“From the East Coast to the West and across the political spectrum, House lawmakers remain divided over how to protect America from losing a competitive edge to China and other nations under climate change legislation.

“At issue is how to prevent cement, steel, aluminum and other energy-intensive industries from responding to proposed new laws that could have the effect of slashing emissions by shuttering factories only to reopen them in countries unfettered by costly regulations.”

– Lisa Friedman, “Climate law poses trade risks; lawmakers unsure how to respond” E&E News, April 28, 2009 (subscription)

Marlo Lewis’s post, Is Cap-and-Trade Inherently Protectionist?, linked carbon dioxide regulation, U.S.-side tariffs (“border adjustments”), and international protectionism. Indeed, the interventionist dynamic–regulation expanding from its own complications and shortcomings–is a major theme of political economy.…

The funny thing about carbon pricing is that even if you take the latest IPCC report as gospel, and even if you assume all of the governments around the world implement a perfectly efficient carbon tax, even so the “efficient” carbon tax ends up being fairly low for a few decades, and then it ramps up as atmospheric concentrations increase.  (See William Nordhaus’s new book treatment of his “DICE” model for an excellent exposition.)

The intuition behind this result is that even the scary projections of catastrophic climate change don’t occur for more than one hundred years, and so discounting these future damages to the present leads to a modest externality from current emissions of another ton of carbon dioxide.

This phenomenon explains the fury with which partisans in the climate change debate argue over the proper “social discount rate.” …

University of Washington atmospheric scientist David Battisti and Stanford co-author Rosamond Naylor have an article in this week’s Science magazine that is making headlines across the world.

Why? Because they contend that we are fast heading towards a global food crisis as a result of a future temperature rise projected to accompany increasing atmospheric levels of greenhouse gases.

However, the paper itself is long on rhetoric and short on supporting science, with the conclusions based largely on improper reasoning.

They assume that people will sit idly by and slowly perish as the climate changes around them, doggedly clinging to outdated and failing agricultural practices instead of adopting new crop varieties and farming techniques as the climate warrants. This is known as the “dumb farmer scenario.”

But, farmers aren’t dumb. The development and adoption of new technologies and crop varieties is the primary reason why crop yields have increased many fold over the past century.…