HOME
Message Board
CURRENT COLUMNS
- Editor's Corner
- Blogfest 2005
- Commentary
- Commentary Too
- Down The Middle
- Faulking Around
- Global Warning
- This guy walks into a bar...
- Investing 101
- Faulking Opinions
- Off The Rail
- Words
ARCHIVES
LINKS
CONTACT US
 | |||
Global Warning - April 25, 2007 - Printable Version
- Walk Softly and Carry A Big Stick
by Robin Buckallew
Now that the powers that be can no longer deny global warming, the big topic of debate is…what, if anything, are we going to do about it? There seem to be several schools of thought on this. First, there are the deniers. Oh, they’re not denying global warming anymore – they’re just denying that it has anything to do with human activities. This makes it easy – we’re going to do nothing, which means we keep doing what we’ve been doing for the past several decades: consume fossil fuels like they’re inexhaustible, drive everywhere we go, keep our heaters and air conditioners set on “kill”, and go our merry way. Then, there are those that acknowledge that it is human-induced, but just throw up their hands in despair and say “it’s too late!” The course of action proposed by these folks seems to be basically the course of action proposed by the deniers. I’d give you my opinion of the ideas involved in these two positions, but I don’t like to use that sort of language in mixed company. Then, there are the folks who admit that there is global warming, admit that it is human-induced, and admit that they would LIKE to do something. Oh, but that costs too much. We might have to pay more for fuel, or for products that require fuel in some part of their manufacture or transport (which, in some way or another, would be essentially any product manufactured by human means). Apparently these folks are going to be the ones in charge of the US delegation to the upcoming UN summit on global warming. They have their marching orders, and they are all geared up to be obstructionist, and block any really major changes – except, of course, those that don’t cost anybody any money. Reminds me of the old cartoon – a man is standing there with his hands up as a robber points a gun at his head saying “Yer money or yer life!” The victim says decisively “Take my life, please. I need my money for my old age”. Yes, we’ve definitely got Jack Benny in charge of our global warming negotiations.
There are, however, some people who acknowledge global warming, who admit that it is tied to human activities, and who think that we have a moral imperative to do something about it. They differ only on the question of what. Enter John Kerry stage left…Newt Gingrich stage right. Debate ensues – debate based on sound principles of logic and reason. Both acknowledge global warming. Both agree that humans hold the responsibility. Then, the debate begins. Kerry wants government to set mandatory caps – Gingrich wants totally free market solutions, with tax incentives. Kerry believes business will not act without mandatory regulations. Gingrich believes mandatory regulations will simply make the businesses act obstructionist, and fight at every turn, but if you offer them tax incentives, they’ll do the right thing. It’s the old familiar argument – carrot vs. stick. Which will make your toddler behave better – giving him a cookie every time he behaves, or walloping him every time he misbehaves? For most of us, it seems like a no-brainer – head for the cookie jar. I would like to say – not so fast. It sounds good – but are we really going to achieve the best results that way? Let me ask you – how many cookies can you give your kid for acting right before he gets sick of cookies and can’t be bribed anymore? How well are you preparing Junior for the real world if you teach him that he gets rewarded just for acting the way he is supposed to act? Just how much does it cost you in cookies to persuade Junior to behave like a decent member of the family instead of a naked ape? So, which will it be – the carrot? Or the stick? Let’s use history as a tool to advise the future.
Throughout the 20th century, the battle has raged between the folks who believe in unfettered capitalism as the cure for all society’s ills, and those who believe in some level of government regulation to protect society from the ills of unfettered capitalism. Early in the century, the stick tended to be a favored weapon as Theodore Roosevelt rigorously implemented the Sherman anti-trust act, and busted up the giant oil companies, took on the robber barons, and in general made himself rather unpleasant to magnates and would-be magnates. By the close of the 20th century, however, the carrot was in prominent play, as Ronald Reagan helped usher in the “Greed is Good” decade of the 80s, with serious relaxation of governmental oversight and enormous trust in the powers of the free market to resolve anything that needed to be resolved. The stick was broken in two, and the carrot dangled temptingly in front of greedy corporate mules to get them to move. Now, at the dawn of the 21st century, left and right alike sing the praises of the free market (though with vastly different definitions), and write endless, dense, unreadable articles about how the market can solve our problems if we just run it the way THEY propose instead of the way we are running it now. Both want to dangle a carrot – they just have differences of opinion over exactly which variety of carrot, and what size the carrot needs to be (organic carrots, unfortunately, aren’t on the menu for most).
Sooner or later in the course of a human lifetime, it becomes necessary to separate myth from reality, fact from fantasy. Somewhere back in history, someone said something, and it got written down. Then, it got reported in the news. Later, it got on the radio, and then on the TV. Then, someone (maybe several someones) included it in a book. It became entrenched as FACT. It became conventional wisdom. Sometimes, this “fact” had no evidence to back it up, but was just someone bloviating, speculating, or pontificating. Now, no matter what, people believe it. It has to be true – it’s always been true, hasn’t it? Don’t all the best minds live by it? Don’t they teach it in all the best schools? Didn’t Time and Newsweek both print something about that last week? We have a lot of myths we assume are reality – and conversely, a lot of realities we assume are myths. Let’s look at a few.
“Environmental regulations cost too much for the amount of benefit they bring to society. All the studies show that we pay millions for every life saved.” Myth or reality? Most people believe this – including the vast majority of environmental advocates. This was a central theme of all the classes I took on Environmental Economics – whether taught by an economist or an environmental scientist. I read articles in both the left wing and right wing press that make this statement. Both left and right alike have suggested solutions for this problem, which for the most part are some variation on setting a suggested limit and allowing business and consumers to make decisions that will eventually lead us into the vicinity of meeting that limit. Few question this wisdom. This, in spite of the fact that it really isn’t totally true. If you read these articles for long enough, you will soon begin to notice something – they all cite the same regulation. They all talk about the extra cost of requiring youngsters on an airplane to have their own seat, their own seatbelt, and not be sitting on the lap of a parent. This regulation, it turns out, has had enormous cost to consumers who have to pay big money for extra seats, so they eschew the airplane altogether and drive to their destination. This, of course, leads to the opposite effect intended by the well-meaning but intrusive regulation, since flying without a separate seat for the child puts the lives of all in less danger than driving, even with seatbelts. So, I’ve read article after article after article discussing this regulation – what about all the OTHER regulations? Well, let’s see. In 2003, the White House Office of Management and Budget issued a report on a study of environmental regulations, and showed very clearly that the benefit gained by society from the environmental regulations outweighed the cost of implementing the regulations – by THREE TO FIVE TIMES. You heard me – society gained benefits equivalent to three to five times the cost of implementing the regulations. Myth busted.
“Corporations will do the right thing if you give them the proper incentives, but they will simply dig in their heels if you make rules to make them behave.” Myth or reality? Sounds like reality. Most people believe it. After all, we ourselves tend to resent rules telling us what to do, but will sometimes do the right thing if we’re offered a reward. Our children will often clean their room for a crisp, clean $20 bill (or even an old, dirty, torn one), but will just sit stubbornly on their bed if we threaten them. Corporations exist to make money, so if you offer them money – well, what could be simpler? Unfortunately, human nature being what it is, things just can’t always be simple. Let’s take a look at A Tale of Two Cities (well, OK, a Tale of Two States, but it just isn’t quite as euphonious). The two states I have in mind are those small, remote, out of the way ones you probably rarely hear about on the news – California and Texas. California had a little problem – smog. Dense, life-threatening, picnic-ruining smog. They could see their air. They had to do something. So, they implemented stringent regulations. They took out the stick, and they just began hitting every polluter in sight – and even a few that they couldn’t see. Meanwhile, Texas, because of its heavy industrialization, also began having troubles with their air quality. So, with the great wisdom of the Texas politician, the governor and legislature came up with a solution – the carrot. They would offer to allow the corporations to voluntarily reduce their emissions, and drew up an agreement for the corporations to sign. Many corporations signed on. They received awards from the governor, with great fanfare, and got lots of publicity. California’s corporations moaned and cried, while those in Texas danced and sang with the local green groups. Everybody shook hands and smiled for the photographer. Things were really looking up for Texas! So, what has been the result? Texas corporations got a lot of publicity – but the measures they implemented fell way short of the mark – if indeed they implemented any at all. Most didn’t. But they can point to their award and say “See how green?” Further Texas cities (and counties) are being added to the EPA list of areas that do not meet the air quality standards. None are being removed. Meanwhile, back on the west coast, among all the latte-drinking weirdos in the Birkenstocks, California air has been getting cleaner. Oh, it’s not clean yet – there’s still a long way to go – but at least they’re on the right road. San Diego has been removed from the EPA list of cities that don’t meet standards. That’s right, San Diego. Houston now has the distinction of having the dirtiest air in the nation. The stick – not the carrot. Myth busted.
“You just can’t make laws telling people what they can’t do”. I won’t even honor this with a myth-busting story. I don’t know how this ever got into the common litany. We all know better. We have laws telling us where we can drive, and how fast. We have laws limiting who we can marry – and how many. We have laws telling us we have to send our children to school. We have laws telling us we can’t paint our house purple with orange polka-dots. All these laws have been passed for the good – or the perceived good – of society. We have a great many laws telling people what they can’t do, and these laws are intended to protect society. Sometimes they fail. Sometimes they are not necessary. The beauty of our system is, if our lawmakers pass laws that do not benefit society but impose arbitrary limits on us without reason, we can vote them out. In addition, if our politicians fail to pass laws imposing appropriate restrictions on those who would harm society, we can also vote them out, and vote in lawmakers with more guts, willing to do the dirty work. It’s time we do just that.
In addition to all of the above, most of the corporations, faced with tax incentives for doing the right thing, will find ways to manipulate the legal system to get the tax incentives without implementing significant changes in their behavior. Witness the current lobbying going on by the giant agribusiness corporations to change the definition for organic so that it includes nearly everything they are growing using heavy pesticides and fertilizers. This would give them the opportunity to slap an organic label on the same old slop, and sell it to you at a higher price without increasing their cost to produce it. Witness the number of “environmentally friendly” businesses that get big enough and famous enough to be attractive to large corporations – and immediately take the money and sell out, while the corporation moves in, changes the “environmentally friendly” operations to “environmentally friendly” rhetoric, trading on the company’s reputation to make huge profits. Witness the way corporations so readily lie, rewrite their books, and bribe high officials to keep business as usual (can anyone say ‘Enron’?). I say, leaving the Earth in the tender care of these rapacious bullies is just a little bit too much risky business for me.
In the final analysis, I think it’s time to bring back the stick. I think we need a lot less Ronald Reagan, and a lot more Teddy Roosevelt (the first, and possibly last, environmental president). Like a little child who will choose to sweep the mess under the bed to get the cookie, the corporations have found many ways to get the carrot without actually moving. Implementing still more costly tax incentives to try to persuade corporations to be good citizens is a cost society just can’t afford at this time – especially if it isn’t going to work any better than it’s worked to date.
Voice your opinion on our message board (you don't have to sign up to post).