“No Regrets” Climate Policy: First, Do No Harm

Rather than adopt costly regulatory measures that serve to suppress energy use and economic growth, policy makers should seek to eliminate government interventions in the marketplace that obstruct emission reductions and discourage the adoption of lower emission technologies. Such an approach is a ‘no regrets’ strategy….

– Jonathan Adler, “Greenhouse Policy without Regrets: A Free Market Approach to the Uncertain Risk of Climate Change” (2000).

In the face of the Green New Deal, proponents of personal and economic freedom have a simple, sensible alternative. It respects consumer sovereignty and taxpayer welfare. It does not add to the federal deficit or swell the Federal Register. It takes a neutral stance on the climate-science debate between those who argue that emissions of carbon dioxide (CO₂) are good or bad.

And for conservatives, libertarians, and moderates, it happily leaves cows, backyard grilling, and cheeseburgers alone.

This policy is no regrets.

A no regrets climate policy endorses emission reductions of CO₂ and methane that make sense in their own right, i.e. are economical. It relies on personal decision-making and not top-down governmental edicts by a political/intellectual elite.

What are some no-regret policies that have appeal across the political divide? They include:

• Removing subsidies at home and abroad that might keep energy prices below market levels; this will reduce energy demand and eliminate related emissions.
• Eliminating special subsidies to ethanol and other biomass energies that may increase greenhouse gas emissions on net.
• Introducing ‘peak’ (congestion) pricing when demand is highest in transportation.
• Introducing peak pricing in retail gas and electricity markets to reduce demand and eliminate related emissions.
• Streamlining corporate tax codes (such as those in the US) to facilitate capital upgrades to more energy-efficient equipment.
• Liberalizing developing-country economies to allow electricity to replace the burning plants and dung (primitive biomass), which produces soot aerosols thought to be a global warming agent.

The natural substitution of natural gas for coal in electric generation to reduce GHG emissions is one example of the market’s no-regrets policy in action. So are reduced methane emissions from natural gas infrastructure in the US, which have fallen 16 percent while gas production increased by half.

No-regrets for corporations should also be based on do-no-harm, win-win. Voluntary reductions should not penalize shareholders or consumers. Decisions about energy efficiency should make financial sense based on economics, not only engineering.

A broader no-regrets policy in a free-market environment would include strictures against corporate rent-seeking whereby firms seek mandatory GHG restraints for competitive advantage over their business rivals.

Insurance Not

A no-regrets approach should not be promoted as “insurance” for a climate-change “problem.” Not even the ineffective-to-date Paris climate agreement can claim to be a climate insurance policy, much less the actions of an individual company or industry. Even a Green New Deal, if it entirely eliminated US greenhouse-gas emissions, would avert only a few tenths of a degree at best.

“No insurance policy is worthwhile if the cost of the premiums exceeds the protection purchased,” explains Jonathan Adler. “For greenhouse insurance to be worthwhile, it must either reduce the risks of anthropogenic climate change or reduce the costs of emission reductions designed to achieve the same goal, without imposing off-setting risks, such as those which would result from policies that slow economic growth and technological advance.”

On all these counts, a coercive climate policy fails.

Adaptation, Not Mitigation

Adaptation to deal with worst-case weather events, as well as future climate change, natural or anthropogenic, is part of a prudent climate policy for individuals, organizations, and government.

For example, as recently summarized in Yale Climate Connections, the family-owned McIlhenny Company has built a 20-foot levee around its Tabasco plant on Avery Island off the Louisiana coast to insure against flooding. The man-made barrier also helps preserve the island’s natural defense, the marsh. It’s a win-win: “For my family, it’s very important that Avery Island is here and we do a lot of work to protect it,” stated the great-great grandson of the company founder.

Floods and wildfires and hurricanes and tornadoes are all studied and learned from in free market economies. As they occur, self-interested actions emerge as if led by an invisible hand. Wealth turns to health in a free, prosperous commonwealth.

Conclusion

“A true ‘no regrets’ approach to climate change is not greater government controls on economic activity, but fewer,” Adler has emphasized. “Economic growth, market institutions, and technological advance are often the most effective forms of insurance that a civilization can have.”

No-regrets, furthermore, is not only the best policy for climate change, it is right for promoting the micro freedoms that Americans have come to expect, from driving to flying to cruising to grilling.