Sarah Palin vs. Logic (cause and effect, without the cause)

I wasn't going to post this, but she repeated this argument at the debate last night.

Andrew Revkin at the "Dot Earth" blog, has some analysis on Palin's views on global warming and their potential effects on policy.

If you disagree with the mainstream-liberal position on global warming (global warming is real, is caused by man-made CO2 emissions, and requires urgent public action), there are three positions you can take:

• The scientific evidence linking CO2 emissions to warming is weak, thus reducing CO2 emissions would have no benefit
• Global warming is real and is man-made, but we are already too far down the path to stop it now, thus reducing CO2 emissions would be too costly without actually mitigating the negative effects of climate change
• Global warming is real and is man-made, but it is more cost effective to raise living-standards in the areas that will be hardest-hit (particularly in the developing world) so people are better equipped to handle the effects of climate change (for more on this position, check out the Copenhagen Consensus)

Palin takes a different line of "reasoning":

Couric: Is [global warming] man-made in your opinion?

Palin: You know … there are man’s activities that can be contributed to … the issues that we’re dealing with now with these impacts. I’m not going to solely blame all of man’s activities on changes in climate. Because the world’s weather patterns … are cyclical. And over history we have seen changes there. But kind of doesn’t matter at this point, as we debate what caused it. The point is it’s real, we need to do something about it. And like … Tony Blair had said … when he was in leadership position, he said, “Let’s all consider the fact that it is real.” So instead of pointing fingers … at different sides of the argument as to who is to blame, and if nature just to blame, let’s do something about it. Let’s clean up our world. Let’s reduce emissions. And let’s go with reality.

I don't know if the last sentence is meant to be ironic. There's more to the interview (it's on the Dot Earth post cited above) and it's worth reading. But it's amazing to me that she has staked out a position that doesn't make any sense. She won't acknowledge that man-made CO2 emissions are contributing to global warming. But, as she says, it doesn't matter. Obviously, it does matter. You can't solve a problem if you have no idea what's causing it. That seems self-evident. But just to make this clear, I wrote a short, one-act play to illustrate the point. I call it, "Dr. Palin":

Scene opens in a doctor's office decorated with "Jesus is Lord" and "Hang in there Kitty" posters. A middle-aged man enters.

Man: "Dr. Palin, I've been experiencing chest pains."

Dr. Palin: "Oh, well we can all agree that something needs to be done about that."

Man: "So what do you think it is? Am I having a heart attack or is this just heart-burn?"

Dr. Palin: "Well, it doesn't really matter what's causing your heart pain. What matters is that we both want to treat it."

Man: "You're certainly a maverick, Dr. Palin, and your folksy, hockey-mom nature has really put me at ease."

Curtain opens on a darkened stage.

Narrator: Two days later the man died from a heart attack. Dr. Palin tells herself, "at least I didn't blink."

Fin

How about Morgan Freeman for the role of the Narrator?

SUVs and the Chicken Wars

People tend to focus on market failures and negative externalities when talking about carbon emissions. But we often forget the public policy decisions that got us to where we are today.

An editorial in today's New York Times tells the story of a forgotten trade war with Europe that started with a tariff on US chicken exports. In response, the US placed a 25% retaliatory tariff on German light trucks and kept the tariff after the trade war ended. The Times explains:

The chicken war ended, but the tariff survived. It explains a lot about why Detroit chose to stake its future on S.U.V.’s.

At the time, Detroit was not even dreaming of urban light trucks. But over the ensuing decades, they proved instrumental in the battle to fend off Japan’s hypercompetitive automakers. American carmakers retooled but still couldn’t come up with cars that Americans liked more. And they had Washington running defense: negotiating voluntary export restraints with Tokyo and pressing Japan to make the yen rise against the dollar...

Years of cheap gas (unleaded didn’t breach $2 a gallon until 2004) helped a lot — as did government tax breaks and looser rules on fuel efficiency and tailpipe emissions. Perhaps most important, Washington used the chicken tariff to wall off the light-truck market, giving American automakers a protected and profitable niche to exploit...

The downside of this is evident today. Light trucks account for 57 percent of sales at General Motors; 62 percent of Ford’s; 72 percent of Chrysler’s. It’s not a good place to be with gas at $3.50 a gallon.

Now, for American automakers and for the global climate, the chickens are coming home to roost (sorry, but I can't believe they didn't make that joke in the editorial. A little too on the beak?).

This story illustrates two important principles: (1) trade protection can, in the long-run, produce weak domestic industry that never manages to become competitive; and (2) public policy is subject to the law of unintended consequences.

We shouldn't take this to mean that all government action is negated by unintended consequences. But it should make us weary of quick policy solutions to complicated problems. It should also make us more vigilant to fight inertia in the policy system. It was easy to put the light-truck tariff in place; it was very difficult to get rid of it.

Maybe we should teach policymakers the same thing they teach med students: "first, do no harm".

Thomas Friedman on Alternative Energy

Here's Thomas Friedman talking about his new book and his views on global warming (here's the link from Environmental Economics):





I like that Friedman makes the following points:

1. According to the best information, Global Warming is real and requires action
2. This is a problem that can't simply be solved by government throwing money at it.
3. The price of gas does not reflect the environmental impact of carbon emissions

The issue with number 2 has to do with both incentives and scale. As far as incentives go, government spending is subject to political considerations, rather than efficiency or efficacy. Government mandates and subsidies for corn-based ethanol, for example, have more to do with the political power of the argibusiness lobby than the potential for ethanol to replace petroleum. And we've all seen how that's worked out.

Beyond incentives, there's the issue of scale. Obama, for example promises to invest $150 billion of government money over the next ten years in alternative energy research. That's a good start, but it's only $1.5 billion per year. Exxon-Mobile alone invested $80 billion in oil exploration between 2002 and 2006, or $20 billion per year. There's plenty of private money out there for alternative energy research, if only there was an incentive to invest it...

That's where number 3 comes in. While the political debate has focused on the price of gas being too high, many economists and environmentalists think that the real problem is that the price of gas is to low. As the price of a commodity goes up, people use less of it, try to make more of it, and try to find a cheaper alternative. Probably the best way to make this happen is to place a tax on carbon emissions, so that the environmental impact of using fossil fuels is reflected in the price.

Politically this is a no-go. American families are hurting from inflation and what may or may not be a recession. A candidate promising higher gas prices probably would get less votes than a Mike Gravel/Dennis Kucinich ticket. However Ted Gayer, writing in the American, makes the case more palatable for voters:

The harmful effect on labor supply can be at least partially offset by using the revenues collected from the pollution tax to reduce inefficient taxes. For example, the revenues can be used to lower marginal income tax rates, or perhaps to lower the deficit (which amounts to a future income tax reduction). Economists don’t like to see benefits go to waste, which is why Mankiw’s Pigou Club Manifesto highlights the pro-growth tax component of “an increased reliance on gas taxes over income taxes.”

Revenue from a Carbon Tax could also be used to offset a reduction in payroll taxes. That way we create a disincentive to pollute and an incentive to work. This is good for the environment and good for the economy, and could be enormously popular if properly sold. Any candidate interested?