On Singer:
I was worried at first where Singer was going with his policy recommendations. Knowing some of Singer's other beliefs (that everyone making over marginal utility, i.e. the median income, should give all excess to developing nations) I was curious as to what Singer would suggest to solve the global warming crisis. His suggestion was reasonable, establish a global carbon trading scheme based on per capita emissions. While such a policy would be difficult to implement globally, I feel it is optimal for three reasons.
1) A carbon trading scheme would incorporate market forces into remedying the current problem of social costs not being equal to private costs. As the Butler piece said, one way of rectifying pollution is to assign private property rights. The private property helps equalize the difference between the previously mentioned social and private costs. With the atmosphere this is a difficult task. A carbon trading scheme would implement so form of property rights through the use of quotas. Note, that this is an indirect method, though it is the most feasible. Accordingly, flaws will still exist and social vs private costs will not be fully equalized.
2) Carbon trading is probably the cheapest yet most effective way to help the environment. I say probably because the full effects of climate change have not yet been documented (and won't be until after the fact). This plan directly targets the negative externality, that is CO2, and minimizes spill over effects. That keeps costs low and forces firms and states to reduce CO2 and not necessarily industrial production, but rather those industries that are least efficient. I would much rather have a non zero sum game that forces all players to develop and innovate than wait and try to minimizes the global effect from climate change.
3) Such a system is the only practical solution for dealing with global warming. There are two possibilities in regards to human instigated global climate change:
a) we are causing it
b) we aren't causing it/it's not really happening
If b is true and we implement a trading system, what have we lost? Increased amounts of CO2 in the air. In essence, we have minimalized a pollutant. The pay off may not be that great to some, but consider the alternatives. We do nothing and global warming is in fact caused by humans. We are now forced to pay the costs of adapting to the new situation (To say nothing of the potential spillover effects in disease, agriculture, and insurance). The other possibility is that we implement a far more bureaucratic and draconian system. No matter what the circumstances, carbon trading seems to be the best option.
(On a side note, it is commonly said that countries who trade together, fight less. If so, I wonder what effect carbon trading would have on international diplomacy.)
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2 comments:
Dane,
I largely agree with you, and I suppose Singer too.
I think the main argument against the greenhouse gas emissions trading system other than concerns over its implementability, (thinking more along the lines of a national emissions trading system) would be that it would be too damaging to economic growth. However, as Stiglitz noted, the United States emits far more greenhouse gases per unit of GDP than its European and Japanese (Niponese) counterparts, so whatever reduction in short term economic growth would probably have even less of an impact on the US, since the costs of reducing emissions is probably less. And though Europe and Nipon have probably experienced some reduction in short term economic growth, their people still have high standards of living and are still experiencing economic growth.
Of course, ideally it would be neat to have a global trading system similar to what Singer envisioned, but I'm still not quite sure how that would work. For now, the US has to get on that Kyoto protocol. After the US climbs aboard Kyoto, maybe the world nations can start planning a more comprehensive scheme that addresses the developing countries.
Mr. Stutts,
While I agree that it may be difficult to implement such a scheme, that does not mean we shouldn't try.
On this issue of economics growth, the Economist recently came out with an article that fighting climate change would only require about.1% of total world G.D.P. And while that figure would likely be substantial, I believe it pales in comparison to the costs of taking no action.
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