John Buell

Climate Science and Politics of Growth

The business press worries a lot about "moral hazards." They remind us that government beneficence corrupts hard working citizens. Social Security deters citizens from saving for retirement, unemployment insurance spares the jobless the need for diligent job searches, and health insurance encourages slothful living habits or unnecessary trips to the doctor. The business press, however, seldom scrutinizes its most revered constituents, big business. Many of our most successful and widely celebrated businesses are themselves on the dole. They take their success as proof of entitlement, and that the rest of us are suffering the consequences. The politics of global warming is a telling and consequential instance of economic power corrupting political judgment.

The latest Intergovernmental Panel on Climate Change report, which adds further support for the relationship of greenhouse gases to global climate change, has provoked an odd reaction among many business leaders. Even some who have long denied any connection between hydrocarbons and global warming now concede the link, but they take a new tack. They claim that any serious attempt to slow the pace of global warming will do serious damage to the national economy. They can reach this conclusion because they equate their short term bottom line with "the economy," and surprisingly many in the media follow them in this judgment.

Oil industry defenders portray leading climate scientists as hell-bent to place draconian curbs on the US economy. Yet prominent climate scientists are, if anything, too restrained-and conventional-in their political and economic pronouncements. Even the most conservative introductory economics texts, like that by former Bush administration Council of Economic Advisers chair Gregory Mankiw, recognize that markets have imperfections. When the purchase and use of a commodity harms third parties, government has an appropriate role in taxing and thus discouraging consumption of that commodity. In the world of economic textbooks, a neutral and informed government calculates the extent of the damage and enacts an appropriate tax.

Yet in our contemporary corporate economy, oil, auto, and private utility interests have enormous market power, which they eagerly translate into political power. They already enjoy vast favors in the forms of subsidized leases, government supported highways and emergency services, and lower tax rates. A tax on gas that reflected not only carbon content but much of our military cost as well as air pollution, congestion, and highway accidents would substantially impact several key corporations. Nonetheless, is their welfare synonymous with "the economy?"

Tax and regulatory policy in the late eighties and nineties led to major gains in energy efficiency and if anything were very beneficial to overall economic development. James Hansen, one of the mad scientists most reviled by leading oil companies, has put this case in language that reads as though it came straight out of market economics 101: "The US is still only half as efficient in its use of energy as Western Europe, i.e., the US emits twice as much CO2 to produce a unit of GNP, partly because Europe encourages efficiency by fossil fuel taxes. Available technologies would allow great improvement of energy efficiency, even in Europe. Economists agree that the potential could be achieved most effectively by a tax on carbon emissions. The tax could be revenue-neutral. leaving government revenue unchanged; and it should be introduced gradually. The consumer who makes a special effort to save energy could gain, benefiting from the tax credit or decrease while buying less fuel; the well-to-do consumer who insisted on having three Hummers would pay for his own excesses."

Such a course of action represents a market friendly way to leverage less reliance on militarily costly foreign oil markets, less polluting and more efficient transportation system, and whole new markets in energy saving technologies.

More broadly, those who equate the economy with business as usual would do well to consider the ice storm that rocked my home state of Maine nearly a decade ago.Much of the state lost power for more than a week; the cleanup costs were immense, and it took even longer to get back to business as usual. Recently the Toronto Star reported on a Canadian study of the storm, which also struck much of Southern Ontario. The ice storm gave the biggest single boost to Ontario's economy in history, a 1.6 billion dollar gain attributed to necessary repairs to houses, roads, and bridges. Some of the repairs are still not complete, but Gross Domestic Product got a huge boost. If the greenhouse effect is associated with more extreme weather events, then economic growth will really take off.

Is this the kind of growth we want? GDP also rises if more citizens go to hospital emergency rooms for asthma or auto crashes or hire more baby sitters to cover for time lost in traffic jams. The economic growth most celebrated by the dominant players in our global economy isn't helping most of our citizens. Too many of our corporate giants feel entitled to the kind of "growth" that suits their needs. Oil and auto industry apologists argue that scientists are using greenhouse analysis to trump consumer freedoms. Yet it is they who have used their political and economic power to narrow our options, to the detriment not only of today's consumers but of future generations.

John Buell lives in Southwest Harbor, Maine, and writes regularly on labor and environmental issues. Email

From The Progressive Populist, May 1, 2007

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