In environmental economics, much of the theory and many of the policy applications involve areas in which people’s individual choices have negative environmental consequences (“negative externalities” in econ-speak) for society at large. Individual freedom is sometimes pitted against the general social welfare because so much of what we consume and the ways in which we live have broad consequences for regional environments and the global ecology. One area where environmental policy faces particularly challenging problems is the harvesting of fish and seafood.

The oceans are for the most part the world’s preeminent “open access” resources; that is, resources where there are few if any property rights, and where anyone with basic equipment can enter an industry and participate. This has led to the so-called “tragedy of the commons” scenario in many parts of the world where people over-fish and fisheries become severely degraded or completely collapse. Economists have advocated creating property rights systems in which fishermen (and women) share quotas that are set and enforced at sustainable yields; this gives fishermen economic incentives to preserve the resource for the long-term, instead of getting as much fish as possible before someone else does. These systems have had some success in the U.S., Canada, Iceland, New Zealand, and other regions. As an environmental economist I should be applauding these successes and pushing for more of them (which I do).

But it is not so simple. Even these programs hide a disturbing fact that most people do not want to acknowledge: commercial fishing is an inherently ecologically damaging industry no matter how well it’s done.

No matter how good the technology, or how conscientious the fisherman, catching fish in large numbers almost always includes killing marine mammals, tons of fish that are not economically viable, and severely damaging fragile underwater ecosystems. Farmed fish are no better since the farms rely on wild fish as feed for the farm-raised varieties. In addition, with so much fishing taking place thousands of miles from shore in areas that are essentially impossible to monitor, environmentally nefarious practices are commonplace. Add to this the many instances of acute environmental damage perpetrated by fisherman (e.g., shark finning, the wanton killing of sea otters, pelicans, turtles, dolphins, whales, and other marine creatures who compete for fish) and one doesn’t have to be an animal rights activist to recognize that commercial fishing involves cruel behavior that is almost impossible to regulate. (Despite the similar damage and cruelty inflicted in other forms of animal agriculture, these are much easier to regulate since they are fixed, on land, and concentrated; the only thing stopping such regulation is the lack of political will.)

I often comment that if people actually saw what really went on to bring them the fish on their plates, they probably wouldn’t eat it. And when we finally recognize the extent of the damage we have done to the oceans in our pursuit of food, it will be viewed as a catastrophe that could’ve been avoided.

There are now seafood watch cards which indicate what types of seafood are harvested in a supposedly sustainable manner, and some fishermen’s groups are arguing for better practices. Nevertheless, the bottom line is that commercial fishing represents an tremendous burden on the ocean and the creatures that live in it.

The economist in me will continue to advocate for better management policies and incentive schemes to protect the ocean, because this is the sensible thing to do. But another part of me realizes that sometimes freedom means the conscious choice not to engage in certain acts, or indulge certain desires. This part of me will continue to use moral persuasion and reason to advocate that everyone give up eating fish and seafood from commercial sources (or even completely).

At the end of the day, regulation and public policy can only go so far (and should only go so far in free societies), leaving it up to us to take the final, perhaps most difficult, steps to protect the environment and the non-human world. Ultimately, only our individual choices, guided by our consciences, will lead us to a more expansive moral sphere where the non-human world is treated with greater respect and empathy. And the sooner we take a hard look and examine the chain of events behind the products we buy, the sooner we can end some of the most egregious forms of environmental destruction.

J.S.

Update: It seems like I sparked some debate at Patrick Henry College based on my piece from a couple of weeks ago (A Call for Conversational Intolerance). I look forward to seeing what they come up with and will keep you posted.

Jason Scorse

Climate change is real and human activity is partly to blame. That much is indisputable, but the question remains what to do about it. On one extreme you have environmentalists who call for a radical altering of the economic system to dramatically reduce carbon levels. Such a move, if done within a short time frame, would undoubtedly lead to a major world recession and diminish living standards for billions of people. On the other end of the spectrum is the belief that basically we should do nothing, as evidenced by the actions of the Bush Administration; any costs associated with addressing climate change are believed too high (for the moment at least).

Unsurprisingly, there is significant room for a middle position, which is the one I am advocating. While assessing the future costs of climate change as well as the costs of mitigating it are highly speculative and therefore imprecise, the underlying approach should still be premised on some form of cost-benefit analysis, at least to a degree. As always, arguments regarding economic efficiency (which is what CBA is) are not the end of the story; uncertainty and equity issues also come into play.

Before outlining my recommendations, it is important to note that currently the lack of political will at the federal level to treat CO2 as a pollutant (one of Bush’s broken campaign promises) has created confusion and litigation at the state level. Many state governments want to act on CO2 emissions but are limited in what they can legally do since the federal laws don’t explicitly classify CO2 as a pollutant under the Clean Air Act. California, which is the only state that has authority to enact its own more stringent air quality laws (because it passed legislation before the federal statute) is being sued by car manufacturers because it has proposed significant curbs on future CO2 emissions. At the same time, California along with seven other states and New York City have sued the nation’s top CO2 emitters in order to force them to make mandatory cuts in CO2 pollution. Only with leadership at the federal level can we get out of this mess.

Below are my recommendations for moving forward on U.S. climate change policy from the top down:

1. Set a target for modest CO2 reduction a few years in the future that will then gradually decrease to levels that scientists believe will dramatically reduce catastrophic risks by 2050 (i.e. a 30-50% reduction)

In a recent report put out by the Bush Administration regarding its “Clear Skies Initiative” it is shown that a large segment of U.S. industry could already reduce CO2 for as little as $1 a ton, which is much lower than previously believed. This should serve as the wake up call for those who have been arguing that modest reductions in CO2 will cripple the U.S. economy.

The best way to begin to substantially improve the efficiency of CO2 reduction is by creating permanent incentives to do so. Accompanying a cap in CO2 in the near future (reflecting say a 5% decrease from current levels) should be the establishment of a CO2 trading system which would immediately create an economic value for CO2 mitigation, as well as carbon sequestration. As the caps on CO2 decrease over time, this economic value would increase and create even greater incentives. American ingenuity is up to the task of mitigating CO2 but the economic incentives need to be in place to help move the process forward.

2. Work to mitigate the likely effects of climate change

Since some level of climate change is already occurring and is only likely to accelerate, policies should be aimed at helping the world adjust to these changes. This is one area where I think the environmental movement should take the lead. Here are some specifics:

2.1 The U.S. should work with other nations to expand and monitor the world’s biodiversity hotspots and other large natural corridors so that wildlife can have space to migrate as the climate shifts. Much of this work would also include reforestation of deforested areas and ecosystem restoration more generally. It will cost a good deal of money but climate change presents a unique opportunity since addressing it will also bring myriad other environmental benefits such as the preservation of habitats and species, and all the environmental services the world’s unique ecosystems provide.

2.2 As the country that is most responsible for the current loads of CO2 in the atmosphere, we should establish an international relief fund for climate-related disaster relief and mitigation. Many island nations are going to face enormous costs as the sea levels rise and the industrial countries have a moral responsibility to help them cope. In addition, if it is demonstrated that increased hurricanes and floods are due to the impacts of climate change then we also should increase our aid for this reason as well. Some of this money should be directed to the development of technologies that can help people adapt to rising sea levels, such as the new floating architecture being developed in Holland.

3. Probably most controversial (but necessary) is a significant increase in the CAFÉ standards for car fleets

Critics of such a move claim that higher fuel efficiency means smaller cars means more dead soccer moms. Despite evidence that large SUVs are actually less safe than sedans and compacts (because they roll over more frequently and kill more people they hit), the belief that somehow car manufacturers are incapable of maintaining safety while improving fuel efficiency defies reason. The basic structure of the automobile has remained essentially the same for almost a century; close to 100% of the energy consumed by cars is used to propel the automobile, not the passengers. During the 1990s, with U.S. gas prices at the lowest levels in the world, hovering around the $.50 a gallon (in 2005 dollars) car manufacturers played to consumers’ desire for big cars by simply adding tons of steel. There was no economic incentive for manufacturers to take fuel economy into account.

In some sense this represents a tremendous market failure because not only is the burning of gasoline linked to climate change, but also to air pollution and our dependence on rogue regimes in the Middle East. The government has two options to correct this failure: either dramatically raise gas prices through taxes or mandate that car manufacturers start developing more fuel-efficient cars. Since even an increase of a few miles per gallon on the average American fleet would save billons of gallons of gas the latter option is more sensible. It too can be accomplished through a market trading system: manufacturers who want to continue to specialize in gas-guzzlers could pay more innovative companies to absorb their fuel efficiency requirements. Once again, such a move would immediately create a greater economic value for fuel efficiency and we can rest assured that firms would take advantage of it.

In summary, while everyone may disagree on the extent to which we should be addressing climate change we should be doing something, which we are currently not. I have not tried to justify my proposals with any detailed cost-benefit analysis nor assigned specific dollar amounts because those should be left to the many scientists and economists who are much more versed in the specifics than I. What I have proposed, however, are the outlines of a more comprehensive climate change policy. My guess is that the immediate positive externalities (cleaner air, increased wildlife, greater R&D, new hi-tech jobs, increased international goodwill) of addressing the future costs of climate change would be significant and would be well worth the investment.

Jason Scorse

As an ardent environmentalist, it may surprise you that I am not entirely sold on the hybrid revolution that has been initiated by the wildly popular Toyota Prius. Before I explain why, let me be clear that I think the Prius is a great car and there are many reasons to buy it independent of its fuel efficiency (e.g. it’s very quiet, it drives well, and who can’t appreciate the button instead of the key ignition?). The fact that the Prius is now somewhat of a status symbol while sales of Hummers have dropped precipitously is an unambiguously great thing.

The Prius (and other recent hybrids) are being touted as extremely fuel efficient and therefore, as an effective means of decreasing our dependence on oil and our CO2 emissions. Sales are way up and a wide variety of government-sponsored rebates for the purchase of “green” cars are currently in the works. The fact is, however, that hybrids are not really much more efficient than many conventional gas cars that have been around for decades. At this point, from a strictly environmental standpoint it’s likely that the added cost is not justified.

The Prius is listed at 60mpg city and 51mpg highway, but these numbers are for “ideal” conditions and are not realized in practice. I know two people who own a Prius and they get low 40s on the highway and mid-high 40s in the city (I’ve been told that the Honda Civics hybrids get slightly better mileage). While very good numbers, particularly when compared to SUVs, this mileage is not much better than for conventional compacts. Many Hondas and Toyotas get close to 40mpg and even a number of American brands get in the mid-30s. So for a Prius we’re only really talking about a 10-20% increase in efficiency over many other less expensive models when driving on the highway. While the city mileage is certainly better, people drive far fewer city miles, and there are many more public transportation options in cities. So the improvement in city mileage doesn’t cut into the bulk of gasoline demand, which is for highway commuting.

Let’s look at an average commuter who drives 12,000 miles per year. If we’re comparing a Honda Accord to a Prius the savings in gasoline is in the range of 30-60 gallons a year. A gallon of gasoline emits about 5-6 pounds of carbon and I’ll round that off to 10 since there’s also energy used in gasoline production. So that’s 300-600 pounds of extra carbon a year.

(Note: I am ignoring the possibility that once consumers purchase a highly fuel efficient car they may actually increase their amount of driving since it has now become cheaper, and therefore, cut into some of the CO2 reductions brought about by the higher mileage. Also, I am not taking into account the extra energy that goes into producing the lithium battery for the Prius and the CO2 that results.)

Now the question is: With the sticker price of a Prius roughly $4,000 more than a standard Accord with similar features is this a good deal for 600 pounds less carbon? (I’ll go with the high number)

(Note: while hybrid owners save money in gas they also have to pay a lot for battery replacements so I’m going to assume these costs and benefits cancel each other out.)

The way to answer this question is to determine how much it would cost to decrease CO2 emissions by an equivalent amount in some other fashion. One excellent way to accomplish this is by planting trees. Although estimating the precise amount of CO2 sequestration from trees is extremely complex, the amount of trees needed to annually absorb 600 pounds of carbon is very small; a tiny fraction of an acre.

So here’s my conclusion: If decreasing CO2 in the atmosphere is your primary motive it’s much more efficient to forego the Prius (and buy an Accord, Civic, or Corolla- perhaps even a used one) and spend the extra money on tree planting and the general preservation of open space.

This takes us to a general point on the issue of CO2 emissions that seems to have gotten lost in the larger debate these days. With such a focus on hybrids and the complete lack of political will to increase mileage standards (which is the most important thing we should be doing on this front) the role of forests in carbon sequestration is no longer at the forefront in the public’s consciousness (when was last time we heard about preserving the Amazon Rainforest?). This is unfortunate because not only do forests and open space decrease CO2 in the atmosphere, but they also provide a host of other environmental benefits (such as biodiversity preservation and watershed protection), and payment for these services can be an excellent way to help the poor in developing countries (although of course we can also plant trees here as well). Some amount of global warming is now inevitable and many species are going to need large areas to roam in order to adapt to the shifting climate; therefore, habitat preservation and expansion should be a top priority.

In addition, there are literally dozens of home energy conservation options (retrofitting windows, purchasing more efficient appliances, better insulation) that would cut down CO2 by as much as driving hybrids for a fraction of the cost. Unfortunately, much of the resistance to implementing these commonsense and relatively simple fixes is due to the shortcomings of human psychology; it’s much more sexy and feels more substantive to buy a hybrid car than to make basic home improvements.

None of this is to suggest that fuel efficiency and hybrid technology are not important; they are. People who are investing now in hybrid cars are fueling the demand, which will hopefully lead to successive generations of new technology that will have much higher mileage, perhaps even approaching 100mpg. When this happens hybrid cars will clearly be worth the added cost on every dimension. In the meantime, I recognize that what’s optimum from an economic standpoint is not always what’s politically or socially most practical; consumer trends and human psychology are powerful forces. That said, I think the money being spent on consumer rebates for hybrids would be better spent on direct public investments in R&D for hybrid technology, the protection and expansion of the world’s forests and critical habitats, and paying people to make energy conserving home improvements.

J.S.

*Thanks a lot to James Manley, Duncan Callaway, and Meredith Fowlie for their insightful comments and to Molly Norton for reminding me to write about this issue.

P.S. For a really good use of hybrids check out this article on NYC taxis.

Jason Scorse

Polls have consistently shown that Americans care deeply about the environment but this has not translated into sufficient action on the part of our leaders. It is time for a Presidential candidate to put forth a strong vision for environmental stewardship that favors conservation, the public interest, and long-term concerns over the whims of special-interest lobbyists, an over-reliance on free markets, and the overblown opposition of automakers and auto unions (remember, these are the same people who opposed seat-belt laws, didn’t believe Americans would buy compact cars in the 1980s, and are already falling behind the Japanese in the production of high-demand hybrids). Here’s what this new environment platform should emphasize:

1) Energy independence as the key to America’s long-term national security. Despite another major war in the Middle East and our growing awareness that a portion of the proceeds from oil revenue ends up in the hands of terrorists, Bush has proposed an energy bill which amounts to little more than a multi-billion dollar giveaway to the fossil fuel industries (a bill almost exclusively written by the companies in Dick Cheney’s Energy Task Force- which by no coincidence are many of Bush’s largest campaign contributors). It would do little to nothing to decrease our dependence on foreign oil and at a tremendous cost to society. We need to focus instead on moving toward an economy based on renewable energy and far greater energy efficiency. This would produce huge environmental benefits, and in addition could lead directly to millions of new jobs: a true win-win situation. It will also allow America to become competitive in the new energy technologies that will ultimately define the 21st century. Think of what the markets for these technologies are eventually going to be in places like India and China.

2) Environmental protection is a moral issue. All of us are stewards of the world we inhabit. No matter what God we believe in (or don’t believe in), it is our responsibility to protect Earth’s resources for future generations, and out of respect for the other forms of life with whom we share the planet. Environmental protection is the fundamental “pro-life” position.

3) Almost all natural resource subsidies are a lose-lose situation, and they must be stopped. Currently, U.S. taxpayers spend tens of billions a year paying farmers, ranchers, miners, and timber companies to exploit our environment, leading to large-scale pollution and destruction. Much of these are illegal under international trade agreements and often the subsidies are greater than the value of the resources on the open-market; signifying the height of inefficiency. The money saved by ending these subsidies could be used for environmental research, to support health care and education, or even for targeted tax cuts.

4) The Federal government should support the work of conservation groups who have identified biodiversity "hotspots" in their efforts to protect these areas before they are lost forever. These regions represent our evolutionary heritage and they are being lost at an alarming rate. It is not imperative that we save every square inch of natural habitat or that we reject economic development, but allowing the earth’s most biologically richest areas to be despoiled is bad for our own future as well as the species that are lost.

5) More than half of the nation lives in areas with poor air quality and addressing this situation should be a top priority. Many of these people are young children and the poor, who suffer from respiratory diseases at disproportionate rates, so this is an issue of basic fairness and justice. We are the richest nation on earth and this situation is more than an embarrassment, it’s a disgrace. Much of the improvements in air quality could be achieved within the larger issue of renewable energy technology and greater automobile efficiency.

6) Bush reneged on his campaign promise to regulate CO2 emissions as a pollutant but this is essential for seriously addressing global warming. Although there is still a degree of scientific uncertainty surrounding the “greenhouse effect”, the overwhelming majority of the world’s top scientists believe it merits serious concern and it is something we need to address sooner rather than later. Science will never give us exact answers nor perfect predictive power but uncertainty is no excuse for inaction.

Jason Scorse