The climate apocalypse is coming now that Donald Trump has stepped the United States away from the Paris climate agreement, if we believe some critics. Never mind that compliance was voluntary and that, at least absent tighter controls in the future, the agreement was unlikely to have much effect on global temperature increases by 2100.
The effects of continued industrial emissions of carbon dioxide—and what (if anything) governments should do about it—are important discussions. Unfortunately, those discussions frequently are derailed by nonsense economic claims by some advocates of “climate action” that throttling fossil fuels and subsidizing solar and wind energy somehow deliver an economic boon rather than a painful cost. Such claims furiously followed Trump’s announcement about the Paris deal.
The essential error is one that French economist Frédéric Bastiat described in the mid-1800s (and that Henry Hazlitt later revisited): observing only the seen benefits (in this case, jobs in solar and wind) while ignoring the costs in terms of foregone investments and fewer jobs elsewhere.
Consider three examples (out of countless instances) of this error. Congressman Jared Polis claims that pulling out of the Paris agreement “flies in the face of economics” because it prevents the creation of “21st century jobs” and the advancement of “innovative energy.” The United Nations claims, “Climate solutions provide opportunities that are unmatchable.” Barack Obama points to the new jobs in “growing industries like wind and solar” and claims that “nations that remain in the Paris Agreement will be the nations that reap the benefits in jobs and industries created.”
But any policy looks good if you look only at the benefits and ignore the costs. By the same standard, it would also be a great idea if everyone in the country gave me $1,000, if we banned automobile engines and motors (think of the gains in the bicycle industry!), if we required all electricity to be generated by human pedalling, if we required everyone to work with one arm tied behind their backs, if (via Bastiat) we banned windows, and so on. Sensible people who are not ideologically self-deluded look at costs as well as benefits.
It is worth stepping back to remind ourselves of where we currently get our energy. According to the U.S. Energy Information Administration, in 2016 the top three sources of energy were petroleum (37 percent), natural gas (29 percent), and coal (15 percent). So-called renewable energy (at 10 percent) barely topped nuclear electric power (at 9 percent)—and renewables consist mostly of biomass and hydroelectric. Of the 10 percent renewables, wind was 21 percent of that, while solar was 6 percent. In other words, wind and solar combined provide less than 3 percent of our energy—and that’s with massive subsidies.
A rapid and painless path to a future free of carbon emissions is a pleasant fantasy, but it is only a fantasy.
So where does that leave us? What should we do, if anything, to mitigate the harms of global warming? I’m not prepared to answer that question here, but I wanted to at least outline the basic possible approaches.
- Accept the costs of seriously curtailing fossil fuels and subsidizing wind and solar (or nuclear) power and try to implement the relevant policy changes. Obviously this is a hard sell politically. Even if the United States had stayed in the Paris agreement, I suspect most nations (including ours) would have treated the agreement unseriously. The fact that the United States has now withdrawn from the agreement under President Trump illustrates the problems with the political approach. Arguably but for Barack Obama’s changes at the EPA and his entry into the Paris agreement, Hillary Clinton would be president today.
- Argue that the harms of global warming even with unmitigated carbon emissions would be modest or offset by gains. For example, if global warming floods some coastal areas and makes some areas too hot to grow food, it will also make new areas available for habitation and agriculture. I worry that this approach looks for pie in the sky.
- Hope, with Shikha Dalmia, that “America’s technology and energy sectors [will] develop innovative solutions that present consumers with cleaner energy options that are obviously cheaper and better than what exists today.” The strategy here is for government to do nothing (or very little) and let private industry push ahead. I think this is probably close to what will actually happen, probably led by new sorts of nuclear plants.
- Treat “climate action” as a sort of religion, complete with carbon indulgences, intentionally dysfunctional sinks and toilets, bans on politically-incorrect light bulbs, hectoring of the masses, etc. Notice that much of today’s left is consumed with this approach plus the far-fetched political approach.
- Treat carbon emissions beyond a certain level as a sort of pollution that violates property rights, and call for government intervention to require polluters to compensate harmed property owners (ski resorts, coastal property holders, etc.). This is the approach I’d probably favor if I thought it could become politically viable. This would better capture the true costs of carbon-based fuels and then let free actors sort out the rest. Is the best answer nuclear? New forms of solar? A variety of new technologies? Carbon capturing in tandem with the use of fossil fuels? Geoengineering? Just living with the changes? I have no idea—and neither do the “experts” who implement policies of taxation and regulation.
What should be obvious is that it’s difficult to reach a viable solution when so much of the public discussion is clouded by ludicrous economics. Once we agree that we can’t get something for nothing, that throttling cheap energy while throwing tax dollars at renewable cronyists will not somehow provide an economic miracle, perhaps we can get to the business of discussing the science of global warming and what we might sensibly do about carbon emissions.