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Published on Tuesday, May 13, 2008 by
Climate Policy: From ‘Know How’ to ‘Do Now’
by Herman E. Daly

Recent increased attention to global warming is very welcome. But much of it is misplaced.

We focus too much on complex climate models, which ask things like how far emissions will increase carbon dioxide concentration, how much that will raise temperatures, by when, with what consequences to climate and geography, and how likely new information will invalidate model results. Together these questions can paralyze us with uncertainty.

A better question for determining public policy is simpler: “Can we continue to emit increasing amounts of greenhouse gases without provoking unacceptable climate change?”

Scientists overwhelmingly agree the answer is no. The basic scientific principles and findings are very clear. Focusing on them creates a world of relative certainty for policy.

To draw a parallel, if you jump out of an airplane you need a crude parachute more than an accurate altimeter. And if you take an altimeter, don’t become so bemused tracking your descent that you forget to pull the ripcord.

The next question we should ask is, “What causes us to emit ever more carbon dioxide?”

It’s the same thing that causes us to make more of all kinds of wastes: our irrational commitment to economic growth forever on a finite planet.

If we overcome our growth idolatry, we can then ask, “How do we design and manage an economy that respects the limits of the biosphere so economy and biosphere both will survive?” But we are so fixated on maintaining an ever-growing economy that we instead ask, “By how much will we have to increase efficiency to maintain growth in gross domestic product?”

Suppose we answer, “By doubling efficiency,” and succeed. So what? We will then just do more of all the things that have become more efficient and therefore cheaper, and will then emit more wastes, including greenhouse gases. A policy of “efficiency first” does not give us “frugality second” — it makes frugality less necessary.

But if we go for “frugality first” — sustainability first — with a national tax on carbon, then we will get “efficiency second” as an adaptation to more expensive carbon fuels. Efficiency cannot abolish scarcity, despite what politicians say, but it can make scarcity less painful.

We must throw out our assumption that economic expansion is always good. There is much evidence that GDP growth at the margin in the United States is uneconomic growth, growth that increases social and environmental costs faster than it increases production benefits.

It is not hard to see how the reality of uneconomic growth sneaks up on us. We have moved from a world relatively empty of us and our stuff to a world relatively full of us, in one lifetime. In the empty world economy the limiting factor was manmade capital; in the full world it is remaining natural capital. Barrels of petroleum extracted once were limited by drilling rigs; now they are limited by remaining deposits, or by the atmosphere’s ability to absorb the products of combustion.

But we continue to invest in manmade capital rather than in restoration of natural capital.

In addition to this supply-side error, we have an equally monumental error on the demand side. We fail to take seriously that beyond a threshold of income already passed in the United States, happiness depends not on what we have, but on what we have relative to what our friends, co-workers and neighbors have.

What we need is a stiff severance tax on carbon as it emerges from the well and mine. Besides discouraging everyone’s use of climate-altering fossil fuels, this would enable us to raise enough tax dollars to replace regressive taxes on low incomes. Let’s tax the raw material, not the value added to it by processing and manufacturing. Higher input prices bring efficiency at all subsequent stages of production, and limiting depletion ultimately limits pollution.

Setting policy by first principles still leaves some uncertainties. It will require provision for making midcourse corrections. But at least we would have begun moving in the right direction. To continue business as usual while debating the predictions of complex models in a world made even more uncertain by the questions we ask is to fail to pull the ripcord.

Herman E. Daly, a former senior economist for the World Bank, is a professor at the University of Maryland’s School of Public Policy. His books include “Steady-State Economics” and “Beyond Growth.” He wrote this comment for the Land Institute’s Prairie Writers Circle, Salina, Kan.

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