Monday, December 14, 2015

Climate change and economic growth



We have a climate change deal! We have a climate change deal! Or so they say in Paris.   
The deal has two problems.   
First, it has no enforcement mechanism. In other words, we can’t force anyone to do anything.   Secretary Kerry confirmed it Sunday. This is a deal that means nothing because no one will put sanctions on anyone who is polluting the air or burning too many gallons of fossil fuel.
Second, the dirty little secret about climate change is that it impacts economic growth, as Eduardo Porter wrote:
Much of Europe experienced no growth at all in the 500 years that preceded the Industrial Revolution. In India, real incomes per person shrank continuously from the early 17th through the late 19th century.
As world leaders gather in Paris to hash out an agreement to hold down and ultimately stop the emissions of heat-trapping greenhouse gases that threaten to make Earth increasingly inhospitable for humanity, there is a question that is unlikely to be openly discussed at the two-week conclave convened by the United Nations. But it is nonetheless hanging in the air: Could civilization, as we know it, survive such an experience again?
The answer, simply, is no.
Mr. Porter raises the issue that no one did at Paris, i.e. economic growth! In other words, Mr Porter is talking about the economic activity that will raise the taxes that financed all of these activities in Paris. No growth, no taxes, no expense accounts for diplomats or anybody else! 
This is why this Paris deal will be as successful as the Kyoto Treaty of the late 1990s.   
Climate change is a great topic or the kind of conversation that makes a lot of liberals feel good. It is not the kind of topic that gets very far in legislatures, especially when the conversations turns to increasing your electricity bill or shutting the facility that employs your constituents.  
I am not saying that we shouldn’t concern ourselves with the environment. At the same time, we’ve done a pretty good job in the U.S. as anyone who remembers visiting LA in the 1960s can tell you.    
P.S. You can listen to my show (Canto Talk) and follow me on Twitter.
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