The two sides in debate about climate change and the proposed response of a cap and trade system are represented by two recent opinion pieces in the WashPost. Robert Samuelson presents the skeptical view in an April 29 article Selling the Green Economy. Kristen Sheeran and Mindy Lubber offer a rebuttal in the May 6 article The Cost of Climate Inaction.
My objective in this post is to highlight how the climate change issue is similar to the problem of cigarette smoking. Both problems involve actions taken today that have uncertain long term consequences. In the case of climate change the use of carbon guzzling technologies today may lead to climate change coupled with economic disasters. Sheehan and Lubber write that climate change “promises to disrupt agricultural patterns, set off a scramble for dwindling resources, raise sea levels, propel population shifts and require massive emergency spending …” However as Samuelson points out “models have a dismal record of predicting major economic upheavals or their consequences. They didn’t anticipate the present economic crisis. They didn’t predict the run-up in oil prices to almost $150 a barrel last year. In the 1970s, they didn’t foresee runaway inflation.” In other words the disasterous effects are highly uncertain.
Smoking is similar. Although there is clear statistical evidence that cigarette smoking raises the probability of contracting heart and lung disease, emphysema and other maladies, smoking does not affect all smokers this way. No one really knows why some people are affected and others are not. Nonetheless, young smokers know that whatever the probabilites are, most effects will not occur until long in the future.
In the meantime smoking generates definite short run benefits in much the same way as use of carbon guzzling technologies is cheaper than using clean alternatives. It is easy to explain why many young people choose to smoke in the face of the evidence; they clearly believe that the short term benefits outweigh the uncertain long-term costs. In the same way we can explain why energy users will prefer to keep their addiction to cheaper carbon guzzling technologies. Again the short term benefits exceed the uncertain long term costs. This is why when gasoline prices rose to over $4 per gallon in the US last year we did not hear people applauding the changes and saying how they wished the price would rise even further so they could avert the climate disaster in the future. Instead there was dispair coupled with anger directed at the oil companies. We might expect a similar outcry if a cap-and-trade system significantly raises carbon technology prices.
There is one important difference between smoking and climate change though. The long term effects of climate change are much much much more complicated and uncertain than the effects of smoking. The effects of smoking have been studied intensively for 50+ years and there are still gaping holes in our knowledge of its effects. Nonetheless in contrast to climate change effects, smoking effects are incredibly simple. With smoking we’re talking about no more than the effects of various chemical substances on an individual human body. In contrast the economic effects of climate change are so much more complicated that they really should be viewed as unknowable at this stage.
Sheehan and Lubber ignore this problem when they say, “Each new scientific report brings proof of a changing climate that promises to disrupt agricultural patterns, …” (my italics). However no objective observer should accept this proof and these promises. Sheehan and Lubber are building an argument based on faith instead.
In contrast Samuelson is absolutely correct when he says, “Actually, no one involved in this debate really knows what the consequences or costs might be. All are inferred from models of uncertain reliability. Great schemes of economic and social engineering are proposed on shaky foundations of knowledge. Candor and common sense are in scarce supply.” His argument is not based on faith, but rather on the recognition of our scientific limitations.