Climate Change and Externalities: We’re so Effed!

June 25, 2017

Climate Change and Externalities: We’re so Effed!

What if they’re right? What if the Prius drivers—the very same people who hug trees, hate money, despise G-d, loath progress, bash the good old U.S. of A., avoid taxes, eat granola, detest freedom, and drink white wine—are right? What if we’ve created a giant oven and are baking ourselves to a crisp? Does anyone want to wait around for the finished product? To learn in 30 or 40 years that increasing temperatures and rising sea levels weren’t just another climate cycle?

I wrote these words 10 years ago. I share them now in the midst of record-breaking Southwestern heat. And because, despite all of the piety about not leaving debt for the next generations—noise we only hear from Rs when they’re not in charge, for deficits don’t matter when they have the checkbook—climate change represents a claim on the future orders of magnitude greater than anything we can imagine.

I won’t debate the science here, for there’s nothing to debate. (Gotta love those R pols. They tell us the science just isn’t clear enough, but they refuse to appropriate a dime to pay scientists to get to their required level of certainty.) Instead, I’m focused on externalities.

Per Investopedia, “[a]n externality is a consequence of an economic activity experienced by unrelated third parties [which] can be either positive or negative.” Externalities abound when we examine climate change. Most obviously, nobody owns the carbon residue of our First World lives. Like litter—literally—we leave it behind without a moment’s serious thought.

But there are other externalities. Secondary to climate change are opportunities to reduce carbon emissions. Opportunities which offer grand scale potential for profits. Cutting edge, high-tech stuff. Economic turf we owned in the United States.

On the negative side, again, the United States used the Middle East as a filling station for the better part of a century. We dealt with sovereign nations, mostly, and ended up with sinking sand and lots of angry, hopeless, poor people. Sideways anger has killed thousands and left us fearful. (I don’t suggest a lack of culpability on the part of killers, but if you leave enough people angry, hopeless, and poor, long enough, you’ll get externalities.)

So here we are. President Trump announced the United States’ withdrawal from the Paris Agreement on June 1. In his speech he said he’d

begin negotiations to reenter either the Paris Accord or a really entirely new transaction on terms that are fair to the United States, its businesses, its workers, its people, its taxpayers.  So we’re getting out.  But we will start to negotiate, and we will see if we can make a deal that’s fair.  And if we can, that’s great.  And if we can’t, that’s fine.

Anyone seen any evidence that negotiations have begun?

Merrily we’ll roll along! We’ll spew as we choose, having decided as a matter of policy that negative externalities don’t matter. We will also miss out on the positive externalities, as we can hardly expect American industry to lead the way into a cooler, greener future when we have doubled down on late 19th century energy sources, like coal and oil.

There will be fixes, for sure. For example, on rising sea levels we will see higher, stronger sea walls. And they’ll work, but only here and there, for as every homeowner with an aging roof knows, a patch here generates a leak in another place.

We failed, decades ago, when we didn’t demand some level of responsibility for the consequences of our lifestyle. Then, two years ago, the world stepped up. Not enough, and way late, but the world came together on the issue. (Only Syria and Nicaragua didn’t sign the Paris Agreement. Syria was busy with other stuff, while Nicaragua wanted something stronger.) Then, the United States of America walked away.

Stop. Think. The United States of America stands next to a failed state—Syria—as the only nations taking a pass on efforts to deal with climate change.* I guess we better hope the Prius Drivers—and the more than 95% of climate scientists, who really know what’s what—are just plain wrong.

*Paris might not have been the only game in town. But, when about 99% of the world agrees on a framework for starting to address a problem, the self-proclaimed exceptional nation ought to be leading the way.

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