Trump boasts of this tremendous business acumen. Of course, his history of bankruptcies and his frequent financial bailouts by his father give lie to those claims. In that light, we are presented with a business opportunity that I am certain he will miss.
The NYT reports that:
With time running out to avoid dangerous global warming, the nation’s leading scientific body on Wednesday urged the federal government to begin a research program focused on developing technologies that can remove vast quantities of carbon dioxide out of the atmosphere in order to help slow climate change.
The 369-page report, written by a panel of the National Academies of Sciences, Engineering and Medicine, underscores an important shift. For decades, experts said that nations could prevent large temperature increases mainly by reducing reliance on fossil fuels and moving to cleaner sources like solar, wind and nuclear power.
But at this point, nations have delayed so long in cutting their carbon dioxide emissions that even a breakneck shift toward clean energy would most likely not be enough. According to a landmark scientific report issued by the United Nations this month, taking out a big chunk of the carbon dioxide already loaded into the atmosphere may be necessary to avoid significant further warming, even though researchers haven’t yet figured out how to do so economically, or at sufficient scale.
This sounds dire and, of course, it is. However:
The panel’s members conceded that the Trump administration may not find the climate change argument all that compelling, since the president has disavowed the Paris Agreement. But, [Stephen W. Pacala, a Princeton climate scientist who led the panel] said, it’s quite likely that other countries will be interested in carbon removal. The United States could take a leading role in developing technologies that could one day be worth many billions of dollars.
But, of course, it’s unlikely that the U.S. will be a leader in the area unless the U.S. government encourages the development of carbon removal technologies. Stated simply, we have been presented with the greatest business opportunity in the history of mankind, but the Current Occupant is willfully blind to it.
I have posted a copy of the full report here. The page of the National Academies of Sciences, Engineering and Medicine where the report or individual chapters thereof may be downloaded is here.
8 thoughts on “Bad Business Judgment”
It’a very relative business opportunity. The transition to a low-emissions economy is already creating large winners (Tesla, Jinko, BYD, Oersted…) and losers (Peabody Coal, Adani …) with more to come. Thee’a a market demand for electricity and transport, and profit opportunities. I fail to see how how carbon sequestration in the carbon-negative economy of the 2050s can be profitable without an artificial (if very necessary) carbon price or equivalent thumb on the scales from governments. The incentives will have to be big enough to get the job done, but it will look more like the regulated markets for say milk and tanks than anything in Adam Smith.
Query: Is carbon pricing a “thumb on the scales”? I don’t view it that way. I merely see carbon pricing as filing a gap in the market wherein the “price” does not properly reflect the negative externalities. From that perspective, the lack of carbon pricing is the thumb on the scales.
Pricing of externalities depends on subjective judgments of values and debatable assessments of costs. So in a sense that’s a “thumb on the scale,” when the traditional idea of a scale is a device that you put your purchase on and it tells you quite accurately and reliably how much it weighs.
Would it be wrong to try to do it anyway? In my opinion that should be a resounding NO, it wouldn’t be wrong; it ought to be REQUIRED. We could debate any pricing model developed by a panel of Nobel-winning economists, not to mention, it would be entertaining to see them trying to get at least two of them to agree with each other. Nevertheless, is seems to me to be an absolutely necessary step, and if we have to accept taking the average pricing estimated by a dozen different models, that might not be so bad anyway.
After all, when we look at the NOAA Hurricane website, we can see a projected storm track portraying the average of a lot of separate models, but the result is an astonishing advance in predictions, with almost unerring accuracy. Compare that to a relatively few years ago, when the main prediction we paid attention to was “Wow, this is gonna be a big one; better get outa town.”
Cap and trade seems to be one way to address this, but that relies on an estimate of the “correct” amount of emissions, which is probably no less of a guess than the correct price.
I prefer the tax, I think, as it just seems simpler, but the two policies are, in the abstract, largely equivalent.
I should correct my first comment. Cap-and-trade or a carbon tax do not in fact work in a carbon-negative world, where there are hardly any emissions left to tax. A carbon tax can fund the early stages of a sequestration programme, but you have to shift the financing to general taxation eventually as emissions dwindle. Or confiscatory fines on the fossil fuel criminals – which is what they will be seen as.
My modest proposal that fossil fuel companies should simply be told now they can extract and sell as much carbon as they like, provided they put it back, has unaccountably failed to find wide support. It is based on a Spanish proverb: “Take what you like, said God – take it, and pay for it.”
The business judgment rule is a presumption that in making a business choice, the administrators of a company acted on a knowledgeable foundation. Dissertation Writers
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