R Street: Faking Freedom on Climate Change

“Classical liberals must expose the quixotic quest to ‘save’ or ‘stabilize’ the climate and must educate the public about what is really involved: a new, powerful government lever on economies and freedom, anywhere and everywhere. Socialist central planning for economies may be intellectually dead, but global climate planning is alive and well.”

“For classcial liberalism, privatizing the subsoil to enlarge and democratize wealth from Mexico to Venezuela to Saudi Arabia to Nigeria is the number one energy issue, not climate change. Yet it goes uninvestigated and unmentioned at R Street and the Niskanen Center. It might be CO2-positive, after all, not something the climate funders want to promote.”

The toxic brew of climate alarmism and climate activism (aka forced energy transformation) is incompatible with the theory and practice of classical liberalism.

First, any qualitatively new government programs (justified with a “market-failure” rationale) are at bottom about the coercion of human beings. Second, Austrian school economics warns that even small opening interventions tend to require more and interventions to achieve their goals. Third, Public-Choice economics warns against the inevitable political takeover and makeover of interventions that theorists have allegedly crafted to achieve good.

Just about everything that emanates from the climate activists is about bigger, global government and negating free consumer choice. Carbon dioxide (CO2) regulation has already proven to be about as byzantine, open-ended, and unenforceable as regulation can get.

Classical liberals must expose the quixotic quest to ‘save’ or ‘stabilize’ the climate and must educate the public about what is really involved: a new, powerful government lever on economies and freedom, anywhere and everywhere. Socialist central planning for economies may be intellectually dead, but global climate planning is alive and well.

Why demonize and discriminate against consumer-chosen, market-friendly fossil-fuel energies? Carbon dioxide is not a pollutant. It is not an unambiguous negative externality—except in the hypothecated equations of high-sensitivity climate models. CO2 has known benefits, chiefly the fertilization effect for plants. Moderately warmer and wetter climate change also has positives for agriculture, recreation, and the ecosphere.

The field of climate-change economics, pioneered by Robert Mendelsohn, sees such social benefits exceeding costs for higher CO2 atmospheric concentrations in a number of realistic scenarios.

Simply postulating that untouched nature is always optimal—and any human influence on the climate is bad–belongs to theory of deep ecology, not classical liberalism.

Freedom Fakers

But there are freedom fakers in our midst on the Climate Change issue. One such organization is the Niskanen Center, led by the Cato outcast Jerry Taylor, who has tapped into a fountain of cash to support a carbon tax and go easy on existing “decarbonization” intervention by governments. Fortunately, Taylor’s prior beliefs and writings are more than enough to refute his present views.

R Street Institute (like the Niskanen Center) is living a lie regarding climate-change analysis and policy. Dressed as a pro-liberty think tank (“Free markets. Real solutions”), R Street has raked in money to hire (former) free-market scholars. Of course, the pliable have to take climate science as “settled” (in favor of alarmism) and advocate pricing (taxing) carbon dioxide as somehow efficient.

Josiah Neeley, formerly of the Texas Public Policy Foundation, where he argued against climate alarmism and forced energy transformation, is the Energy Policy Director at R Street. He does not appear to want to debate the science of global lukewarming, and he is all-in for a carbon tax.

Regarding the latter, Neeley has badly misinterpreted Robert Murphy as saying that such a tax has economic merit. (See Murphy’s rebuttal here.) But the issue goes beyond just arcane arguments about tax policy.

Climate Statism

The quandry of Neeley, Taylor, and others obstensibly promoting classical liberal scholarship is more than (illegitimately) making the assumption of high-sensitivity warming to calculate large economic damages.

The pretenders must dodge essential questions, forget basic insights of political economy, and acquiesce to ancillary regulatory forays.

I offer these five reasons why R Street and the Niskanen Center cannot claim to be “free market” or “classical liberal,” given their “toxic brew” of climate alarmism and CO2 regulation.

First, the whole climate crusade is thoroughly Malthusian and interventionist—and championed by a rogue’s gallery of classical liberalism’s enemies.

Climate is, as Al Gore stated in Earth in the Balance (p. 269), “the central organizing principal for civilization.” Or as stated in the subtitle of Naomi Klein’s book, This Changes Everything, it is Capitalism vs. the Climate.

Any acquiescence to the movement to demonize and then regulate CO2 will likely add many bricks to the road to serfdom.

Second, the science is not settled regarding the nature of the problem, much less its “cure.”

Given that the known benefits of CO2 (the fertilization effect) may be joined by benefits from global lukewarming, it cannot be concluded that CO2 emissions are on net a negative externality in either the near or distant future. (That could well be an indeterminate question.)

Given the science, peculiar assumptions must be made in order to create future climate benefits that can offset here-and-now economic costs. Lower-sensitivity estimates from climate models do much to ruin the climate benefits of mitigation policy.

Third, CO2 regulation is all about global government as well as imposing new layers of domestic interventionism. Because CO2 is indeed a global phenomenon, the “market failure” argument for CO2 regulation becomes a justification for government control at a trans-national level and worldwide scale that classical liberalism has scarcely encountered before.

Domestic CO2 regulation requires US-side tariffs and/or quotas for hundreds if not thousands of goods–an interventionist process plagued by a pretense of knowledge in the planner world and politics in the real world. (Spread over the world, a global border-pricing program would involve billions of different pricing arrays.) Neeley’s study (co-authored with Catrina Rorke),”Adjusting a Carbon Tax Price at the Border,” focuses on international trade legalities and does not even begin to consider the subjectivity and real-world viruses of such a regime.

Fourth, the non-neutral effect of carbon taxes on income levels has also made differential taxation part of the plan. Again, the pretense of knowledge, as well as politics, come into play to refute any “optimality” argument.

Fifth, the worldview of pricing CO2 has come in place of a true global classical-liberal movement regarding energy and the environment: privatization of the subsoil (as well as above-ground infrastructure).

Privately owned subsoil mineral rights are a rarity in the world. The US is now the world’s leading fossil-fuel producer, thanks in large part to its free, private-property energy economy (oil exceptionalism can be applied here).

For classical liberalism, privatizing the subsoil to enlarge and democratize wealth from Mexico to Venezuela to Saudi Arabia to Nigeria is the number one energy issue, not climate change. Yet it goes uninvestigated and unmentioned at R Street and the Niskanen Center. It might be CO2-positive, after all, not something the climate funders want to promote.

Point #1 is BEWARE; Point #2 is WHAT IS THE REAL PROBLEM?; Points #3 and #4 are THE ‘CURE’ IS WORSE THAN THE ‘DISEASE’ and Point #5 is REFOCUS.

 Finale

Classical liberals can agree that the free market–voluntary transactions between consenting adults–does not bear the burden of proof when the alternative is government coercion. Markets are be presumed innocent until proven guilty. Government intervention, contrarily, bears a high burden of proof and must show both that markets are failing and that political intervention will not fail. All the more so, in the case of global intervention.

Climate change is less a problem for free markets than it is a stalking horse for open-ended statism.

Climate alarmism and its attendant forced energy transformation is the reverse of classical liberalism. Conservatives and libertarians and populists should not be fooled. Climate activism emanating from the Niskanen Center, R Street, and their like is fake freedom.