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Green Economics that Values Liberalism and Conservatism

Paul Krugman’s recent article on climate change in the NYT Sunday magazine has what one would expect from the Nobel Prize-winning economist and pundit: forceful writing grounded in economic analysis along with sharp-elbowed partisanship.*  After reading it, I started thinking how an article on green economics would be written by someone committed to the yin-yang position that conservative as well as liberal perspectives will have value in moving us forward on the climate change issue.  

A starting point for a yin-yang approach is valuing the emotion-laden moral foundations of both sides.   Support by liberals for limiting carbon emissions has visceral grounds–“deniers are deluded!”; “this is the great cause of our era!”; “the environment is sacred!”–that are likely far more important for most advocates than a cool calculation of costs and benefits.  Similarly, resistance to carbon controls by conservatives is likely based on foundations much more visceral than neoclassical economics–“don’t regulate!”; “America first!”; “what the liberals think is right is wrong!”  The strong feelings on matters such as fairness, freedom, and loyalty that animate both supporters and opponents of carbon controls are rooted in defensible moral principles; neither side has a monopoly on virtue at that broad level.

A next step in a yin-yang analysis–an important one if the analysis is to have real potential to affect policy proposals as well as to enhance empathy–is to examine the efforts of both sides to support their moral intuitions with rational arguments.  A green economics article along those lines would acknowledge the value of the basic position taken by Krugman in favor of political action to lower carbon emissions.  Economically sophisticated liberals are right to be concerned that carbon emissions are associated with significant negative externalities–that is, costs to third parties not directly borne by emitters, notably the costs of warmer temperatures.  Carbon consumers bear the costs collectively, but not as the result of their own individual consumption, and hence have an incentive to overconsume carbon.

At the same time, a yin-yang green economics article would also acknowledge the value of the basic position taken by Jim Manzi against a carbon tax or cap and trade in his articles for the National Review, the National Review Online, the Cato Institute, and the American Scene blog.  Economically sophisticated conservatives like Manzi are right to worry that for people in wealthy and developing nations to incur high costs in the present to lower carbon levels in a much wealthier future is economically and ethically questionable.  Manzi is also logically right in his argument that for policy purposes the negative externalities of carbon use need to be balanced against the positive externalities–the benefits not captured by users.  Taking into account the positive externalities of transportation, heating, and cooling, it is logically possible that the market will overprice rather than underprice carbon.  Carbon may in fact be underpriced as Krugman maintains—but that is an empirical question rather than a matter of economic logic.

The same point about both sides having a rational logic applies to the “insurance policy” issue of how to respond to the possibility of a catastrophic increase in global temperatures.   Both Krugman’s case for increasing carbon taxes and Manzi’s case for a more limited effort to foster geo-engineering and other emergency responses have merit at the broad level of rational calculation of costs and benefits.

My personal take at a yin-yang analysis that draws from both the liberal/Krugman and conservative/Manzi arguments would go like this: First, Manzi’s analysis, not just Krugman’s, suggests that we should try harder than we are now doing to insure against the chance, slim or not, of climate catastrophe.   In that sense, the liberal side of the debate is right, and we should at the very least be offering large prizes for innovation, along the lines of Manzi’s suggestion of a billion-dollar reward for a successful carbon-reducing technology that does not have market potential. 

Second, twentieth century affluence in all the nations that achieved it went along with home and office heating and cooling, extensive highway systems, large-scale private ownership of cars, and the large-scale use of trucking, all fueled largely by carbon.  True, all of these benefits can in theory be attained through an infrastructure based on substances other than carbon–but carbon is what has actually worked, and may well be all that will realistically work in the coming decades for China, India, and other developing nations.  Given that, Krugman’s argument in favor of tariffs on imported goods from China, India, Brazil, or other nations that refuse to control carbon emissions is dubious, even apart from its potential to provoke a trade war.  But so is the conservative argument against any unilateral action by the U.S. or other wealthy nations.   Some wealthy country actions—if we follow Manzi, prize funds and other well-thought out incentives for green innovation–make sense whether or not developing nations join in.

Another person committed to yin-yang green economics might come up with quite a different account from mine—an epistemic sympathy for both the liberal and conservative sides does not equate with a “both sides are equally right” stance, nor with one particular reaction as to the way forward.  It does suggest that progress on global warming is likely to result from a back-and-forth between liberal and conservative sides that both have merit, with both sides refining their positions and proposals to accommodate the best parts of the other side, rather than through the forces of enlightenment slaying the dragons of ignorance and reaction. 

Would a yin-yang analysis of green economics make as punchy a piece as those by Krugman and Manzi?  Krugman’s and Manzi’s articles are lively as well as thoughtful and useful pieces of work.  Yin-yang analyses may equal or even exceed their work on the thoughtfulness dimension–but whether they can be accessible and useful in the way that global warming arguments on behalf of liberals and conservatives are is another matter.  It would be very nice indeed if yin-yang analyses can be made popularly accessible rather than being the property of a small number of people–but in any case, they are worth doing.  Along with the constantly roaring streams of liberal and conservative advocacy, we need a quieter, more reflective, more empathetic yin-yang stream.**

*For example, Krugman asserts that recent climate change models based on current trends “cluster around” a 9oF increase in world temperature from 2000-2100.  That’s a bold assertion, given that only the very highest estimates of CO2 levels in 2100 in the Stern Report and the 2007 IPCC report are associated with that high a temperature increase.

**Is a yin-yang stream on climate change already flowing?  If defined in terms of work that directly tries to take into account the value of both liberal and conservative arguments such as Krugman’s and Manzi’s, I didn’t see any clear evidence of it in a recent series of Google searches.   I found a limited body of work that sympathetically considers cultural and political disagreement over climate change, notably climatologist Mike Hulme’s 2009 book, and a large body of work, such as that by Willam Nordhaus, that tries to engage in cost-benefit analysis without either Krugman’s liberal tilt or Manzi’s conservative-libertarian tilt.  But I didn’t turn up work that uses both liberal and conservative advocacy on climate change to try to come up with a rationally persuasive synthesis.

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Incivility’s victims: Evan Bayh, and a functioning Senate

We can’t know all the reasons why centrist Democrat Evan Bayh (D-Indiana) decided not to run for re-election, but his recent op-ed essay in the New York Times was a stunning indictment of the incivility and dysfunction of the U.S. Senate:

There are many causes for the dysfunction: strident partisanship, unyielding ideology, a corrosive system of campaign financing, gerrymandering of House districts, endless filibusters, holds on executive appointees in the Senate, dwindling social interaction between senators of opposing parties and a caucus system that promotes party unity at the expense of bipartisan consensus.

In the rest of the essay, Bayh points to two of the main causes that we at CivilPolitics have been discussing. First, the necessity of strengthening interpersonal relationships BEFORE discussing areas of disagreement. As Bayh says:

When I was a boy, members of Congress from both parties, along with their families, would routinely visit our home for dinner or the holidays. This type of social interaction hardly ever happens today and we are the poorer for it. It is much harder to demonize someone when you know his family or have visited his home. Today, members routinely campaign against each other, raise donations against each other and force votes on trivial amendments written solely to provide fodder for the next negative attack ad. It’s difficult to work with members actively plotting your demise. Any improvement must begin by changing the personal chemistry among senators. More interaction in a non-adversarial atmosphere would help.

Second, Bayh advocates a variety of structural and institutional reforms which would change the dynamic among Senators and facilitate cooperation. He specifically mentions campaign finance reform and other ways to allow Senators to spend less time fundraising; and reducing the number of votes needed to overcome a filibuster from 60 to 55 (just as the number was reduced from 67 to 60 in 1975).

So much of the rise in partisan rancor has been due to the “big sort” that began in the 1970s as conservative democrats moved to the Republican party, and as liberal or even moderate Republicans got voted out everywhere but the extreme Northeast and Northwest corners of the country. The two parties are now relatively ideologically pure, which makes party into a more perfectly moral divide. The loss of any of the few remaining centrist politicians is a blow to civility and a loss to the nation.

—Jon Haidt

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