Cool Headed Thoughts About Climate Change Adaptation

Marco Visscher serves up a thoughtful piece about climate change adaptation.  I didn’t know that my book is reviled by climate activists.   I am a “climate activist”.  I’m working with the California Air Resources Board to help implement AB32 to be cost effective. I support gas taxes of $5 a gallon. I’m on record as supporting higher electricity prices and water prices.    Where Joe Romm and I disagree (and I respect his passion but not his economic logic),  focuses on my confidence that free market capitalism continues to reinvent its game.  We are not passive victims here.  We will have an ever growing set of possible adaptation strategies due to innovation.    The “big question” here is the role that human capital can play in protecting us against “Mother Nature” and the role that free market capitalism plays in directing our best minds to work on these problems.

Author: Matthew E. Kahn

Professor of Economics at UCLA.

10 thoughts on “Cool Headed Thoughts About Climate Change Adaptation”

  1. “Free market capitalism” isn’t going to get us out of anything. What may help us will be human beings responding to “incentives,” only *some* of which will be financial, and they aren’t necessarily the most influential. Love of the Holocene, that’s an incentive. Love of critters. Etc.

    Anyway, why do you still call it “free market” capitalism? It sounds so old-fashioned. We have regs up the ying-yang, and we probably need more of them. FMC isn’t even an ideal to most of the rest of us outside your profession, btw. If it even means anything now.

    And my guess is, the greener types don’t like you because of this “adaptation” talk, which sounds an awful lot like defeatism. Maybe you don’t mean it that way, but that’s how it sounds.

  2. Well, I’ve seen some fairly hostile responses in the comments to your posts here. There’s an orthodoxy about, and you’re not singing from the same hymn book exactly.

    I’m with you on raising the price of burning gasoline – it seems to me that an optimal way to do it would involve high congestion charges, which would encourage folks to car pool, to try to combine errands, etc. If you just tax the gas $5 a gallon, you’ve a little more than doubled the gasoline cost of driving – if you have a 27 mpg car, and your gasoline cost with tax is $9/gallon, your gasoline cost per mile is only 34 cents – well under the fifty-odd cents AAA thinks is the current overall cost of driving. I don’t know how much you are going to deter, of the worst and most damaging rush hour stuck in traffic fumes everywhere activity.

    With your big gas price increase (I’m in DC, so my local example might be driving in from Woodbridge, 20 miles) the extra cost from $9 gallon gas, up from $4, will be about $3-4. For that you are going to give up NPR, and risk having somebody with B.O. in the bus seat next to you, and your cell phone on speakerphone talking with whoever you want? I don’t feel confident. With a honking big congestion charge, though, let’s say you have a transponder which gets you a credit card charge of $15 every time you drive in during rush hour – maybe you risk the Prince William Express bus. Result: the road clears! Everybody gets to work twenty minutes sooner! The state goes out of deficit status! We can pay for repairs on the worrisome bridges! There is pie in the sky by and by! Better, no?

  3. The “big question” here is the role that human capital can play in protecting us against “Mother Nature” and the role that free market capitalism plays in directing our best minds to work on these problems.

    “The last major presidential candidate from Illinois, Adlai Stevenson, was approached by a voter in the 1950s. “Governor, you have the vote of every thinking American,” she said. “That’s nice,” Stevenson replied. “But I need a majority.””

    At least the rich will be able to exploit free markets…um…and…erm…well, there are no free markets but they’ll be able to game the economy to their benefit. That’s how it works. The best minds will work on saving themselves and their families, and if anything trickles down, bonus.

  4. You’ve got to drink the whole glass, for the cultists to admit you drank the koolaid. One or two sips doesn’t count…

  5. Matthew: We are not passive victims here.

    Amen.

    And I don’t think you can find a better example of active victimization than Global Warming melting the northern ice cap and the feverish drilling for oil on the newly exposed seabed.
    It’s a lot like watching bacteria in a petri dish running at full steam out to the edge of its agar…

  6. The free market will not help with climate change. Maybe you mean a well regulated and controlled market? That will succumb to regulatory capture. If I were to read your book would I find a disconnected economist’s opinions on what a market could do, or will I find real answers about how to defeat the accumulation of capital which will never abide limits (barring an immediate existential crisis)? If it is the former, the book amounts to the academic masturbation of the privileged and I am totally uninterested in that.

  7. Well, I haven’t read your book and I don’t know anything about your work on AB32 (has it been described online?), but I note that in your posts on this site you spend very little, if any, time advocating for energy taxes and a lot of time arguing, in effect, that nothing need be done about climate change because capitalism is adaptive. This seems to me to be an attempt to placate people with magical thinking. If your book reflects this, you really shouldn’t be surprised that it’s reviled.

  8. “It’s a lot like watching bacteria in a petri dish running at full steam out to the edge of its agar…”

    And, of course, the bacteria economists are telling us, one generation before they hit the edge “What do you mean there’s a problem? We have HALF the damn dish still available for growth and colonization”…

  9. We have HALF the damn dish still available for growth and colonization”

    And we can put our smart bacteria on the problem of finding more agar for the rest of us!!

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