“A Conservative’s Approach to Combating Climate Change” (Adler’s 2012 argument revised)

“A carbon tax is not a fundamentally un-libertarian idea. Jonathan H. Adler, a professor at Case Western Reserve University School of Law … has argued for the use of carbon taxes as part of a market-based approach to tackling climate change.”

– Eric Boehm, “The Republican Carbon Tax Bill Would Create Power Commission with Access to All Government Data.” Reason, July 24, 2018.

It was titled “A Conservative’s Approach to Combating Climate Change.” Published in The Atlantic (May 30, 2012), its author did an about face on his prior beliefs on climate alarm and the role of government policy (see last Thursday’s post: “‘Greenhouse Policy without Regrets’”).

The 1,800-word new view of Jonathan Adler did not so much refute as bypass his prior views on the nature of carbon dioxide (CO2) emissions and government energy policy. Worse, the academic Adler (versus think-tank Adler) minimized or largely ignored basic, time-honored arguments against climate activism.

And today, six years later, the friendly political ground on which Adler constructed his new climate views has shifted to leave the carbon-tax proponents exposed.

Surely it is time for a thorough rethinking of climate alarmism/forced energy transformation back toward classical-liberal precepts and free-market reliance.

Missing Argument

Classical liberalism 101 includes four arguments regarding any proposal to introduce government intervention into a private property, free-market situation.

• Non-aggression axiom. The presumption of innocent-until-proven guilty applies to voluntary transactions between consenting adults. This gives the philosophic high ground to free markets, while placing the burden of proof on initiation-of-force (coercion) proposals.
• Pretense of knowledge. Regarding a so-called alleged market failure, is there objective knowledge on the both the nature of the problem and the solution? (This applies to a tort situation as well in a court of law.)
• Government failure. Does a recommended (blackboard, on paper) solution easily translate into real-world public policy, both in its initial implementation and in subsequent iterations? Restated, what are the transaction costs with even a best-case situation?
• Unintended consequences/ancillary intervention. If a government intervention is proposed, what other government intervention is necessary to make the initial intervention work? In the case of priced CO2, two auxiliary policies (which again bring the pretense of knowledge into play) are:

– global tariff policy (“border adjustments”) between nearly 200 sovereign political jurisdictions to prevent unregulated areas from defeating the purpose of US-side intervention;

– equity adjustments with the tax-and-dividend scheme given the regressive nature of pricing CO2.

Professor Adler’s case for activist government (below) ducks the basic arguments that have always informed the debate. Short of speaking in Hayek-Buchanan-Mises terms, any such interventionist certainly cannot claim to be a classical liberal–and hardly conservative as it is defined in the current debate.

One other note: Historically speaking, today’s climate debate must be informed by the history of past climate alarm and prediction (also see here), as well as the history of the failed Malthusian idea (population bomb, resource depletion, and even anthropogenic cooling). The track record of the alarmists/interventionists, lurching from one cause to another, suggests humility and caution in the current climate debate when advocating coercive government policy.

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Here is Professor Adler’s whole Atlantic piece (in red) with my comments indented in black. (Subtitles have been added)

No environmental issue is more polarizing than global climate change. Many on the left fear increases in atmospheric concentrations of greenhouse gases threaten an environmental apocalypse while many on the right believe anthropogenic global warming is much ado about nothing and, at worst, a hoax. Both sides pretend as if the climate policy debate is, first and foremost, about science, rather than policy. This is not so. There is substantial uncertainty about the scope, scale, and consequences of anthropogenic warming, and will be for some time, but this is not sufficient justification for ignoring global warming or pretending that climate change is not a serious problem.

Yes, climate science is dealing with “the uncertainty monster.” And climate policy is a “wicked problem.” This sets a high bar for government policy to jump.

Physical Science

Though my political leanings are most definitely right-of-center, and it would be convenient to believe otherwise, I believe there is sufficient evidence that global warming is a serious environmental concern.  I have worked on this issue for twenty years, including a decade at the Competitive Enterprise Institute where I edited this book. 

Has (had) the physical-science basis for climate alarm become more pronounced between 2000 and 2012? And between 2012 and today? A plethora of evidence –as reported by Judith Curry, Roger Pielke Jr., Roy Spencer, and other experts–offers ample rebuttal to climate alarmism. The IPCC’s climate sensitivity went down in their last report, and “fat tail” worse-case anthropogenic warming has been discounted.

So why the about-face to assert “there is sufficient evidence that global warming is a serious environmental concern“? The key areas of “global lukewarming” and “global greening” have grown stronger, not weaker, over time.

I believe human activities have contributed to increases in greenhouse concentrations, and these increases can be expected to produce a gradual increase in global mean temperatures.

This has always been the view of most of the opponents of climate alarm/forced energy transformation. Nothing new here. The argument of qualitative change harks to the notion of optimal nature, a tenet of deep ecology, where any human influence cannot be benign, much less positive.

While substantial uncertainties remain as to the precise consequences of this increase and consequent temperature rise, there is reason to believe many of the effects will be quite negative. Even if some parts of the world were to benefit from a modest temperature increase — due to, say, a lengthened growing season — others will almost certainly lose.

“Reason to believe“? “Quite negative“? This is pure assertion–and shaky. Why was the science more alarming to the writer in 2012 than in the 1990s? In fact, a well recognized, much debated “pause” or “haitus” has occurred in these years compared to climate-model-projected warming.

And today versus six years ago (2018 versus 2012), the warming is unremarkable in terms of what high-sensitivity climate models predicted. A middle position of global lukwarming removes much of the climate alarm.

Many so-called skeptics note that environmental activists and some climate scientists exaggerate the likely effects of anthropogenic warming, distorting scientific findings and overstating the extent to which contemporary events (hurricanes, etc.) may be linked to human activity to date.  But the excesses of climate activists and bad behavior by politically active scientists (and the IPCC) do not, and should not, discredit the underlying science, or justify excoriating those who reach a different conclusion.

This is setting up a non sequitur. It begs the question of “underlying science”. More generally, the current alarm raises the question of “consensus science” and the argument from authority. Classical liberals are used to fighting against false consensus, whether it was the central planning ideal, Keynesian “middle way” economics, or Peak Oil.

Indeed, most skeptics within the scientific community readily accept the basic science.  They contest the more extreme climate projections, but accept the basic scientific claims. Take, for example, Patrick Michaels of the Cato Institute.  In one of his recent books, Climate of Extremes: The Global Warming Science They Don’t Want You to Know (co-authored with Robert Balling, another prominent “skeptic”), Michaels readily acknowledges that there is a warming trend and that human activity shares some of the blame.

The position espoused by Michaels, Balling and most (but not all) skeptics is that anthropogenic global warming is occurring, but it is more of a nuisance than a catastrophe. 

Characterizing the skeptic position of anthropogenic warming as “more of a nuisance than a catastrophe” is quite uncharitable. Global greening as a direct effect of increasing atmospheric concentrations of CO2 has always been a major argument in the debate. Moderate warming is also considered to be a net positive, as documented by Robert Mendelsohn in his extensive work on the subject.

Costs versus Benefits

Some even argue that the net effect of climate change on the world will be positive, due to increased growing seasons, less severe winters and the like.  

No, many if not all argue that there are distinct positives from CO2 emissions. There is a positive externality from increasing atmospheric concentrations of CO2 if only to provide an offset to the negative consequences of the same. A net out is required, at least in theory. (Actually trying to determine the tradeoff in the real world runs smack dab into the knowledge problem.)

Were I a utilitarian, and if I placed substantial faith in such cost-benefit studies, I might find these arguments convincing, but I’m not and I don’t. Even if these skeptics are correct that global warming will not be catastrophic and that the net effects in the near-to-medium term might be positive, there are still reasons to act.

“To act.” Is Adler talking about government coercion? If so, why did he not just say “for the government to act” or “for global governments to act” or “every government to act”? For an alleged classical liberal, this is very loose language. 

Other parties can “act,” after all. Corporations, good citizens, civil society. Government, and global government, is quite another matter. But even within civil society, should corporations uneconomically reduce CO2 emissions? Should individuals prioritize their philanthropic dollars to the climate issue rather than, say, alleviate poverty? What is a “no regrets” policy in this regard.

Sea Level Rise

Accepting, for the sake of argument, that the skeptics’ assessment of the science is correct, global warming will produce effects that should be of concern. Among other things, even a modest increase in global temperature can be expected to produce some degree of sea-level rise, with consequent negative effects on low-lying regions. Michaels and Balling, for instance, have posited a “best guess” that sea levels will rise 5 to 11 inches over the next century. 

Fair enough. But sea level rise has been a few inches per decade–and little changed from decades ago.  And the alarm of sea-level rise has been in the news (and part of an alleged scientific consensus since 1988) to remove this part of a tort argument/claim.

Such an increase in sea levels is likely manageable in wealthy, developed nations, such as the United States.

Why is this true? And what does this suggest for the policy debate? Adler is supposedly a classical liberal speaking….

Poorer nations in the developing world, however, will not be so able to adapt to such changes. This is of particular concern because these effects will be most severe in those nations that are both least able to adapt and least responsible for contributing to the concentration of greenhouse gases in the atmosphere.

Tort Law Approach

It is a well established principle in the Anglo-American legal tradition that one does not have the right to use one’s own property in a manner that causes harm to one’s neighbor.  There are common law cases gong back 400 years establishing this principle and international law has long embraced a similar norm.  As I argued at length in this paper, if we accept this principle, even non-catastrophic warming should be a serious concern, as even non-catastrophic warming will produce the sorts of consequences that have long been recognized as property rights violations, such as the flooding of the land of others.

Introducing tort law in the climate debate is beyond problematic from beginning to end.

Alder jumps from a general view of the human influence on climate (good for some, bad for others, in whole we don’t know) to focus on the alleged losers. How can uncertain science assign causality? What if the loser benefits from CO2 elsewhere? What are the court costs and judgments involved.

In fact, the courts have recently considered tort claims, and their verdicts have been clear.  Expect future tort attempts to be untenable also.

Many so-called skeptics note that environmental activists and some climate scientists exaggerate the likely effects of anthropogenic warming, distorting scientific findings and overstating the extent to which contemporary events (hurricanes, etc.) may be linked to human activity to date.  But the excesses of climate activists and bad behavior by politically active scientists (and the IPCC) do not, and should not, discredit the underlying science, or justify excoriating those who reach a different conclusion.  Indeed, most skeptics within the scientific community readily accept the basic science.  

Bad behavior within the close-knit climate science community, such as revealed by Climategate, speaks for itself. It goes hand-in-hand with bad, exaggerated science. An appeal to “basic science” just begs the question of where the science stands in light of evidence. 

First, the federal government should support technology inducement prizes to encourage the development of commercially viable low-carbon technologies. For reasons I explain in this paper, such prizes are likely to yield better results at lower cost than traditional government R&D funding or regulatory mandates that seek to spur innovation.

What is the track record of government R&D? And why not let Civil Society handle this challenge. But, really, is this the best use of (scarce) R&D dollars compared to other challenges? There is an opportunity cost to every act of government and Civil Society.

Second, the federal government should seek to identify and reduce barriers to the development and deployment of alternative technologies.  Whatever the economic merits of the Cape Wind project, it is ridiculous that it could take over a decade for a project such as this to go through the state and federal permitting processes. This sort of regulatory environment discourages private investment in these technologies.

Bringing up wind and solar as viable mass alternatives to fossil fuels indicates an expertise problem in the energy field. If streamlining the process of siting wind projects is the author’s new “no regrets” strategy, the about-face is quite a reversal. (One wonders why the author did not mention nuclear power in this regard, the only scalable alternative to fossil-fuel-fired power generation.)

Third, I believe the United States should adopt a revenue-neutral carbon tax, much like that suggested by NASA’s James Hansen.  Specifically, the federal government should impose a price on carbon that is fully rebated to taxpayers on a per capita basis.  This would, in effect, shift the incidence of federal taxes away from income and labor and onto energy consumption and offset some of the potential regressivity of a carbon tax.

The argument that a revenue-neutral carbon tax is viable in the real world is bubble-world academic thinking. It is one thing to theoretically prefer one type of government intervention to another in a perfect or “pure” form; it is quite another to argue that it is real-world proof.

For conservatives who have long supported shifting from an income tax to a sales or consumption tax, and oppose increasing the federal tax burden, this should be a no brainer.  If fully rebated, there is no need to worry about whether the government will put the resulting revenues to good use, but the tax would provide a significant incentive to reduce carbon energy use.  

Classical-liberal tax policy has much to do with broadness and fairness and little to do with so-called taxing alleged “bads.” A sin for one might be a pleasure for another, whether concerning sugar or tobacco. And carbon dioxide could be a good, not a bad, in what is a very uncertain, open-ended debate.

Further, a carbon tax would be more transparent and less vulnerable to rent-seeking and special interest mischief than equivalent cap-and-trade schemes and would also be easier to account for within the global trading system.  All this means a revenue-neutral carbon tax could be easier to enact than cap-and-trade.  And as for a broader theoretical justification, if the global atmosphere is a global commons owned by us all, why should not those who use this commons to dispose of their carbon emissions pay a user fee to compensate those who are affected.

Fourth and finally, it is important to recognize that some degree of warming is already hard-wired into the system.  This means that some degree of adaptation will be necessary. Yet as above, recognizing the reality of global warming need not justify increased federal control over the private economy. There are many market-oriented steps that can, and should, be taken to increase the country’s ability to adapt to climate change including, as I’ve argued here and here, increased reliance upon water markets, particularly in the western United States where the effects of climate change on water supplies are likely to be most severe.

Actually, this is an argument against pricing CO2 or other government measures since time works against government mitigation given the warming properties of CO2 (logarithmic effect). With each passing day, adaptation becomes the reality for the global warming dollar, as it were.

I recognize that a relatively brief post like this is unlikely to convince many people who have set positions on climate change.  I can already anticipate a comment thread filled with charges and counter-charges over the science. But I hope this post has helped illustrate that the embrace of limited government principles need not entail the denial of environmental claims and that a concern for environmental protection need not lead to an ever increasing mound of prescriptive regulation. And for those who wish to explore these arguments in further detail, there’s lots more in the links I’ve provided throughout this post.

No, this is hardly convincing. For starters, the professor has not even mentioned an elephant in the room with a US-side carbon tax–the necessity of global, country-by-country tariffs (“border adjustments”) to prevent other political jurisdictions (such as China or India or Mexico) from “free riding” on US CO2 rationing.

From a history of thought perspective, the question is why did an avowed classical liberal jettison classical liberal arguments in buying into climate alarm/forced energy transformation. Is the physical science really that clear? Is the opportunity for government mitigation really that robust (and the ability of market adaptation that poor)?