Why Carbon Can’t Be Jammed

Joseph Heath is always thoughtful and thought-provoking (author of Filthy Lucre: Economics For People Who Hate Capitalism and The Rebel Sell: Why the Culture Can’t Be Jammed). He doesn’t think we’re going to get much cooperation on carbon or that “progressives” are thinking clearly enough about solutions. From an interview with The Walrus:

… For example, I think there is no chance of a regulatory solution to the problem of carbon emission. If global warming’s ever going to get fixed, it’s going to get fixed through technological innovation. The argument you hear from the poor countries is that all the carbon in the atmosphere right now was produced through the industrialization of Western countries, so when you do emissions targets, the focus should not be on annual emissions per capita, but rather on your contribution to the stock of carbon in the atmosphere. Therefore, China and India should be able to industrialize and produce as much carbon in that process as Europeans and North Americans produced in the course of their industrialization. Now that’s actually a pretty compelling view-it’s easy for us to say, now that we’re totally industrialized, “A-ha! Now we have to stop producing carbon.” But India and China say, “Look, the only reason it’s a problem is because you guys put all that carbon out there.” Now that is completely not the North American or the European perspective. The carbon in the atmosphere, we treat as being some kind of thing out there. If you look at the debate, to the extent that there is a debate in Canada, it’s all about annual emissions, it’s not about contribution to the carbon stock.

So you have a particular conception of justice, determining what’s a fair arrangement in North America and Europe, and you have another, fairly compelling view of justice coming out of the third world. I cannot imagine circumstances under which those parties would agree-it just seems inconceivable. And as a result, nobody is going to accept emission controls that are going to be binding at all. What we have is a global collective action problem that will eventually destroy the planet. And yet, if you look at systems of international trade that are mediated by the market, you have vast networks of completely global cooperation that involve free rider problems that are potentially just as serious, and yet the cooperation proceeds seamlessly. Why? Because there are well-established property rights, and there’s a market.

So part of the appreciation for the market comes from the recognition that cooperation is actually incredibly hard, and that wealthy industrial societies have only ever been created in two ways: on the basis of a market, or on the basis of a planning bureaucracy. The one that was organized on the basis of a planning bureaucracy was worse in every single respect than the market-based kind of organization. In other words, central planning was worse for the environment, it was worse for human health, it was catastrophic in terms of human death and repression, totalitarianism, and it was less egalitarian than, for example, democratic welfare states like Sweden. There’s no perspective from which planning was better, and so it’s all leading in the same direction, right? [laughs]. You can have pre-industrial civilization, which is irrelevant, because, you know, that’s not going to happen. So you haven’t got a lot of options. It’s just not obvious that there has to be another way of doing things. The default arrangement is that people fail to cooperate with one another, and you get a Hobbesian state of nature.

…

So the impression I’m getting is that the biggest mistake the Left makes is imposing its moral considerations directly on the market, which is more or less self-sufficient with regulatory oversight from government.

Yeah, often what happens is that people apply their moral intuitions at kind of the wrong level. There’s nothing wrong with having a reaction to first-order results that the market generates, but often people try to correct the problems by directly intervening at the first-order level. And because the market is a staged competition, you often can’t tinker around at the first-order level. What you need to do is tinker around at a higher-order level, with rule changes and so forth…

Another example would be with carbon. One of the arguments you often hear from people who oppose carbon taxes is that imposing a carbon tax doesn’t guarantee that you’re going to get a reduction in emissions. With cap-and-trade, you can directly specify how much carbon you want to emit-you control quantity and let the price vary. But with carbon taxes, who knows, maybe they’ll just pay the tax. Now, there is no question that if you put a tax on carbon, the amount of carbon used is going to drop. The only problem is that you have to wait and see by how much. Look, the City of Toronto put a five-cent tax on plastic bags, and there’s a seventy percent reduction in the amount of plastic bags being generated in the GTA. I mean, five cents! There are some people who cannot tolerate the idea that it’s going to be left to the market to determine by how much carbon will be reduced, which is, in my mind, kind of crazy. You have to be willing to let it ride for a little bit, and then if you don’t get the reductions you want, you increase the tax. I mean the tool is capable of doing everything that everybody wants to do. I think the mistake people make is wanting to directly resolve problems that are actually more effectively resolved indirectly.

… I mean, environment, poverty, social justice-they’re all real issues [laughs]. So nothing needs to be changed in terms of that focus, people just have to get more serious about the social science required to figure out what causes the issues and how to fix them. And you have to be willing to engage in social science done by people whose views you find objectionable. In other words, sometimes the right-wing sociologists are actually right about what’s causing a particular social problem. It doesn’t mean you have to be right wing to accept that.

So the Left might benefit from knowing its own limitations.

Yeah. And also, realizing that the world is in flux, that there are certain kinds of arrangements that made a lot of sense thirty years ago that maybe don’t make sense anymore. For example, privatization of electricity generation. There’s a compelling argument for having the distribution grid be publicly owned. And when I was young, there was a compelling argument for electricity generation as well to be publicly owned. But in the last twenty years, there’s no longer a compelling case, because it’s not a natural monopoly. In fact, environmental stuff is pushing in exactly that direction, because if you want to be able to feed the grid from your solar arrangement, you’re basically a private electricity generator. The old-fashioned view that all electricity needs to be public sector was based on technology that has completely changed. So people need to be flexible, to realize that even though your moral view hasn’t changed, the consequences of that moral view-state activities, the private sector, etc.-that changes.