Time to Act, Not Despair

Nat KeohaneThis post is by Nat Keohane, Director of Economic Policy and Analysis at Environmental Defense.

In his December 11 post on Grist, Ross Gelbspan argues that we've already passed the point of no return with global warming, and climate activists are full of "hollow optimism".

There's no doubt we're already seeing signs of global warming. In our Climate 411 blog, we post signs of it all the time (see here, here, here, and here, for example). But just because the boat has started to leak doesn't mean it can't still get much worse. Our most dangerous response to climate change is despair. Now, more than ever, we need to act.

Gelbspan agrees that we still need to act. Where we disagree is in what action to take. He says that the American public has a "mindless belief in the divine power of markets" and the "antidote" is a "revitalization of government" – that the government should pour hundreds of billions of dollars into carbon-free technologies.

This is where we part company. Technological innovation is not most quickly and efficiently implemented by government programs. Markets are much more nimble and able to respond in real time to what works and what doesn't. Our best hope is to get the power of markets working for us through a cap-and-trade system.

Global warming is a classic example of market failure. The pollution that causes global warming has skyrocketed because the environmental costs are hidden, and we don’t factor them into our decisions. Factories and power plants pay for the fuel they burn, but not for the pollution they emit. The solution is to harness the power of market forces by establishing firm caps on greenhouse gas emissions.

We have proof that this works in the acid rain program. When we put a cap on sulfur dioxide (SO2), the cause of acid rain, the power sector and its suppliers came up with a range of technological innovations to meet the new limits. Some were relatively mundane – for example, figuring out how to burn low-sulfur Wyoming coal in boilers designed for high-sulfur coal from Illinois or West Virginia. Others were more dramatic. The prospect of a cap on SO2 prodded a team of GE engineers to figure out how to turn the waste from a "scrubber" into gypsum, which could be sold as a byproduct.

Research by Carnegie Mellon University showed that patent filings spiked after the Clean Air Act [PDF] though the government had been supporting research for long before that. They conclude, "The existence of national government regulation stimulated inventive activity more than government research support alone."

Patent Filings
Source: The Effect of Government Actions on Technological Innovation for SO2 Control [PDF]. The EPA/DOE/EPRI Mega Symposium, August 20-23, 2001.

Again and again, American entrepreneurs and investors have shown the ability to solve problems – when there is a market incentive for them to act. If the government will lead by capping carbon pollution, the primary cause of climate change, the market will respond with investment and innovation on a scale to solve this problem. Already, venture capitalists are pouring more than $300 million a month into new energy technologies. But it will take the certainty of a cap, an overall limit on carbon pollution, to unleash a sustained wave of investment and innovation.

Take one example of many: Burning coal to produce electricity is responsible for about 40 percent of the CO2 emissions from the United States. In a typical coal-fired power plant, nearly one-third of the coal's energy is lost as waste heat, greatly contributing to this pollution. A cap on carbon would give companies a monetary incentive to reduce that waste, so work to increase efficiency would rapidly expand. The new technologies could then be sold overseas, not only helping our balance of trade, but reducing greenhouse gas emissions in places like China.

The incredible momentum for action on climate change is, in itself, a testament to the fact that we can solve this problem. The more than two dozen CEOs, from firms like GE, Caterpillar, and Duke Energy, who endorsed a mandatory cap on carbon are hard-headed realists. They spoke out for a better world, but they also spoke up for their stockholders. It is the considered judgment of these corporate leaders that the carbon cap they endorsed is both technologically achievable and economically sound.

With sufficient motivation, we can rise to the challenge and do what's necessary. A cap on greenhouse gas emissions is the incentive we need to drive innovation and efficiency. We know what we need to do, and we have the ability to do it.

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5 Comments

  1. Posted December 12, 2007 at 6:50 pm | Permalink

    I agree with you 100%. I mentioned in my response to Ross Gelbspan that we must take human nature into account in our solutions. Innovation and meeting market needs will happen if the opportunities are there. Despair does none of us any good. Big Brother of the Government is a partner but not the answer. They can create a level playing field by law, but cannot innovate the way the private sector can. If profit is not part of the picture, nothing will happen, I guarantee it!

    Sincerely

  2. mike
    Posted December 12, 2007 at 9:16 pm | Permalink

    Yes, what Nat has to say is a fast growing sentiment held by those who are keeping a vigilant eye not only on the science but the environments in which we live.
    At the grass roots level it may be surprising to some just how much is going on to look for solutions. What we have to remember to keep the discussion concerning global warming effects out of the constant arguing arena is that these man made pollutants may not contribute to warming but does that mean that we should continue to watch them pollute our air and water while our health continues to fail? Deal with this issue for what the consequences of non-action are to our overall health and we will quickly find solutions because we ALL will agree.
    And, I do offer a solution. Right now there is a technology that is currently being blended with Diesel fuel in the STate of Texas supported by the EPA. This very cost effective emissions lowering additive, not only significantly lowers all emissions but also lowers fuel consumption by well over 5%. It is used to lower emissions in the State's non-attainment areas and has so far exceeded all expectations. It could be blended with all diesel fuel in the Nation and greatly reduce emissions and fuel consumption. Give it a look at http://www.visconusa.com.

  3. rkcannon
    Posted December 14, 2007 at 6:59 pm | Permalink

    The rebuttals I've seen say the "greenhouse" gases do not lead global warming but follow it. And global warming is cyclical going back thousands of years. Greenland was green for a few hundred years. Mars is warming also. They say the sun is causing the warming.

    So it seems that we can't do much about it. Still we need alternative energies but we don't need the carbon credits and sales between countries etc. that will be just a tax on developed nations, and the middlemen will take most of the money. That money should be used for developing the technologies needed.

    The discussions are incredibly biased that man is the cause of global warming. Why is this? The science does not support this, and many many scientists do not support it, the vast majority. So why the statement that there is a "consensus"? This is a lie and deception! You will lose all your credibility when found to be wrong.

  4. Posted December 17, 2007 at 4:05 pm | Permalink

    Bill Chameides – member of the National Academy of Science and science advisor to Environmental Defense – wrote a series on "How We Know Humans Cause Global Warming". If that series doesn't answer every question you have, click on the Science category or do a search on "Chameides". We've addressed Mars, the Sun, etc., etc. I won't repeat it all here. Humans are causing global warming.

  5. rkcannon
    Posted December 18, 2007 at 12:02 am | Permalink

    I've looked at Dr. Chameides's "series" and it did not change my mind because of its lack of depth, glossing over of details and rebuttals of others. His reasoning of why the earth itself could not be warming the atmosphere (because it is transferring more heat) was not thorough or convincing. The science is by no means settled- just look at the rebuttals of prominent scientists. Please see

    http://www.climatescience.org.nz/

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