Response to Matt Yglesias’ challenge

A recent post by Matt Yglesias challenged the libertarian community on their seemingly anti-market approach to global warming:

For basically Popperian reasons I don’t think it makes sense for political pundits to spend a lot of time debating the relative difficulty of developing different hypothetical future technologies.  Instead, I would just say that the best way to find out whether human ingenuity is better at keeping atmospheric CO2 concentrations at a sustainable level by developing artificial trees or by developing better windmills is to . . . implement a binding emissions reduction scheme that puts a price on CO2 emissions.

This isn’t, in other words, an either/or choice. If you had a cap-and-trade system in place, that would put a range of modalities””better efficiency, more clean energy production, more trees & algae, and carbon-scrubbing machines””in a competitive framework. One assumes we’d be looking at some kind of mix. But defining the correct mix in advance seems very hard. Hence the appeal of a basically market-esque mechanism that creates incentives to work on these various ideas without unduly prejudging the appropriate level of investment in speculative technology.

What I think is remarkable is the extent to which people on the right, in their zeal to avoid a market mechanism that the business establishment happens to hate, have a tendency to talk up what instead amounts to a kind of Five Year Plan approach. Instead of regulating carbon, let’s just direct scientists of invent miracle trees! Let’s turn the sky red!

I like his argument, so I am going to take the challenge.  But first let’s diagnose the problem and come up with the right pricing policy.  I’m going wager that Matt’s friends in the environmental community won’t like the outcome. 

Global warming is a complex problem, but much (not all) of the negative externalities flow from the fact that activities such as burning fossil fuels and eating beef tend to cause the Earth to warm up.  Global warming isn’t just a name given to the problem; for all intents and purposes it is the problem.  CO2 is one of many factors contributing to global warming.  (Yes, I know that ocean acidification is also a problem, I’ll come back to that issue later.)

So if we are going to put a price on activities that impose external costs, the first best solution would be to calibrate the tax (or subsidy) to reflect the impact of each activity on global temperatures.  As an example, assume the best estimates are that each one degree rise in global temperatures causes $1 trillion in economic damages.  In that case the tax should be $1 for each one-one trillionth of a degree that your activity warms the Earth, and vice versa for subsidies.  Non-economists might be throwing up their hands, thinking there are so many uncertainties that we could never come up with such a number.  But all the other proposed solutions such as carbon taxes and “cap and trade” face exactly the same uncertainties.  This post is aimed at the environmental community, not right- wing skeptics who favor doing nothing (although those skeptics may like my conclusion.)  In any case, trust me, the uncertainty argument will not be a fatal flaw in the eyes of the brightest people on the other side—people like Matt Yglesias.

Another issue (and this is important) is the distinction between marginal damages and average damages.  A tiny increase in temperature might be much more costly if global temperatures have already risen to an uncomfortable level, than if the Earth is still fairly cool.  So the tax/subsidy might be adjusted over time according to the severity of the problem.  And here is my claim:  If we set up this entirely rational system of pricing the externalities contributing to global warming, the optimal carbon tax may fall almost to zero.  The reason in one word: geoengineering.  If geoengineering schemes costing $250 million can lower global temperatures by one degree, you’d have companies like Exxon-Mobil building tubes to the heavens in northern Alberta so fast your head would be spinning.  Remember the flip side of taxes of $1,000,000,000,000 per degree of warming is subsidies equally large for technologies that cool the Earth by one degree.  The success of geoengineering would dramatically reduce the benefit from carbon reduction measures.  You say the tubes might not work?  Maybe, but there are lots of other ideas as well.  Believe me, with that sort of subsidy these firms would find a way to get the sulfates up into the stratosphere.

If you’ve been following the dust-up over the Levitt/Dubner piece on geoengineering, you might have noticed that many skeptics in the environmental community call the idea speculative, unproven, that sort of thing.  Is that really true?  Well let’s go back to the basic model of global warming, the one we’re told has been shown to be true beyond the shadow of a doubt.  There are really only three important elements that we need to focus on.  These are reflectivity, radiative forcing, and albedo.  In other words, the Earth’s temperature is positively related to the amount of sunlight that doesn’t get reflected back into space from particles in the atmosphere, the amount absorbed by the earth (more in dark areas) and the amount that bounces back to Earth after interacting with greenhouse gases.  So it’s a fairly simple model, although of course there are many complexities that make exact prediction difficult.  But here is my point, the way geoengineering works (which is to increase the atmosphere’s reflectivity) is one of these three basic factors, just as important as greenhouse gases, indeed probably even simpler to model.  So if we really are sure that these scientific models are right, that greenhouse gas emissions are warming the earth, then we are equally sure that geoengineering will “work.”  I find it interesting that the same environmentalists who are so sure that we know exactly how to slow the warming of the Earth by restricting greenhouse gas emissions, suddenly seem so unsure about what would happen if more sulfates were injected into the stratosphere.

Now let’s return to the issue of ocean acidification—the tendency for higher CO2 levels to makes the oceans more acidic, which could destroy the earth’s coral reefs.  Geoengineering doesn’t directly address this issue.  Is this an argument against my tax/subsidy scheme directed at global temperatures?  Not at all, rather it suggests that we need two markets, a carbon market and a temperature market.  So the environmentalists are back in business.  Except there is one little problem; so far they have put most of their eggs in the global warming basket, not ocean acidification.  To the extent that they have scared the public (in a good way) into supporting their efforts to reduce greenhouse gases, it has been mostly by showing the dire consequences flowing from a warmer planet—such as rising sea levels.

So in response to Matt Yglesias’ challenge to us libertarians, I say that in all probability geoengineering is the free market solution.  Indeed at first glance it is surprising that it hasn’t already occurred.  There is no law against it, and $250 million is pocket change for someone like Bill Gates or George Soros.  Of course if someone actually tried, there would very quickly be a law against it.  But with temperature pricing there would be no obvious reason to outlaw it.  And if you pass a law against the sulfate approach, they’ll start spraying water vapor into the air in northern latitudes, increasing cloud cover.  So none of those horrible red sunsets.

As an affluent person who enjoys snorkeling and likes nature more than people, I would be happy to see the world spend a lot of money reducing CO2 levels.  That is my private “special interest.”  But I don’t think I could sleep at night if I were to oppose geoengineering.  I am pretty sure that the average peasant in India and China has far more to gain from the aggressive use of fossil fuels, plus geoengineering, than they do from making it easier for me to fly to Palau on a jet (gobbling fuel) so that I can snorkle in beautiful coral reefs.  I hope I lose this battle, but as a good utilitarian I am going to use this blog platform to push two issues over the next few years.  One you already know about; a forward-looking monetary policy targeting NGDP.  And my second obsession will be a global tax/subsidy scheme based on the impact of various activities on global temperatures.  Not all activities, the gain isn’t worth the effort, but those activities that have a significant impact on the climate.

And here is my wager.  Even though the logic of the temperature tax/subsidy is even stronger than second-best policies like carbon taxes, and even though the environmental movement strongly supports carbon taxes, I predict they will oppose this idea.  I believe that many in the environmental movement are not utilitarians, and will be able to sleep at night putting a pristine environment ahead of the welfare of 2 billion rural Asians struggling to escape the grinding poverty of the countryside.

HT:  Tyler Cowen



35 Responses to “Response to Matt Yglesias’ challenge”

  1. Gravatar of pireader pireader
    20. October 2009 at 16:40

    “[T]he same environmentalists who are so sure that we know exactly how to slow the warming of the Earth by restricting greenhouse gas emissions, suddenly seem so unsure about what would happen if more sulfates were injected into the stratosphere.”

    I suspect those environmentalists are pretty certain that the sulfates would reduce global warming. But they’re very uncertain what else it might do … what portions of the planet would lose how much warming, where all that sulfur would end up, etc. It’s a lot harder question than estimating the effect of NOT adding to the planet’s load of greenhouse gases.

  2. Gravatar of Bob Murphy Bob Murphy
    20. October 2009 at 17:15

    Oh Scott, I was so happy that I could finally agree with your wonderful logic…until you concluded that governments need to massively fund temperature reduction. (That’s what you’re saying, right?) Just as a thought experiment, tell us what would happen if governments sat back and did nothing. E.g. if there is so much “money on the table,” would insurers of coastal property etc. find it in their interest to pay to avert catastrophe?

    Also, Scott seems to be taking the standard “internalize the externality with a tax” line summarized here, but I have a fairly recent journal article that questions this approach. (I realize I may be misreading Scott, since at one point he suggests the optimal carbon tax might be close to zero–but then I think he goes on to say this is because the government will fund geoengineering projects?)

  3. Gravatar of Bob Murphy Bob Murphy
    20. October 2009 at 17:16

    Oops I placed the hyperlink in the wrong part of the sentence; I am linking to my article, not to Scott’s blog post…

  4. Gravatar of ssumner ssumner
    20. October 2009 at 17:33

    pireador, I don’t think there is any great mystery as to what geoengineering would do, at least no more mystery than carbon reduction. We’ve already had in artificial “experiments” thanks to Mt. Pinatubo, etc.

    Here’s another example of the double standard. Some people have proposed painting black tarpaper rooftops white. That changes the albedo of the earth. Why is that not “tinkering with Mother Nature” just as surely as geoengineering and carbon reduction? And yet those proposals are not opposed by anyone (as far as I know.)

    Regarding where the sulfates would end up, there is no big mystery there. One of the beauties of geoengineering is that it takes a surprisingly small amount of material. This is because it stays up in the stratosphere for a much longer period of time than sulfates in the troposphere. So although there would be a bit more acid rain, that effect could be offset at fairly low cost by enhanced pollution controls places like China. It is certainly not a dealbreaker.

    But I do think you hit the nail on the head, they will use this amorphous argument, for fear coral reefs won’t be persuasive enough.

    Anyway, I hope you’re right.

    Bob, My plan wouldn’t cost the government anything in net terms, the taxes and subsidies could be set up to balance out (as with cap and trade.) And I anticipate the price would immediately plummet, so the actual amount of dollars involved in taxes and subsidies would be very small.

  5. Gravatar of Bob Murphy Bob Murphy
    20. October 2009 at 17:56

    I won’t put in another self-serving link, but on my blog I came up with the solution: The Fed creates trillions of carbon-eating dollar bills.

  6. Gravatar of StatsGuy StatsGuy
    20. October 2009 at 19:21

    This is worth reading:

    (via Rortybomb):

    Rorty also hit on the notion that having a second-best option makes the first best option less likely.

    Back to your post: there are three problems with your idea (which is admittedly creative):

    1) Who measures? In essence, to create a market in “temperature”, we have to be able to measure the impact of different activities on temperature. Once a price is set, he-who-measures is he-who-determines-payment. Lovely mix of scientific uncertainty, economic rewards, and political influence.

    2) There’s the issue of side effects. The advantage of carbon mitigation is that we have a better shot at anticipating (and reducing) side effects – things like severe droughts in Africa, ozone depletion, etc… Described in the links. The descriptions seem to go well beyond bleaching of the coral reefs.

    3) You presume that the enviro-version of utilitarianism seeks to maximize _human_ utility. This is not the case. Many place nature, and particular aspects of nature, objectively above human utility. (By objectively, I mean that sanctity of nature has a value that is exogenous to human utility directly derived from nature.) When I donate to NRDC, I am making an explicit decision that the lives of starving children (of which millions die a year) are less valuable than the lives of orcas (of which there are only a few thousands left). Human life is cheap – particularly uneducated human life on a crowded resource-limited planet. Utilitarianism and humanitarianism are not automatically consistent.

    One can call this cruel, and inhumane – but no more inhumane than ANY decision we make on allocating resources. That F-22? At $200 mill a pop, it could provide clean drinking water to 40,000 villages for a few years (if you believe Medicine Sans Frontieres – and yes, I irrationally donate to MSF too).

  7. Gravatar of Andy McKenzie Andy McKenzie
    20. October 2009 at 20:48

    Scott, I would love for you to push this platform on your blog for the next couple of years. Since you have a quant but non-specialist background, your discussion of the actually climate science would be of service too. I’ve tried Real Climate but they so often inundate you with graphs that you can’t understand to scare you away. For example, your paragraph on reflectivity, radiative forcing, and albedo was money.

    One question though. When you say that you couldn’t sleep at night, do you mean that literally? When I read Three Cups of Tea it said that Greg Mortenson literally couldn’t sleep because he knew all those children in Pakistan weren’t getting good educations. Is that true of you too? I hope it’s not, as a utilitarian myself. You, Scott Sumner, not sleeping, won’t do the world any good.

  8. Gravatar of ssumner ssumner
    21. October 2009 at 03:56

    Statsguy, Thanks for the critiques. I may do a post responding to them. On the first list of 20 objections there is only one that seriiously worries me–the risk of regional drought. But even there I would argue that in an increasing globalized economy where even countries like India have enough money to buy food in international markets, that problem is much less severe than the likely global warming we will get with or without the Copenhagen treaty. And I don’t know the science well enough to know how serious that problem would be. What if the sulfates were injected evenly all over the world, not in one place like Pinatubo?

    Most of the other objections are either overblown (acid rain, ozone, etc) avoidable with alternatives like artificial clouds and/or trivial in importance, or the same problem would apply to carbon reduction (getting Russia to agree a cooler earth is better) or mostly avoidable if the problem is scaled up gradually (say 1/10 degree per year, so that it can quickly be withdrawn if bad side effects develop.)

    The logic of Rorty’s piece is that we should move now, so if any side effects are present we can go back to carbon reduction before it would lead to a sudden spike in Earth temps. Rorty is wrong about moral hazard, moral hazard only applies if you assume it is a bad policy, more costly than carbon reduction.

    The measurement issues are precisely the same as with carbon abatement. Carbon abatement requires estimating how much each activity causes atmospheric CO2 to rise, how much higher atmosheric CO2 affects temps, and how much economic loss results from higher temps. My plan requires exactly the same. We could even use the implicit estimates in the current program. Take the IPPC estimates for the link between CO2 and climate, find out the implicit cost of global warming in the proposed carbon abatement policies, and apply the same logic to temperature taxes. No additional assumptions would be necessary, you’d just be deriving implications of current policy.

    I disagree on utilitarianism. Or perhaps I should say I define the term differently. I focus mostly on human welfare, plus perhaps that of animals with feelings. A more general “love of the earth” is not utilitarianism as it is usually defined.

    Utilitarianism does not require that affluent people give most of their money to charity, unless we can find out a way for income transfers to actually help the poor. But after 50 years iof failed foreign aid programs it is pretty obvious that we still haven’t figured that out. Clinton ended “welfare as we know it” precisely for utilitarian reasons. Yes, some modest charities do help, and it is appropriate that people donate to those charities, but utilitarianism doesn’t require the sort of massive income transfers that naive philosophers might assume. That is, philosophers who know little about incentives and secondary effects.

    That critique helped me though, I need to refine my argument for geoengineering.

    Thanks Andy. Yes, I can sleep despite problems in the world. I meant I couldn’t sleep if I knew I was knowingly pushing policies that would hurt billions of people.

  9. Gravatar of Daniel Kuehn Daniel Kuehn
    21. October 2009 at 04:07

    RE: “The same environmentalists who are so sure that we know exactly how to slow the warming of the Earth by restricting greenhouse gas emissions, suddenly seem so unsure about what would happen if more sulfates were injected into the stratosphere.”

    I wouldn’t take the side of an environmentalist that rejects geoengineering out of hand – I’m intrigued and convinced by the idea. I think the point is that if you really do trust markets, you don’t just point to geoengineering and say “I think that’s what we should do”. You internalize the costs of carbon and let the market decide if that’s the right thing to do. There are no uncertainties about what geoengineering will do to temperature – there are uncertainties about what else it will do.

    You point out that there is a lot of uncertainty in setting a carbon tax, and I’d agree. But ultimately we know the “right” tax isn’t zero. So why don’t we just institute a moderate tax and proceed cautiously. I completely buy your uncertainty concerns. I just think that if we know the negative externality of carbon exists but we don’t know exactly what it is, failing to introduce a carbon tax is definitely sub-optimal. Instituting a carbon tax only might be sub-optimal. But if we keep it modest – if we low-ball all the estimates of the cost of carbon – there’s a high likely that even if it’s still sub-optimal it’s less sub-optimal than having no tax at all.

  10. Gravatar of Paul Johnston Paul Johnston
    21. October 2009 at 05:33


    Unless I misunderstood Scott’s argument and your first paragraph, that is exactly what he wants to do. He is saying the markets will decide that geoengineering is best.

  11. Gravatar of ssumner ssumner
    21. October 2009 at 06:05

    Daniel, See Paul’s reply. Also, I agree that a carbon tax makes sense. But I think a temperature tax does as well. At least a modest tax on temperature. In my newest post I argue we shouldn’t rush into geoengineering, but rather should proceed cautiously with small initial tests. A small temperature tax/subsidy could allow for these modest experiments. So we aren’t far apart. Yes, by all means, let’s proceed cautiously.

  12. Gravatar of Daniel Kuehn Daniel Kuehn
    21. October 2009 at 06:10

    Paul –
    But don’t you see the irony of just declaring that?

    Geoengineering risks the same sorts of negative externalities that climate change does. Scott is entirely right to point out our uncertainty in pricing that externality, but I don’t think that means that we put all our eggs in the emission reduction basket. I don’t see anyone proposing that. A carbon tax could result in people continuing to emit carbon AND embrace geoengineering. Or continue to emit carbon and embrace living quarters and farming methods that deal with warmer temperatures. We don’t know what the market will embrace. But the most efficient bet is to try to internalize the costs of things like carbon AND geoengineering and see what we come up with – not jumping the gun and declaring one method the winner.

  13. Gravatar of Daniel Kuehn Daniel Kuehn
    21. October 2009 at 06:15

    Paul –
    I just read the beginning and skimmed through the rest of scott’s response to statsguy – and this is really all I was trying to say. Geoengineering has negative externalities associated with it as well. So does carbon emission.

    I’m personally skeptical about declaring a winner right now. Geoengineering MAY be chosen by the market, or it may not. And even if it is chosen by the market that doesn’t necessarily make it good (after all – pumping CO2 into the atmosphere was chosen by the market too!).

    I suppose this pro-market/anti-market approach is just besides the point when externalities come into play.

    The bottom line is that we need to properly weigh costs and benefits of a host of different options. I don’t think we can do that by ignoring externalities, and I don’t think we can do that by declaring one solution as a winner from the start. I DO think that’s fundamentally where scott is coming from too – I just wanted to put a little bit of resistance up to his earlier enthusiasm for geoengineering.

  14. Gravatar of lxm lxm
    21. October 2009 at 06:50

    Ever hear of Rube Goldberg?

    I’ve noticed over the years this conversation about global warming has been going on that economists, in general, have seemed particular reluctant to grant any merit to the AGW crowd. For a long time denial was the word of the day.

    So I see your suggestions about geoengineering solutions as a significant step away from just general denial. It looks like you might be in the bargaining stage.

    I don’t have any problems with geoengineering solutions, per se. But I don’t see them as complete solutions. It seems to me what you would be doing is ‘curing’ a heroin addict by subsidizing his heroin rather than getting him off the drug. He might not be stealing anymore, but he’s still an addict. If the world is warming due to certain human activities and you don’t change those activities, then you really haven’t solved the problem. You’ve just allowed the harmful activities to continue a while longer until it all comes crashing down.

    I see discussions of geoengineering solutions in the broader context of more conscious human management of the global environment in all its aspects. If we have the power to affect the global environment, then we better start learning how to manage it before we destroy it. Sure we got billions of people trying to escape grinding poverty today, but we got even more billions not yet born. What will we leave for them?

    Just for the record, I offer no solutions. So you are far ahead of me there. And your combination of geoengineering and a temperature tax is not a bad place to start.

  15. Gravatar of manuelg manuelg
    21. October 2009 at 08:29

    lxm’s comment put it much better than I could have written.

    I agree with your (S. Sumner) analysis that a carbon market will probably be insufficient. Methods of direct interventions for temperature decrease and ocean alkaline should be convertible to purchase on the carbon market.

    Minor comments:

    > … geoengineering is the free market solution. Indeed at first glance it is surprising that it hasn’t already occurred. There is no law against it, and $250 million is pocket change for someone like Bill Gates or George Soros.

    This is true, but this gets into the realm of James Bond Super-villainy movie plots. Who can support anyone who can gain access to $250 million of working capital to “geo-engineer” like Christopher Walken drilling near the San Andreas fault in “A View to a Kill”?

    > …putting a pristine environment ahead of the welfare of 2 billion rural Asians struggling to escape the grinding poverty of the countryside.

    This is tacky, and demonstratively insincere. I wouldn’t risk 2 thousand people stubbing their toes for a “pristine environment”, but it would not take much rise in ocean levels to devastate coastal communities and coastal infrastructure and investment. If you talk about “2 billion rural Asians”, people can call you out, personally, to ask how much you, personally, would be willing to sacrifice to help them. Otherwise it is a cheap rhetorical trick. At least the tree-huggers have some modest willingness to sacrifice (annoyingly they ask others to sacrifice more, but that is typical of the well-meaning but mushy-minded).

  16. Gravatar of Paul Johnston Paul Johnston
    21. October 2009 at 08:49


    Yea, I kind of got the feeling you didn’t read the whole thing, but wanted to give you the benefit of the doubt. Scott does consider externalities with geoengineering if you read the whole thing and from what I understood, he doesn’t see too many.

    With regards to this comment: “I don’t think we can do that by ignoring externalities, and I don’t think we can do that by declaring one solution as a winner from the start.”

    Without sounding super snide (I am a bit tired), are you suggesting that we come up with ideas without analyzing what the results would be? I would hope we would have some clear picture in mind of the result, instead of the “well this sounds good, lets see what happens” mentality.

  17. Gravatar of ssumner ssumner
    21. October 2009 at 09:32

    Daniel, Let me reframe my argument this way, and then see what you think. I am claiming that if we set up a proper pricing system, pricing both carbon and temperature external effects, the environmentalists would oppose the system. They would fear that geoengineering is much more cost effective than carbon reduction.

    lxm, I see my solution as kicking the can down the road a few decades until China and India are much richer, and clean technologies are much more technogically advanced. And then we can solve what you call “the problem” much more cheaply. I am very pessimistic that the developing countries are going to go low-carbon in the near future.

    manuelg, You said:

    “> …putting a pristine environment ahead of the welfare of 2 billion rural Asians struggling to escape the grinding poverty of the countryside.
    This is tacky, and demonstratively insincere. I wouldn’t risk 2 thousand people stubbing their toes for a “pristine environment”, but it would not take much rise in ocean levels to devastate coastal communities and coastal infrastructure and investment.”

    It may be tacky, but your response doesn’t follow from what I proposed. I am proposing geoengineering precisely to prevent coastal flooding. So you can hardly use that argument against my proposal.

    Paul and Daniel, My newest post discusses some of the possible externalities. I have to admit that I am not an expert in this area, but in principle any externalities from geoengineering should be priced into the tax/sudsidy scheme.

  18. Gravatar of q q
    21. October 2009 at 10:01

    @ssumner: the environmentalists … would fear that geoengineering is much more cost effective than carbon reduction

    i am not so sure. i think that peoples’ attitudes are more malleable, and they would adjust to it if it were a real possibility.

    at the very least some environmentalists would be more flexible than others and so there would be effects at the margins.

    if the problem you perceive is that environmentalists would sense their research funding would get cut, well, that wouldn’t happen with geoengineering. if the human race is taking responsibility for macroenvironmental variables, we’ll need all the smart modelers that we can produce.

    i think also that you (and many on the right) are attributing more cohesiveness, coherence, and power to ‘the environmentalists’ than exists in the real world. in practice environmentalist ideas have been pervasive — in that people have been exposed to them en masse — but not particularly persuasive — in that people have not made significant changes due to these ideas.

  19. Gravatar of q q
    21. October 2009 at 10:03

    > I see my solution as kicking the can down the road a few decades until …. clean technologies are much more technogically advanced

    why do you think clean technologies will advance?

  20. Gravatar of Martin Unsal Martin Unsal
    21. October 2009 at 10:07

    “I find it interesting that the same environmentalists who are so sure that we know exactly how to slow the warming of the Earth by restricting greenhouse gas emissions, suddenly seem so unsure about what would happen if more sulfates were injected into the stratosphere.”

    There is a fairly obvious reason for that. Restricting greenhouse gases is returning the variable that we (humans) have perturbed back to its prior value. We know what happens in the steady state when there is less CO2 in the atmosphere: it’s called the past, we lived through it. Allowing CO2 to continue accumulating in the atmosphere while injecting enough sulfates to counteract it is changing two variables at once, considerably beyond the levels that we have any direct, long term experience with — volcanism hardly compares with the scope and duration that geoengineering would require. We cannot possibly pretend to know what all the side effects will be. Ocean acidification is one; another is that sunlight will be globally more diffuse; the consequences of these changes alone are unknowable, not to mention other side effects we can only guess at. We would be using the Earth as a laboratory to test our hypotheses in climate science. All of humanity would have to live with any negative repercussions for decades if not centuries until we could finally return the atmosphere to the known-good geophysics in which humans and our societies evolved.

    I do like the idea of a perfectly omniscient regulator who could tax or subsidize based on the effect on global temperature. I would add the wrinkle, however, that the omniscient regulator also enforces liability claims against climate tinkerers. If your scheme has a side effect which brings about economic harm, compared with a historical baseline, you pay the cost. I’m not so sure Exxon-Mobil would be quite so enthusiastic to start plumbing the stratosphere under those terms. Whereas those who reduce their CO2 emissions have nothing to fear from liability claims.

  21. Gravatar of ssumner ssumner
    21. October 2009 at 11:15

    q, I disagree about the reaction of environmentalists. I think they would almost all oppose my idea if there was any serious chance of it being adopted (which there isn’t.)

    I certainly do not overestimate the influence of envirnmentalists. Indeed one reason I think we should consider geoengineering is that because they have relatively little influence, I don’t expect carbon abatement to be as effective as it needs to be.

    q#2. I’m not sure, it just seems like there are constant improvements in technology. And with the recent push toward carbon abatment, I would expect these technologies to continue to improve. I also think higher gasoline prices will spur demand for plug-in hybrids. I have no idea how far the technology will advance.

    Martin, I understand your point, but it doesn’t explain why we are constantly reassured that there is no doubt that human CO2 emissions will warm the planet over the next 100 years. How can there be no doubt, as you yourself indicated that we haven’t actually done this before, at least to this scale? So if we don’t have enough science to do geoengineering, how can we argue that the global warming model is no longer a hypothesis, but has now been proven beyond any doubt? That same model says geoengineering will work.

    And why do you assume that if we removed the CO2 that we have emitted that things would return to the staus quo ex ante? In the 1970s many climatologists feared we were entering an Ice Age. Perhaps if we removed all of that CO2 the Ice Age many were predicting would actually begin. And then were would we be? there are risks to anything we do. A cold planet is much scarier than a warm planet.

  22. Gravatar of Martin Unsal Martin Unsal
    21. October 2009 at 12:07

    Scott, there certainly is doubt concerning anthropogenic global warming. Most climate scientists believe that the risk now outweighs the uncertainty to the point where we are morally obliged to take at least the conservative step of reducing CO2 emissions. For an economist to expect more precision from climate scientists is hardly fair; economic models do not provide point-forecasts for the future either, yet economists can justly hope to influence policy.

    I do not expect that removing all the atmospheric CO2 we have emitted since the Industrial Revolution would return us precisely to the environmental state of the 19th century. If I could wave a magic wand to remove all that CO2, I am not certain that I would. However, if you do accept AGW as a thesis, then I don’t see how you can fail to conclude that reducing CO2 emissions is the lowest risk path toward abating climate change. (In the unlikely event that we induce excessive planetary cooling, it’s not that hard to start emitting CO2 and methane again. In any case, the only variable we are tweaking is the one we inadvertently perturbed to begin with.)

    I am not addressing cost here; my point is merely that geoengineering is environmentally riskier than reducing CO2 emissions, not that the risk necessarily outweighs the fact that geoengineering is cheaper. All I ask is that geoengineering proponents acknowledge that they have a risk/benefit analysis to do, because their solution is in fact riskier than CO2 abatement.

  23. Gravatar of ssumner ssumner
    21. October 2009 at 14:49

    martin, There are enormous risks to reducing CO2. Not to you and me, but to to poor people in India and China. If we adopt a low carbon economy at the world level, there is a strong possibility that it could sharply reduce the growth rate in the developing world. Coal is currently much cheaper than the alternatives.

    And even if geoengineering is riskier than CO2 abatement, my response is that that extra risk should be incorporated into the cost/benefit analysis, and hence the temperature tax/subsidy regime. It is not like risk is the only thing that matters. We are currently doing genetic engineering research that we hope will cure diseases. But there is also a very real risk that we will create a deadly virus that is transmited as easily as the common cold, but would kill 50% of the people it infected. We are willing to accept that risk as a society, in the hope that we will get improved health care. In my view the risk of geoengineering, especially is scaled up gradually, is trivial by comparison.

    So I don’t disagree with the logic of your argument, I just think that if we made a reasonable adjustment for estimated risk, we’d stil end up combining geoengineering with carbon abatement. BTW, I absolutely agree that carbon abatement is the logical long run solution, and I expect it will occur eventually, but geoengineering is a good stopgap until cost effective carbon abatement technologies are ready to carry the full load. Until then we need both, a carbon tax and a temperature tax. Maybe we should just do a little geoengineering, but the optimal amount is certainly not zero.

  24. Gravatar of Martin Unsal Martin Unsal
    21. October 2009 at 15:21

    Great summing up, Scott, and I agree completely.

  25. Gravatar of Bababooey Bababooey
    21. October 2009 at 16:34

    Most climate scientists believe that the risk now outweighs the uncertainty to the point where we are morally obliged to take at least the conservative step of reducing CO2 emissions.

    Fortunately no scientific subspecies rules the world. Whatever they’ve concluded can make its way into the political sphere where decisions are made consensually. Economists, geoscientists, statisticians, engineers, lawyers, and elected officials, among others, can argue about the relative costs and value of mitigation, countermeasures and adaptation.

  26. Gravatar of q q
    21. October 2009 at 17:57

    @ssumner, i don’t know if they would, as a class, reject the idea in the long term. i’m sure many environmentalists would be suspicious of the idea and many would never give it any consideration. but that doesn’t mean the matter is settled in the longer term.

    the problem with generalizations like this about classifications of people is that on one hand classifications of people aren’t rigid and on the other hand people change their opinions over time when new options open or they soften their opinions in response to bribes / quid pro quo and political pressure.

    the fact that you (and myrvold and levitt/dubner) are making these kinds of generalizations indicates that you aren’t going to be the best emissary for the idea.

    but that’s not to say the idea is permanently dead.

    someone like brad delong who on his blog stated that geoengineering was worth investigating and probably worth doing to some as yet to be determined extent (along with other strategies) would probably be a better salesman.

  27. Gravatar of ssumner ssumner
    22. October 2009 at 04:25

    Thanks martin.

    I agree bababooey.

    q, You are right that DeLong would be a much better saleman. BTW, the same is true of monetary stimulus–Krugman and DeLong would have been much better salesmen, (more credible to Obama) but I couldn’t get them interested. I’m glad to hear DeLong is is somewhat interested. And to be honest, at this point I think nothing more than a very samll geoengineering experiment is justified. And not just now, but for at least a decade or two we should not do very much geoengineering. So I imagine our views are quite close.

  28. Gravatar of luke luke
    22. October 2009 at 18:31

    are you kidding:
    “I am pretty sure that the average peasant in India and China has far more to gain from the aggressive use of fossil fuels, plus geoengineering…”

    just wait until your geoengineering stops the monsoons for a few years and those starving peasants will just love that they can continue to burn fossil fuel.

  29. Gravatar of ssumner ssumner
    24. October 2009 at 04:18

    luke. I know of no evidence that geoengineering will stop the monsoons. Is it theoretically possible? Sure, just as it’s theoretically possible that removing CO2 will trigger another Ice Age. I seem to recall that some people believe that droughts will occur if we don’t do geoengineering, as everyone agrees that CO2 levels will rise for quite some time, whether we do a Copenhagen Treaty or not. So you could also turn the argument around and say we need to do both. Which, by the way, is what I am proposing. I do favor a carbon tax, even with geoengineering.

  30. Gravatar of q q
    24. October 2009 at 04:31

    my feeling is that (at least) krugman was more interested in the impression that superfreakanomics was going to give than in the actual text. he probably feels that spreading these ideas in this way is harmful. he doesn’t feel that the public at large can handle a complex policy discussion on global warming. he may feel that many of the most influential readers are going to skim the book or read the headlines and so he is criticizing the book at that level.

    krugman spends some time as a media critic (taking on fox and so on) and his response here is more consistent with that role than with his role as a scientist or economist.

    i remember in 1982 or so when the liberal musician bruce springsteen wrote a song called ‘born in the USA’ which was very disparaging of this country but which had a headline chorus that was appealing to patriots and conservatives to whom it became a kind of anthem. that kind of thing, by analogy.

  31. Gravatar of Doc Merlin Doc Merlin
    24. October 2009 at 23:39

    Historically, large scale drouts are associated with colder global temperatures not hotter ones.

  32. Gravatar of ssumner ssumner
    25. October 2009 at 06:38

    q, That’s a good point. My view is that we need to trust the public. Give them correct data, not hiding previous scientific errors, and hope for the best. I don’t believe in propaganda, so it doesn’t bother me that some of their points seemed to cut against global warming. I did criticize the 2% of CO2 from humans figure, which was very misleading. And I guess others have said their solar panel discussion was misleading. But the global cooling story was fine.

    Doc Merlin, I don’t know the science very well, but I suppose it makes sense as warmer weather would cause more water to evaporate into clouds. I’m sure there are regional differences to consider as well.

  33. Gravatar of Ceaser Ceaser
    26. October 2009 at 08:06

    People know how the world with low carbon rate in the atmosphere is. People don’t know how the world with increased atmosphere’s reflectivity is. People are afraid of the unknown.

  34. Gravatar of luke luke
    26. October 2009 at 18:33

    In India, rainfall levels might severely decline; the monsoons rely on temperature differences between the Asian landmass and the ocean, and sulfur aerosols could diminish those differences substantially.

    this is the first i’ve heard of you supporting a carbon tax. good. now let’s actually try to get one instituted.

  35. Gravatar of ssumner ssumner
    27. October 2009 at 16:06

    luke, Even with low carbon levels there have been big fluctuations in temperatures. A big eruption in Indonesia like 1815 could easily lead to a year without summer, and produce huge crop failures. That would be less likely to occur with the sea spray version of geoengineering. So there are risks either way.

    BTW, I addressed all of the points in that article in a more recent post.

Leave a Reply