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Thoughts on global warming

In addressing climate change, China has a unique opportunity to assert its rising global leadership role, as well as moral authority, writes George A. Akerlof.

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Let me start with a few statements to indicate where I am coming from.

First, the theory and evidence that I have seen all seems to strongly suggest that human-related emissions of carbon into the atmosphere is causing, and will in the future cause, significant global warming.

Second, this global warming is on such a scale that it will wreak havoc on both poor and rich countries.  It could even make large sections of the earth uninhabitable.

Third, the costs of abatement are large.

Therefore the decision to curtail emissions is a very serious one and it is clear that these decisions will also cause hardship in poor and in rich countries.

Fourth, despite these high costs, the time has passed that policy makers should still be acting on the null hypothesis that global warming will not occur.

Choice of null
 

Here I come to the first use of economics.  It turns out that this point is central to current US policy. As I see it, current US policy is that the Federal Government should do continued research to ascertain the extent of global warming and its future path and the  policy tree is to take future action only if the findings of this research are sufficiently conclusive.

In the event of the findings being sufficiently conclusive,  we should take serious corrective action to curtail our own emissions and also to participate in international treaties regarding abatement of emissions.

An alternative null hypothesis—that global warming is already occurring—could be the basis of our policy. Were that to be the case, this alternative hypothesis would cause our policy to be very different : in this case we should be taking active steps now to curb emissions and to participate in international treaties to curb it.

Which of these two null hypotheses guides our policy should be determined by the relative costs and benefits and the relative probabilities of the two hypotheses.

The losses from failing to address global warming if it does occur are truly enormous. Even more serious, the effects are also irreversible. In contrast, the losses from addressing global warming, if it does not occur or if it is not very serious, are not enormous and the losses from addressing the problem  are only very large. In addition, it seems that the likelihood of global warming with serious impacts on large segments of the planet seems now to be very high.

If we add up the relative economic costs and benefits and weight them by their respective probabilities, that seems to show that we should definitely be acting on the presumption that global warming is going to occur.

The unavoidable conclusion is that the current US administration and the US Congress have made the wrong call.

We should be acting to curb it and we should be engaging in international co-operation to do so. And even those who have very serious doubts about whether global warming is occurring should still believe that we should be taking precautions against it. 

Economic remedy

The second topic that I want to address is how we should fight global warming.

Economic theory gives a simple natural way to fight global warming, which is to have escalating taxes on carbon emissions. There is a simple reason why this is the ideal remedy : carbon emissions into the atmosphere constitute a nuisance to everybody on the planet.

People should be taxed to pay a penalty equal to the value of the nuisance that they cause. In this way people who value their emissions more than the nuisance they cause will make those emissions and they will  pay the tax. People whose emissions are not valued as much as the nuisance they cause will curb them and will not  pay the tax. Thus with such a tax, emissions will be curbed insofar as the nuisance they create exceeds their benefits.

The economics here is as simple and straightforward as economics ever gets. It would be hard to find any economist who would disagree.

It may also be worthwhile noting that this may be one place where economists’ judgments may be different from that of other professionals.   We economists tend to  be fairly optimistic about the effects of prices or taxes on people’s behavior. So the size of the tax necessary to reduce these emissions may be large, but perhaps not extremely large.

The reason for that is that we think that over fairly long periods of time that people are fairly responsive to changes in prices. In addition, there will be substitution of nuclear and other non-carbon forms of electricity generation.

Steve Chu’s talk gave some indication as to how large these taxes would have to be to get important shifts even with current technology to carbon-free generation of electricity.

With a carbon-tax people will switch to smaller and more fuel-efficient methods of transport. With sufficient time for innovation and a tax that is sufficiently high there will be other innovations as well. There are also possible innovations in carbon sequestration.

A further recommendation from standard economics is that there should be large-scale government support for research into new technology that will reduce carbon emissions.

However, this research must be supported by incentives to develop such technology further and put it in place.

But it is important to note that the new technology will not and  cannot be successful unless the appropriate incentives for its use are put into place : you may create the most beautiful inventions, but  unless it pays people to use them, they won’t.

So we need a carbon tax or something like it to provide such incentives.

Finally, because much of the use of energy involves networks of people who are doing the same thing, initial technologies may need some extra push from governmental subsidy and governmental regulations.

Thus the economics of what should be done is fairly simple --  sufficiently simple, in fact,  that it can be easily taught as an application of standard economic principles in a first-year undergraduate course. But it turns out that getting people to follow these economic principles is very difficult indeed.

I have seen this at first hand at Congressional testimony given by my wife, who was the Chair of the Council of Economic Advisers from 1997 to 1999. It was her job to represent the economic case of the Clinton Administration as to why the Congress should support the Kyoto Treaty.

The Congress-people were not willing to vote for this because they felt that the costs of supporting Kyoto were too high relative to the benefits. In a nutshell they were afraid that their constituents would rebel against the increases in the prices that would accompany reductions in carbon emissions called for in the Kyoto Accords.

The moral basis of policy

In retrospect I think that the argument for the carbon tax has been pitched in the wrong way and at the wrong level.

The Clinton Administration framed its argument in terms of costs and benefits, but instead, the issue of global warming needs to be phrased in moral terms. Phrasing it in moral terms  should also be the stance for international agreements.

The morality of it is fairly easy : if somebody does not do anything about global warming, the climate of the earth is likely to change drastically, with severe harm to future generations. Carbon emissions are the cause of this global warming. Therefore it is immoral for any country, any industrial entity, or any person to contribute more than her fair share to this nuisance.

It is like a case of stealing. By adding more carbon to the atmosphere than our fair share, we are taking more than what rightfully belongs to us. We should not feel entitled to that any more than we would feel entitled to enter uninvited into our neighbors’ house and partake of the dinner sitting on the table for their family.

Whether or not we should do that is not a question of costs and benefits and even less should it be a question of our costs and ourbenefits.

It is a question of basic right and wrong.

 

 

Opportunity for China
 

I would like to make a suggestion to the Chinese delegation  regarding the stance that they should take toward global warming. I do not think that you should look to the United States to take the lead before you take your own stance on global warming. China is the rising economic star. China is also  the rising star on the stage of world leadership.

World leadership should be given not to countries because they are rich and powerful. It should be given to countries that have a moral commitment to do what is humanitarian and right.

Global warming is one such area. It is an area where the US especially has abdicated what is right for what is expedient. This is an opportunity, perhaps at not even very great cost, for China to assert its moral authority.

It is a good place to begin the assertion of world leadership that China will increasingly take as this century progresses.


George A. Akerlof is the Koshland Professor of Economics at the University of California, Berkeley and winner in 2001 of the Nobel Prize for Economics. This article is taken from a paper Professor Akerlof delivered to the China/US Climate Change Forum in Berkeley in May 2006.

 

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评论 comments

Default avatar
匿名 | Anonymous

经济学的解决办法

更多关于经济学的解决办法、成本和益处的内容,以及运 用二分法来妨碍人们理性的讨论气候变化是多么的不明智:

“……这很明显不是二选一的问题,一种适合人类居住的 气候条件是人类从事其他活动的前提。全球变暖是基础问题,不能和其他问题相提并论 ……”详见

http://unspeak.net/C226827506/E20060702145138/index.html

Economic choices

More on economic choices, costs and benefits, and how false dichotomies are used to hinder rational debate on climate change:

"...this is evidently not an either/or problem. A habitable climate is a precondition for humanity's being able to address other problems. Global warming is an infrastructure problem, which cannot be lined up on an equal footing with others..."

http://unspeak.net/C226827506/E20060702145138/index.html

Default avatar
匿名 | Anonymous

评论

感谢这个网站,真是太棒了.

comments

Thank you for running this website, it is really good.

Default avatar
匿名 | Anonymous

强烈支持

全球变暖是我们在未来会面对的一个严肃问题。我们必须非常严肃的加以对待。有很多办法可以延缓全球变暖的加速,例如:你可以骑车而不开车,(你可以)用环保塑料袋等等可回收的东西

strongly support

global warming is a serious issue that we'll face in the future.
we have to take it strongly serious.
there's lots way to reduce the global warming to speed up eg:u can ride bike instead of a car.
use the environmental plastic bag.....
recylable stuff.

Default avatar
匿名 | Anonymous

支持

这是个全球问题,需要我们每个居住在唯一的这个地球上的人们来共同思考、共同解决。为了保护我们的家园,尽我们所能来降低大气层的二氧化碳含量,以防温度继续攀升。

support

This is a global issue, it need everyone who stay on the only earth to consider it, solve it together. In order to protect our home, we do as many as we can to reduce the carbon dioxide in the atmosphere to stop the temperature rising.

Default avatar
匿名 | Anonymous

说到不如做到

曾经看过戈尔总统关于global worming的一场演讲,是他让我了解到global worming的危害性.他已将自己大半生的精力致力与环保方面的工作,那么作为新世纪的接班人我们应该义无返顾地挑起这历史赋予我们的重任.正所谓"天下兴亡,匹夫有责".

Deeds are better than words

I have once watched a lecture by president Gore. It is he who let me understand the harm of global warming. He has spent more than half of his life in environmental protection. As his successors in the new century, we have the obligations on this important task endued by the history. Just as what they say: Everybody is responsible for the rise and fall of the world.

Default avatar
匿名 | Anonymous

这是一个道德层面上的问题

很同意阿克尔洛夫的这个观点,这是一个道德层面上的问题。世界上的人那么多,有的人会自觉维护地球的环境,就总会有人只看见利益而不顾对环境的破坏。对于这些势利的人通过税收的办法来减轻起对环境的破坏可能真的会行之有效。
但对于中国,这必须建立在严密的法律约束和严肃的公众监督之下。否则,增加税收只会演变成又一个危害中国弱势群体的工具。
因为中国现阶段并不都是有法可依,执法必严,违法必究,有太多的人情关系在里面,从这个层面上,税收在现阶段还是不要推行的好。
所以,实现税收的前提的确属于道德范畴。
以上仅是个人观点,如果错了还请各位网友指出。
Juliet

This is a moral issue

I agree with Akerlof that this is a moral issue.

Among such a huge population on this planet, some have a conscience of responsibility to protect the environment, whilst others only care about their interests and ignore possible impacts upon environment.

Taxation might be helpful to ease the environmental impacts by those snobbish people.

As far as China is concerned, strict law enforcement and strong public supervision are crucial to guarantee effective taxation. Otherwise, taxation will become a tool to damage the interests of the weak group.

Currently in China, law enforcement is not entirely efficient due to low-level corruption, especially favouritism between family members, friends, and other contacts.

Under China's current situation, it is better not to promote taxation. Personally, I think the preconditions of taxation are moral issues. My opinion is open for any comments and criticism. Juliet

Default avatar
匿名 | Anonymous

这需要共同努力

全球变暖已成为人类关注的焦点,它严重的影响了人类的正常生活,甚至危害了生命的延续,这需要我们共同努力才能避免这世界性的灾难!让我们联合起来,一起努力,从小事做起,从自身做起!

We need to cooperate

Global warming has been such a hot issue. It affects our normal life greatly, even threatens the next generations. All of us need to make efforts to avoid the global disaster. Let's unite and attend to our own behavior.

Default avatar
匿名 | Anonymous

环保

我们只有一个地球,我们应当爱护好我们共同的家园!!!

environment protection

We have only one Earth. It is our duty to protect our home!!!

Default avatar
匿名 | Anonymous

严重的问题

全球变暖比我们能想象到得更严重。我是个学生,最近刚刚完成了一个有关全球变暖的化学项目。现在,我的同学们对这个问题越来越关注。--- Mendy

A Serious Problem

Global warming becomes more serious than we could imagine. I'm a student, and I just finished a chemistry project about global warming recently. Now, our classmates concern about this problem more and more.
Mendy

Default avatar
匿名 | Anonymous

有必要实行严格的条规

我认为, 更有效的解决方式必须依据法律和公共的意识。我们都知道,中国的道德观念包含着和睦的持续性。这些都能够领导全球更进一步。然而,这是相当抽象,我们需要一些明确的改革。某些时候,形式和意义都一样的重要。

strict law enforcement is necessary

In my opinion,the more effective solvation should base on the law and public supervision.As we all know,china has mang the moral rules which contain the harmonious and the continuance .All of that can lead the world to be better.however,it is abstract,we need some specific reforms.Sometimes forms is as important as contents.