“No Regrets” Climate Policy: Doing Much by Doing Little

“Climate change can seem like such a huge and intractable problem, its causes so beyond our control, that it’s easy to throw up your hands and say, “There’s not much I can do about it.” It seems like we’re always being told that no matter what steps are taken, it’s not enough.”

– Anastasia Pantsios, “MIT Crowdsourcing Project Asks for Your Help in Solving Climate Crisis,” EcoWatch, April 3, 2015.

Anastasia Pantsios has unwittingly described one of the major problems of the climate crusade–so little temperature effect from so much activism. But policy activism (carbon taxes, cap-and-trade, command-and-control) is actually bad climate policy because it allows weather/climate to impose its greatest costs on the human condition.

Public policy towards the climate-change issue should begin – and end – with reforms that make sense in their own right; that is, ‘win-win’ initiatives that reduce emissions but do not hurt energy consumers or taxpayers. These initiatives include:

• Removing subsidies that keep energy prices below market levels, thereby reducing energy demand and eliminating related emissions.
• Removing 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 and retail gas and electricity markets to reduce demand and eliminate related emissions.
• Reducing emissions of the air pollutants, especially particulate matter (PM), nitrogen oxides (NO_x) and carbon monoxide (CO), in accordance with science-based regulation.
• Streamlining corporate tax codes (such as those in the U.S.) to facilitate capital upgrades to more energy-efficient equipment.
• Liberalizing developing-country economies to reduce primitive biomass usage that produces soot aerosols, which are thought to be a global warming agent.Ending debate on prospective cap-and-trade programs to remove the (mal)incentive for firms to postpone cost-effective GHG emissions reductions to achieve a higher baseline for future emissions. [1]

Corporations may adopt policies to reduce GHG emissions as part of their own no-regrets climate policy. Such reductions, if they are truly voluntary, would not penalize consumers or shareholders; they would make financial sense by increasing efficiency (economic, not engineering), and/or complying with air pollution or toxic emission requirements. A broader part of a true no-regrets policy would include strictures against corporate ‘rent-seeking’ where firms seek mandatory GHG restraints for competitive advantage over their business rivals.

A no-regrets approach should not be promoted as ‘insurance’ for a climate-change ‘problem’. Not even the Kyoto Protocol reductions – which in the aggregate are beyond what the political system can deliver – can claim to be a climate insurance policy. The protocol is not a cure for man-made ‘global warming’ since the emissions reductions would result in a non-measurable impact on global climate change for decades.

Adaptation, not mitigation, is a true climate-change policy in that societal wealth is maximized to best neuter extreme weather events and, over longer time frames, climate change, natural or anthropogenic. Part II and III in this series will present the wealth-is-health, free-market case by Terry Anderson and Donald Leal, adapted from their new book: Free-Market Environmentalism for the Next Generation.

[1] Another potential strategy, removing non-market barriers to potentially increase the amount of electricity generated by nuclear power, would be more than offset by eliminating subsidies such as the Price-Anderson Act, which caps insurance liabilities in case of a nuclear accident. Hydropower, too, can join the energy mix if viable in a free market.

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This post is adapted from a 2004 booklet I wrote for the Institute of Economic Affairs, Climate Alarmism Reconsidered (2004), pp. 119–121.