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voteLast week in Asilomar, California, at a meeting sponsored by the Climate Institute, experts of various stripes gathered to discuss the future of geoengineering. Wikipedia describes geoengineering as efforts “to deliberately manipulate the Earth’s climate to counteract the effects of global warming from greenhouse gas emissions.” (Many scientists regard the term “climate engineering,” or CE for short, as a more accurate description.) As at all expert gatherings, one heard some very insightful things, and, one also heard some things that were, well, perhaps not so insightful.

Proposals to subject CE experiments to some form of global-scale participatory democracy fall in the latter category. At the conference, some versions of the idea were voiced more stridently than others. Essentially, though, all these demands rest on the same logic. CE, were it to be tested, might affect climate everywhere. Climate impacts everyone; so everyone should have a voice. No one would trust most Third World governments to protect the interests of their citizens; thus some means, it is claimed, must be found to assess the global general will.

As a matter of practical reason, this line of thought is faulty. About 40 percent of the world’s population, mostly those in very poor countries, has not even heard of climate change; therefore, insisting on proof of global informed consent as a precondition for testing CE amounts to saying that CE can never be tested—exactly the outcome that some may want, but not necessarily the one that best serves the interests of the people in whose names the demand is being made.

Further, governments of the more industrialized states have concrete obligations to their own peoples. The U.S. Constitution enjoins our government to promote the general welfare, and the context is clearly a national one. A U.S. government that allowed abstract notions of global informed consent to block action needed to protect Americans from harm would soon find itself out of office—and rightly so.

At the same time, post–World War II history also makes clear that Americans, all else being equal, prefer to achieve their own ends in ways that further those of other nations. Then too, growing global interdependence acts to reinforce U.S. interest of the wealth, stability, and welfare in other nations. It impels other open societies in the same direction. In effect, trade, linked markets, and mobile populations broaden the definition of enlightened self-interest.

This incentive for advanced states to take a broad view suggests one of the insightful things said at Asilomar. Ambassador Richard Benedick proposed that about 15 major world powers should manage large CE tests—and perhaps eventually deployment. Managing CE will entail many choices, and, as knowledge grows, it will be necessary to frequently fine-tune the system. Expectations and interests will differ, and bargaining costs may be high. With too many players, the process could easily grind to a halt. The major states, by virtue of their power to act alone on CE, automatically have a voice in CE decisions, and the far-flung nature of their interests ensures that many of them would pay heed to the risk of ill effects—wherever they might occur.

Limiting active control of CE to those states that already have the de facto power to affect outcomes would deprive Third World kleptocracies of the chance to halt progress in hopes of exacting more bribes—one of the pathologies prominent in the current UN climate policy framework. To be sure, control by the major powers will likely be imperfect, but, then again, locking the world into a CE stalemate pending arrival of global-scale Periclean democracy seems to be an even less appealing option.

Image by John Morton.

An expert panel of distinguished economists, including three Nobel laureates, has found that, among the possible approaches to reducing harm from climate change, R&D on solar radiation management (SRM) technology is likely to offer the best ratio of benefits to costs. According to the panel, R&D on marine cloud whitening was the single most promising use of resources, but R&D on aerosol injection also earned a “very good” rating. It was ranked third among the 15 specific options that the panel considered. Expert panel member and Nobel laureate economist Thomas Schelling said, “we found that climate engineering has great promise. Even if one approaches it from a skeptical viewpoint, it is important to invest in research to identify the limitations and risks of this technology sooner rather than later.” View the full results.

The expert panel was composed of Prof. Jagdish Bhagwati of Columbia University; Prof. Finn E. Kydland of the University of California, Santa Barbara; Thomas Schelling, professor emeritus at the University of Maryland; Prof. Vernon L. Smith of the Chapman University’s Argyros School of Business and Economics and the School of Law; and Prof. Nancy Stokey of the University of Chicago.

In all, the panel considered 15 options drawn from eight assessment papers. It considered options in climate engineering, forestry, adaptation, energy R&D, and technology transfer, as well as cuts in CO2, black carbon, and methane. For each policy area, at least one shorter paper critiqued the primary papers. The question posed by the analysis was: “If the global community wants to spend up to, say $250 billion per year over the next 10 years to diminish the adverse effects of climate changes, and to do most good for the world, which solutions would yield the greatest net benefits?”

The expert panel considered SRM options based on an assessment paper by Eric Bickel of the University of Texas at Austin and me. Papers by Roger Pielke Jr. and Anne Smith critiqued the Bickel and Lane analysis. The Bickel/Lane paper noted that the net benefits from SRM might amount to between $4 trillion and $14 trillion. The paper considered the use of SRM in conjunction with a number of hypothetical greenhouse gas control regimes. It found that poorly structured GHG control regimes would dramatically raise the benefits of an SRM option. (The paper suggested several factors that seem likely to cause actual GHG control regimes to fall far short of those that would be optimal.) The Bickel-Lane paper also cautioned, though, that various potentially harmful side effects might flow from SRM deployment. The scale of effects, it noted, could only be determined through a careful and systematic R&D program. It recommended no decision of SRM deployment be made until such a R&D program had been successfully conducted.

Lee Lane

What Will the Climate Bill Cost?

By Lee Lane

July 14, 2009, 1:34 pm

The proponents of the Waxman-Markey climate bill (H.R. 2454) claim that the costs of the bill are both very low and very certain. Alas, they are neither.

Two analyses, one by the Environmental Protection Agency and one by the Congressional Budget Office, appear to support the claim that the bill’s costs would be low. Two others, one commissioned by the Heritage Foundation and one done under the auspices of the Black Chamber of Commerce, find much higher costs. So much for the claim of cost certainty.

Moreover, a closer look suggests that both of the studies with lower cost estimates were structured in ways that biased them toward this result. For example, the EPA’s more detailed model of the electric power sector estimated significantly higher costs than those produced by its economy-wide model. Thus, a recent critique of the EPA model concluded:

EPA’s own analysis shows that ADAGE [the model used to evaluate Waxman-Markey] overstates CO2 reductions from the electric sector as compared with IPM, [EPA’s power sector model] at the same CO2 prices. Thus, if EPA had coordinated its IPM and ADAGE models to produce consistent electric sector results, we would expect that EPA would have found significantly higher CO2 prices for H.R. 2454. Given that EPA says the IPM model is more realistic for the near-term, one can conclude that its ADAGE-based near-term impact estimates are not realistic until they are made consistent with their IPM model projections.

The CBO cost estimate exhibits a different source of downward bias. CBO bases its estimates on international transfers and the resource costs of actual emissions reductions. Of the latter, CBO notes:

The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap. The reduction in GDP would also include indirect general equilibrium effects, such as changes in the labor supply resulting from reductions in real wages and potential reductions in the productivity of capital and labor.

Having conceded that these effects are part of the cost, CBO’s analysis then proceeds to ignore them.

In fact, these general equilibrium effects are important. That is why, in calculating total costs, economists use models that account for them; conversely, analyses that, like the CBO study, exclude these effects cannot claim to offer an account of all the relevant costs.

Thus, neither the benefits of the Waxman-Markey bill nor its costs are at all clear. The benefits certainly appear to be low, and the costs may well be high. Based on what we know, the bill hardly seems to warrant approval. The Senate, before it takes this particular leap in the dark, might want to consider means of assuring more cost certainty than is provided by provisions of H.R. 2454.

Lee Lane

A Necessary Climate Amendment

By Lee Lane

June 24, 2009, 9:53 am

Supporters of the Waxman-Markey cap-and-trade bill, H.R. 2454, want to restrict the amendments that can be offered to it. Politically, this is business as usual. As a matter of policy, this bill, which would impose rapid and costly cuts on American greenhouse gas emissions, needs amending.

One proposal that was offered during committee mark–up by Congressman Mike Rogers (R-MI) illustrates the point. The amendment mandates reports on Chinese and Indian greenhouse gas controls, and goes on to direct that “If the Administrator [of EPA] determines that China and India have not adopted greenhouse gas emissions standards at least as stringent as those set forth in this Act, the provisions of this Act shall cease to be effective.”

The more strongly one believes that climate change is a threat, the more urgent is the need for some version of this amendment. Ending the human contribution to warming would require completely halting net emissions, but with this bill, global emissions would grow rather than shrink. In effect, emissions growth in other countries will much more than offset the steep U.S. cuts. So, unless the United States can find a way to leverage the emissions cuts to be paid for by its citizens with those paid for by foreigners, the U.S. effort will have little impact.

The Waxman-Markey bill, though, would strip the U.S. diplomats of all leverage in the coming climate talks. Passing this bill would be like Congress repealing U.S. tariffs just before the opening of a round of trade talks or imposing unilateral disarmament in the run-up to an arms control summit. Countries do not act in this way because, if they did, other nations would pocket their concessions and offer nothing in return. This response is exactly what Waxman-Markey sets up.

If the bill’s supporters really want to limit global GHG emissions, they should embrace the Rogers amendment’s core principle: the stringency of U.S. emission controls must be tightly linked to the stringency of controls in China and India. Instead, a House committee defeated the amendment on a straight partly-line vote.

We should be clear, therefore, about what Waxman-Markey would do and what it would not. By boosting fossil fuel prices, it would lower the living standards of American consumers. At the same time, it would enrich owners of U.S. wind farms and nuclear power plants, as well as Wall Street firms engaged in trading emission allowances. It creates yet more agricultural subsidies, and will make work for regulatory bureaucracies. To advance the cause of curbing global GHG emissions, however, the bill would have to link U.S. controls to proof of serious effort on the part of China and India. Its supporters have made it plain that they intend no such linkage.


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