Monday, June 09, 2014

Environmentalism is not the enemy of economic growth

Interests, Ideology And Climate

Paul Krugman, NYT
JUNE 8, 2014

There are three things we know about man-made global warming. First, the consequences will be terrible if we don’t take quick action to limit carbon emissions. Second, in pure economic terms the required action shouldn’t be hard to take: emission controls, done right, would probably slow economic growth, but not by much. Third, the politics of action are nonetheless very difficult.

But why is it so hard to act? Is it the power of vested interests?

I’ve been looking into that issue and have come to the somewhat surprising conclusion that it’s not mainly about the vested interests. They do, of course, exist and play an important role; funding from fossil-fuel interests has played a crucial role in sustaining the illusion that climate science is less settled than it is. But the monetary stakes aren’t nearly as big as you might think. What makes rational action on climate so hard is something else — a toxic mix of ideology and anti-intellectualism.

Before I get to that, however, an aside on the economics.

I’ve noted in earlier columns that every even halfway serious study of the economic impact of carbon reductions — including the recent study paid for by the anti-environmental U.S. Chamber of Commerce — finds at most modest costs. Practical experience points in the same direction. Back in the 1980s conservatives claimed that any attempt to limit acid rain would have devastating economic effects; in reality, the cap-and-trade system for sulfur dioxide was highly successful at minimal cost. The Northeastern states have had a cap-and-trade arrangement for carbon since 2009, and so far have seen emissions drop sharply while their economies grew faster than the rest of the country. Environmentalism is not the enemy of economic growth.

(More here.)

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