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Global warming reversal?
Rumor has it that George Bush will shift course on global warming and support limits on carbon dioxide emissions.
I suspect that the United States is far more likely to take unilateral action on this issue than to engage in a multilateral treaty. Americans enjoy feeling like magnanimous leaders, plus they believe that foreigners take advantage of them in treaties. In contrast, the standard "international public goods" analysis suggests that each country will refuse to restrict emissions unless other major countries do the same. This analysis neglects expressive voting, whereby voters choose policies to make themselves feel good, rather than to maximize their incomes. After all, no single voter is decisive over the final outcome, so why not vote your conscience? This suggests, by the way, that the global warming hold-outs will be the non-democracies.
Comments are open, but don't debate the science of global warming per se, you already had a chance to do that.
Posted by Tyler Cowen on September 19, 2006 at 08:22 AM in Political Science | Permalink
Comments
"voters choose policies to make themselves feel good.....After all, no single voter is decisive over the final outcome, so why not vote your conscience?"
The white house does not subscribe to expressive voting or they would not be campaigning on their support of torture. However polls have shown the majority now believe in global warming and want something done, so to resist is bad politics. Also a limit on CO2 emissions can be used to cut back on oil imports, which he has already said he favors.
Posted by: joan at Sep 19, 2006 9:02:10 AM
Only Nixon could go to China. Only Bush can go to Kyoto.
Posted by: Joe Grossberg at Sep 19, 2006 9:10:16 AM
Right, IR explanations usually neglect domestic variables. But how would expressive voting explain the (very plausible) guess that the US could prefer unilateral action over joining a multilateral treaty? Expressive voting may be a useful concept to explain the upcoming change of policy in the US. But I don't quite see the causal connection with unilateral action.
Posted by: ldv at Sep 19, 2006 9:12:51 AM
This analysis neglects expressive voting, whereby voters choose policies to make themselves feel good, rather than to maximize their incomes. After all, no single voter is decisive over the final outcome, so why not vote your conscience?
This is probably a factor, but --
(A) It doesn't seem to be a really big one. After all, doesn't much of passion in the fight about means-testing social security or medicare stem from liberals' and conservatives' conviction that if middle-class and rich voters don't feel themselves to be benefitting (through checks later on down the road), they'll not support the redistributive program? If voting to feel good about yourself actually mattered that much, liberals wouldn't be half so scared of means-testing, and conservatives wouldn't be half so gleeful about the prospect -- people would vote to give their tax money to old people and sick people anyhow. And --
(B) Can Bush really care that much about the "expressive voting thing? People don't vote for policies in the abstract, they vote for candidates. Bush is highly unlikely to stand for election for any office ever again, so he can't reap electoral gains from changing course. And the kind of people who would be positiviely influenced by carbon emissions tend to think he is Satan-incarnate, and are unlikely to revise their theology just because he supports carbon emissions restrictions. So I don't see how expressive voting can be playing into Bush's decision-making.
Posted by: Taeyoung at Sep 19, 2006 9:16:29 AM
I've often wondered how effective it is for the U.S. to cut carbon emissions. If the U.S. cuts back on oil consumption, the world price will drop. This will encourage third world countries to use more oil. Since they may not use as effective pollution control technologies, we could very well end up with more pollution. Similary, if we try to cut the pollution caused by the manufacturing of goods, won't other countries without similar regulations gain a comparative advantage. So we might just be shifting manufacturing from low polluting countries to high polluting countries. I am sure some economists somewhere are studying these effects. I would be interested to know what they are finding.
Posted by: Paul D at Sep 19, 2006 9:17:09 AM
CBO has put out several summaries on the economics of climate that are worth looking at in this respect. For the "leakage" of emissions to other countries, estimates vary and depend on what level of restrictions developed countries take. At $20-$40 per ton of carbon, the effect doesn't seem likely to be very significant. But only a fraction of emissions come from manufacturing activities that could migrate - you can't light your house or drive a car in another country unless you migrate yourself.
Posted by: dcbob at Sep 19, 2006 9:24:22 AM
His judgement really is lamentable, isn't it? Two duds in a row, each for two terms. And perhaps little Madam Cattle-Futures next.
Posted by: dearieme at Sep 19, 2006 9:55:22 AM
Wsn't 1 of the reasons we didn't sign Kyoto was because of carbon trading????
Posted by: Sandy P at Sep 19, 2006 10:40:17 AM
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Posted by: Sandy P at Sep 19, 2006 11:07:27 AM
I wrote my undergraduate thesis on Paul D's question -- will high-pollution manufacturing just move to countries with lower regulatory costs? The answer at the time (1994) was a definite no; if anything, the US was _gaining_ export share at the expense of Europe and importing less in industries with higher toxic-chemical pollution rates. Between the US and developing countries, meanwhile, the differences in labor costs dwarf regulatory differences. People move factories to save the 80% of their budget they spend on labor, not to save the 2% they spend on pollution control.
Carbon, OTH, is different and potentially much more expensive to control than toxic chemical releases are. For manufacturing, I would bet that the same effect persists today -- no one is going to move an energy-intensive industry from the US or Europe to a country without a 24/7 electric grid to escape a carbon tax.
I think there could be a problem, though, with car emissions leaking across countries. IMHO, if US demand for oil drops, the resulting fall will reduce the pressure for people in China to buy fuel-efficient cars, and it could increase usage of some of China's really inefficient scooters. The question here is how consumers' elasticity of demand for oil varies internationally and how it is distorted by government policies.
Posted by: DK at Sep 19, 2006 11:38:04 AM
i still don't see an answer to what i understood the question to be: there's no saving of oil we don't use, we just make it cheaper for use by (e.g.) china and india, which likely increases pollution from that given oil (because the poorer countries are likely to pollute more with a given unit of energy). of course, the same logic holds true in the US -- by driving a prius or riding your bike to work, you just make gas cheaper for soccer moms in SUVs, etc.
Posted by: dj superflat at Sep 19, 2006 12:21:44 PM
Gore and Schwarzenegger got them good.
Posted by: A Tykhyy at Sep 19, 2006 12:27:52 PM
Dj superflat, I can answer one piece of your question -- poorer countries are not going to emit for carbon for a given unit of oil energy than we do, since the carbon content of a gallon of gas or barrel of oil is fixed by the laws of chemistry.
What will differ is the economic value different countries get from burning a barrel of oil. Mixes of oil vs. coal and nat gas also have different carbon impacts, but we're talking about the price of oil, not about shipping more coal to China.
Posted by: DK at Sep 19, 2006 12:29:03 PM
Well that depends on what you mean by released. If you consider carbon which is trapped in, say, a smokestack, released, then yes, there is no difference.
Posted by: dan at Sep 19, 2006 12:54:08 PM
DK,
I generally agree with your point about companies pollution/emission abatement costs being a relatively small portion of their costs, and if they have huge fixed investments they aren't going to shut down and spend a zillion bucks on a new plant in China of wherever.
However, at the margin this will occur. The best way to think of it is in terms of unionized companies where the union is a KoolAid drinking bunch of fools like at GM. There comes a point where the company simply has to say, "ok, our costs will be lower if we close all our US factories and open up new ones in Mexico, even after (naturally) taking into account up front fixed costs.
Companies are making this type of decision all the time, witness textiles for an obvious example. Each extra cost that is imposed on companies in the US makes them that much more likely to close up shop here (US) and go to China or India or Mexico or wherever.
Additionally any analysis is almost certainly going to miss opportunity costs where companies never start up in the US in the first place and instead do not pass go and go staight to China.
So long as even one country like China is a holdout then it really is pretty much of a waste for us to engage in regulatory action for what is a small enough difference it needs to be measured in terms of 100 years from now.
China and India will refuse to remain dirt poor, and it is absurd for us to think we should, let alone could.
The solutions will come via new technology that makes revolutionary gains, not silly things like reducing emissions a few percent below 1990 levels, the latter of which will delay global warming enough to make what would have been x temperature in 2100 occur in 2106 instead.
The goal ought to be to think in terms of carbon sequestration instead of closing down a baddie plant at the margin.
Posted by: happyjuggler0 at Sep 19, 2006 1:10:11 PM
China and India will refuse to remain dirt poor, and it is absurd for us to think we should, let alone could.
should read
China and India will refuse to remain dirt poor, and it is absurd for us to think we should, let alone could, stop them.
Posted by: happyjuggler0 at Sep 19, 2006 1:14:14 PM
happyjuggler0, the problem is that in theory, these small differences matter "at the margin", but in practice, the margin is lost in the noise. CEO's of companies like GM just don't have time to think about the 0.5% difference environmental costs make vs. say an 80% labor cost and 10% transportation cost. The uncertainty in labor cost estimates will exceed 0.5%, and a CEO will almost certainly put more effort into figuring out the uncertainty in the 80% than in squeezing the last drop out of environmental law evasion. That's not to even mention the risk of new and unpredictable environmental laws in China, or of India trying to get the CEO deported and arrested after a chemical spill, as India is trying to do to the CEO of the company that bought Union Carbide.
But anyway, as I said, carbon is a different game entirely than toxic chemicals. There is a lot more empirical data about toxic chemical regulation. There is very little or no historical data about the effects of brand-new ideas like carbon taxes, and they are potentially MUCH larger and more expensive than past environmental regulations. But, even then, you will have to consider issues like the reliability of the energy grid, the need to be located near ore deposits, etc. before you assume industries will start moving. Most of the highly-energy-intensive industries tend to be more dependent on location and capital than on labor, and they thus may be slower to move than labor-intensive industries.
Posted by: DK at Sep 19, 2006 2:33:59 PM
What if Bush's decision aims at demonstrating that he's able to move back?
Maybe, he's preparing to announce that the U.S. Army in Iraq will be soon withdrawn, and this is a sort of experiment to see which ones the world's reactions can be.
Posted by: Jacopo at Sep 19, 2006 2:41:28 PM
I happen to know from personal knowledge that China is extensively investing in alternative, clean energy solutions. A company that I am part owner of is in discussions through our representitives with the Chinese govt. right now about this very issue.
Additionally, the indian consul to the US central states said at a meeting that I attended that India is investing huge amounts of money into clean energy of all types.
These two countries simply cannot meet their long term needs through dirty energy. Their population density and total land mass won't allow them to export their pollution to unpopulated areas as we do.
They are right now running into huge pollution problems. They recognize this. It doesn't matter if they sign or not, they are going to act and are acting as though they have.
Posted by: mickslam at Sep 19, 2006 4:19:51 PM
They don't need to sign and we don't either, we're working on it w/them and the Ozzies.
Posted by: Sandy P at Sep 19, 2006 11:52:01 PM
I happen to know from personal knowledge that China is extensively investing in a lot more dirt, nasty old coal and oil-based energy systems than clean ones. China is growing very fast and adding massive electricity capacity and cars. No more than a few percent of this could possibly be clean energy in the timeframe of the next few years.
I would guess that China adds more power generation capacity from coal next year than all clean sources combined over the next decade. The same goes for vehicles.
I have worked on environmental and clean energy issues in Asia for over 10 years. The Indian consul talking about something means next to nothing.
I commend China for looking to other solutions and think the pressure will be greater on them in the future to do even more.
But this needs to be put in perspective. China is the second largest emitter of carbon and has the fastest growth. India is not far behind.
Posted by: Jack at Sep 20, 2006 5:37:27 AM
dj superflat:
"there's no saving of oil we don't use, we just make it cheaper for use by (e.g.) china and india"
Presumably, lower demand for oil means that at the margin some of it stays in the ground. Does anyone have handy numbers for the (long-term) price elasticity of supply for oil? And the price elasticity of demand for it in China and India?
Posted by: Mitch at Sep 20, 2006 10:32:33 AM
happyjuggler0,
Attempts to reduce carbon emissions increase the prices of said emissions and make investments in alternative energy sources and "revolutionary gains" relatively more attractive.
Posted by: eriks at Sep 20, 2006 12:14:11 PM
Talking about oil and carbon emissions as being the same is misleading. In the US, it will be much cheaper to reduce CO2 emissions by reducing coal consumption. The cost of reducing CO2 in the transport sector was something like $200/ton CO2 when I last checked, although that was before the recent spike in oil prices. In the coal sector, it's nearly an order of magnitude lower.
Scrubbing CO2 from coal flue gas using the MEA solvent process (an available technology) would cost maybe $40/ton. PRI and Alsthom are piloting a new solvent-based CO2 scrubbing technology based on chilled ammonia that is projected to be able to remove 90% of the CO2 for as little as $15/ton. Sequestration in a nearby aquifer might add $5/ton to that.
Posted by: Paul Dietz at Sep 20, 2006 2:42:18 PM
There seems to be a glaring information problem here. We don't have a good understanding of the interaction between the atmosphere and the lithosphere, but we're willing to invest billions, or even trillions, in an attempt to reduce one atmospheric gas. This is without any assurance that what is being proposed will even work. What will be the payoff for the investment? Global cooling?
Here's an illustration of the uncertainty involved with this project. The Wall Street Journal ( http://online.wsj.com/article/SB115862629796766991.html?mod=todays_us_page_one ) reported recently that the US government has spent something like $8.0 billion to save the salmon species that migrate the Snake and Columbia Rivers. Turns out that those dams are not the only reason for the decline of salmon stocks.
Posted by: George at Sep 21, 2006 12:37:26 PM
