Math and Climate Policy

Global climate change is a global problem. Well, duh. Everyone knows this. Nevertheless, there is still a presumption that the United States should “do something” to manage the risks associated with greenhouse gas emissions, even if there is no international agreement. Thus, there have been significant policies, ranging from Corporate Average Fuel Economy (CAFE) standards to the Clean Power Plan (CPP), premised on the notion that it is important for the United States to reduce greenhouse gas emissions and reduce the climate change threat.

This suggests that it is a good time to review the facts, as has been nicely done by AAF’s Philip Rossetti. Most important, he notes that: “The United States has contributed the most to global warming historically, but the United States emits only a small share of current global emissions—about 16 percent of carbon dioxide and just over 14 percent of total greenhouse gasses—and that percentage is shrinking every year.” This reality strongly suggests that unilateral efforts to curb the emissions in the United States will have little long-term impact on the climate outlook. Moreover, the greatest growth in greenhouse gas emissions will occur in the developing countries.

This presents a real dilemma. Developing countries argue the United States and other developed countries are responsible for the problem — even though they will contribute relatively little to the additional emissions in the future. Developed countries argue that if you want to reduce future emissions, you should go to those places where there will be emissions in the future. The result is a real policy dilemma, because dealing with the large future emitters might mean putting real crimps on their economic development. (Eakinomics cannot resist saying that it was utterly predictable. My first publication on this issue — 24 years ago — noted, “For this reason, there will be an inevitable tension between policies to control greenhouse gas emissions and those toward the global distribution of income.”)

How does one manage this tension? Rossetti arrives at a sensible bottom line: “A serious climate policy must have a plan both for how to reduce emissions at home and for how to ensure that developing nations can access enough low-carbon energy to enjoy the benefits of economic growth.” So, clearly, the United States should have a plan for U.S reductions. Here Rossetti makes the key point that the U.S. efforts are not taking advantage of the promise of innovation: “The importance of innovation is clear, but the United States has not focused on this area in its climate policies. Current policy is focused on incumbent technologies rather than the development of new ones. To wit: Over the next 10 years, the United States will expend more than $110 billion on tax breaks for energy (mostly wind and solar) yet will spend less than $80 billion on scientific research through the Department of Energy. These figures broadly indicate a policy that is inverted from its ideal and necessary focus.”

Evidently the need is not for a global doctrinaire climate policy — that makes no sense. Instead, the need is for a U.S. innovation policy, a theme shared by climate, health, education, and myriad other policy challenges.