T Nation

Conservative Environmental Policy


#1

This is some interesting stuff - Newt Gingrich is an idea man, and this seems like the kind of thing McCain or Romney (whoever is the GOP nominee) could get behind and promote as a viable alternative to command-and-control type carbon emissions caps.

http://tnr.com/politics/story.html?id=804a9eec-1414-4fdc-bccd-23a9e9d566ad

[i]Let The Markets Work by Newt Gingrich and Terry L. Maple
Part Two of a debate about what conservatives can do--and haven't done--to confront climate change.
Post Date Monday, January 28, 2008

We agree with Michael Shellenberger and Ted Nordhaus's proposition ( http://www.tnr.com/politics/story.html?id=1d3ed260-b021-42b2-9937-f9158bd3b714 )that government has an important role to play in responding to the challenge of global climate change.

In our book, A Contract with the Earth ( http://www.amazon.com/Contract-Earth-Newt-Gingrich/dp/0801887801/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1202157303&sr=8-1 ), we argue that America needs an energy and environmental strategy that passes a three-part test. It must: marginalize the oil dictators, reduce the amount of carbon discharged into the atmosphere, and create an even more productive economy for the future. We reject, along with Shellenberger and Nordhaus, the approaches of those who insist on a bureaucratic command-and-control structure to oversee our environmental future. We think that any strategy that relies on more carbon taxes, more government regulations, more control by bureaucracies, and more litigation by trial lawyers will inherently fail to meet our three-part test.

In contrast, we believe that the American experience proves again and again that a market-oriented approach that encourages entrepreneurs to use new science and new technology creates more progress than any other system. We believe the same will be true for a new energy and environmental strategy that meets the three-part test.

We have consistently argued that modest incentives will not advance innovation, which is why we outline bold government incentives in our book. Robust government tax incentives and both public and private prizes for innovation are likely to stimulate the kind of "transformational technologies" that are needed. For example, a prize of $1 billion would help our nation sprint to a hydrogen economy and dramatically speed up our movement towards a domestically produced form of clean, sustainable energy. Stimulating the marketplace of new ideas will also provide opportunities for massive technology transfer as rapidly developing countries look to America for cleaner, greener sources of energy. Further, we have argued that an effective, decisive American government is absolutely essential if we want to shift from our increasingly dangerous dependence on petroleum products controlled by oligarchies and dictatorships. American innovation in energy will ensure that our nation is both green and free.

We believe that the investment required to achieve our environmental objectives will be in the billions, but an investment of this size is very achievable, in our opinion, particularly if the money is used to offer the large incentives and prizes that will stimulate significant private investment. American universities and industries lead the world in innovation, and we must continue to encourage this trend through a national commitment to science and engineering education. Conservatives should lead the way in advocating significant government investments in energy, science, and technology.

An effective government stimulates innovation by the reduction of bureaucratic red-tape and burdensome regulation. A conservative approach to environmental problem-solving does not bloat the federal bureaucracy; instead, it provides the necessary incentives to stimulate entrepreneurial solutions to meet the energy and environmental challenges we face. This approach is also the best way to protect our national security, grow the economy, and renew the earth.


Newt Gingrich was the Speaker of the House of Representatives from 1995 to 1999. Terry L. Maple is a professor of psychology at Georgia Tech. [/i]


#2

No!

A “free market” solution means the government should NOT intervene in the market. Cutting taxes and removing unnecessary regulation is all that is required as that is intervention. Newt does not seem to know what the free market is when he speaks about such policy.

Public funds should not go to private industry for any reason. Risk is inherent to entrepreneurship and government should not be funding that nor should it reward industry as that is why businesses earn a profit on successful investment.

The markets DO work – it is the government that keeps them from working by taxing and regulating. Public funding in the market is NOT the free market but rather part of the problem we have seen, for example, with the auto and health care industries.


#3

One thing about markets is that they don’t work well to address externalities that create costs for others. Not all externalities can be addressed, but to the extent that a problem that is an externality needs to be addressed, sometimes government action can be useful. This is particularly true when you have international aspects to issues - Kyoto-style caps are bad news (not only would they likely not work if everyone signed on, but China, India, Brazil et al wouldn’t even be held to restrictive caps under Kyoto, making it worse than worthless.

That said, a more market-friendly approach is preferable to a government-imposed cap or restriction - I have many fewer problems with government subsidizing technological solutions than I do with governmental regulatory solutions.

This post by Jonathan Adler is also good:

http://www.volokh.com/archives/archive_2008_01_27-2008_02_02.shtml#1201968666

[i][Jonathan Adler, February 2, 2008 at 11:11am] Trackbacks
Climate Change, Cumulative Evidence, and Ideology:

Almost every time I post something on climate change policy, the comment thread quickly devolves into a debate over the existence of antrhopogenic global warming at all. (See, for instance, this post ( http://volokh.com/posts/1201821183.shtml ) on “conservative” approaches to climate change policy.) I have largely refused to engage in these discussions because I find them quite unproductive. The same arguments are repeated ad nauseum, and no one is convinced (if anyone even listens to what the other side is saying). I have also seen nothing in these exchanges that would alter my current assessment of the scientific evidence.

Given my strong libertarian leanings, it would certainly be ideologically convenient if the evidence for a human contribution to climate change were less strong. Alas, I believe the preponderance of evidence strongly supports the claim that anthropogenic emissions are having an effect on the global climate, and that effect will increase as greenhouse gases accumulate in the atmosphere. While I reject most apocalyptic scenarios as unfounded or unduly speculative, I am convinced that the human contribution to climate change will cause or exacerbate significant problems in at least some parts of the world. For instance, even a relatively modest warming over the coming decades is very likely to have a meaningful effect on the timing and distribution of precipitation and evaporation rates, which will, in turn, have a substantial impact on freshwater supplies. That we do not know with any precision the when, where, and how much does not change the fact that we are quite certain that such changes will occur.

So-called climate “skeptics” make many valid points about the weakness or unreliability of many individual arguments and studies on climate. They also point out how policy advocates routinely exaggerate the implications of various studies or the likely consequences of even the most robust climate predictions. Economists and others have also done important work questioning whether climate risks justify extreme mitigation measures. But none of this changes the fact that the cumulative evidence for a human contribution to present and future climate changes, when taken as a whole, is quite strong. In this regard, I think it is worth quoting something Ilya wrote below about the nature of evidence in his post about 12 Angry Men" ( http://volokh.com/archives/archive_2008_01_27-2008_02_02.shtml#1201922977 ):

The “divide and conquer” strategy of dissecting each piece of evidence independently can make for effective advocacy, but it is not a good way to find the truth.

Don’t get me wrong. I believe that there is room to question the global warming “consensus,” particularly as represented by activist groups and some in the media, and to challenge various climate scenarios and their policy implications. I am unpersuaded that climate change threatens civilization or justifies truly draconian measures. Nevertheless, I believe climate change is a serious concern. And as much as I wish it were not the case, I believe the threat of climate change justifies some measures that the libertarian in me does not much like. But that’s the way it is.
[/i]


#4

[quote]BostonBarrister wrote:
One thing about markets is that they don’t work well to address externalities that create costs for others. [/quote]

Externalities are only created by government intervention since the nature of the market is always UNKNOWN. We call this risk and it is why businesses make a profit when they make a good investment. No business would enter into competition if the rewards were not inherently there.

How does the government know which technology to fund? Why should the taxpayer fund a potentially bad investment like ethanol (or even a good one if we don’t get to profit directly from it)?

Misdirecting funds not only drives costs up in that particular industry but it also drives up prices in other areas that are affected by it, such feed corn with ethanol (which is certainly an externality).

A free market means no government directing or managing investments and or technology research – No government involvement at all.


#5

[quote]LIFTICVSMAXIMVS wrote:

Externalities are only created by government intervention since the nature of the market is always UNKNOWN. We call this risk and it is why businesses make a profit when they make a good investment. No business would enter into competition if the rewards were not inherently there.[/quote]

This paragraph does nothing to shed light on “externalities”.

The very nature of externalities is that they are private - your pollution infringes on my property rights. Government does not create them.

Handling externalities as a purely private dispute was once more practical - in the modern world, less so. Today, given the nature and scope of both the potential of private property harm and the nature of the limited liability forms of business organizations, suing purely in private tort doesn’t always address externalities adequately.

First, the dangers of harm are larger as a matter of technology - and that begins a question round of prevention versus remedy after-the-fact. In light of some of the environmental dangers we could face, prevention is often worth the cost.

Second, traceability and culpability have become even more difficult, particularly as externalities surface years later from the initial pollution. Questions of proof become very difficult - that is, if there is any entity left to sue in the first place.

Third, limited liability in business organizations creates natural problems with securing remedies for externalities - we like the corporate form to spread risk throughout the economy so as to help mitigate and promote risk-taking; with environmental externalities, the natural shield we provide these business organizations that pollute create inadequate remedies for the harm done, especially if the externalities show up years later.

And yet, we recognize that problem, but we don’t want to do away with the limited liability form, given all the benefits it generates in the free economy.

As such, something has to be done about these externalities - we encourage them through spreading risk-taking to shareholders, but limit what can be done about them when the risks go sour. Most of the time, we accept that trade-off because on balance, it usually generates positive outcomes or, in the alternative, clear remedies for those hurt by the risks taken. Environmental externalities in this modern era escape too much of this trade-off, and we have to intervene with something else.

That doesn’t mean I advocate command-and-control solutions, nor do I think private tort actions have no role to play. But environmental externalities are sui generis in many ways, especially in light of scientific risk-taking, so old ideological playbooks won’t do. The private tort system was created to deal with social problems when folks harm each other - we invented it to deal with the problem, it isn’t a magical paradigm that has always been with us. Now we have a new problem - so we invent something to deal with that.


#6

[quote]
BostonBarrister wrote:
One thing about markets is that they don’t work well to address externalities that create costs for others.

LIFTICVSMAXIMVS wrote:
Externalities are only created by government intervention since the nature of the market is always UNKNOWN. We call this risk and it is why businesses make a profit when they make a good investment. No business would enter into competition if the rewards were not inherently there.[/quote]

This is flatly wrong.

[i]“Definition of Externality”

From Econterms
Definition: An externality is an effect of a purchase or use decision by one set of parties on others who did not have a choice and whose interests were not taken into account.

Classic example of a negative externality: pollution, generated by some productive enterprise, and affecting others who had no choice and were probably not taken into account.

Example of a positive externality: Purchase a car of a certain model increases demand and thus availability for mechanics who know that kind of car, which improves the situation for others owning that model.[/i]

Not all negative externalities need to be controlled, but to the extent we decide that an externality is a large problem, government action of some sort or other is often part of the solution.

[quote]
BostonBarrister wrote:
That said, a more market-friendly approach is preferable to a government-imposed cap or restriction - I have many fewer problems with government subsidizing technological solutions than I do with governmental regulatory solutions.

LIFTICVSMAXIMVS wrote:
How does the government know which technology to fund? Why should the taxpayer fund a potentially bad investment like ethanol (or even a good one if we don’t get to profit directly from it)?[/quote]

The government doesn’t know which technology to fund - that’s the point of doing it as a prize paid to the winner rather than by having the government pick technologies to subsidize.

[quote]LIFTICVSMAXIMVS wrote:
Misdirecting funds not only drives costs up in that particular industry but it also drives up prices in other areas that are affected by it, such feed corn with ethanol (which is certainly an externality).

A free market means no government directing or managing investments and or technology research – No government involvement at all.[/quote]

Higher corn prices is a government-created negative externality for food consumers, and a positive externality for farmers. And I agree it’s generally a bad thing - misallocations of resources are problematic. But free markets can and do create their own positive and negative externalities.

The idea of a prize seems like quite a good solution to me - maybe divided up into several prizes or maybe just winner-take-all. After the prize is awarded the government wouldn’t be on the hook for further funding, and a lot of technology would have been developed in the competition. And the market wouldn’t even necessarily need to choose the same winner as the government - if the prize was “mis-awarded” Vinod Khosla or some other VCs could fund the development and commercialization of one of the “losers.”


#7

Seems to me that heavy fining/taxing pollution would be something to look at. That is, while deregulating and de-taxing business in nearly all other areas.

Often, I see governemnt as punishing admirable behavior (work, savings, investing, etc) while subsidizing bad behavior (entitlement programs) or ideas (ethanol?). So it seems to me we should try to tax negatives when we can. Maybe leave the Fed to tax more universal pollution, such as CO2. And leave states to look at more locally impacting pollution.

Maybe there’s a way to effictively determine pollution footprints and tax/fine businesses at some rate per pollutant emission. But, then turnaround and credit them for reductions in emissions. Seems to me that if we reward innovative CO2 reduction, for example, businesses will develop inhouse departments, or even outsource, to bring down their tax rate.


#8

[quote]Sloth wrote:
Seems to me that heavy fining/taxing pollution would be something to look at. …[/quote]

Some libertarian-types agree with you: http://www.prometheusinstitute.net/environment/


#9

Isn’t McCain the same guy who said global warming’s man-made?


#10

[quote]lixy wrote:
Isn’t McCain the same guy who said global warming’s man-made?[/quote]

He says a lot of things. And people say our current president isn’t very smart. Ha!

The less the government is involved in regulating just about anything, the better. Your local DMV, County Highway Dept, and Post Office should prove my point fairly well.


#11

[quote]lixy wrote:
Isn’t McCain the same guy who said global warming’s man-made?[/quote]

What does that have to do with anything stated above? And better yet how does it SOLVE anything. As usual your comment is worthless and contributes nothing to meaningful dialogue.


#12

[quote]analog_kid wrote:
lixy wrote:
Isn’t McCain the same guy who said global warming’s man-made?

He says a lot of things. And people say our current president isn’t very smart. Ha!

The less the government is involved in regulating just about anything, the better. Your local DMV, County Highway Dept, and Post Office should prove my point fairly well.[/quote]

Smaller well run government good. No government bad.

Where is the candidate that wants to fix the damn problems?
(And don’t give me Paul. His solution is to eliminate the FBI, CIA, EPA, Dept of Ed, FDA, etc.)


#13

[quote]Zap Branigan wrote:
analog_kid wrote:
lixy wrote:
Isn’t McCain the same guy who said global warming’s man-made?

He says a lot of things. And people say our current president isn’t very smart. Ha!

The less the government is involved in regulating just about anything, the better. Your local DMV, County Highway Dept, and Post Office should prove my point fairly well.

Smaller well run government good. No government bad.

Where is the candidate that wants to fix the damn problems?
(And don’t give me Paul. His solution is to eliminate the FBI, CIA, EPA, Dept of Ed, FDA, etc.)

[/quote]

I agree with you about 85%. A small, efficient government is the way to go. The problem with that is not finding a candidate to make the change, it’s getting the American citizen to WANT the change. If personal responsibility wasn’t an absolute foreign concept to the average American, Paul’s policies would work like a charm. It looks great on paper, but you have to come back to the reality of the majority of this country are big, dumb, lazy bastards that need the government to hold their hands from cradle to grave. You can’t have a small well run government when people are too dumb to read a mortgage contract before they sign it and want the fed to bail them out. Wow, you bought more house than you could afford, you took a variable rate on the note, and you get charged a penalty if you pay extra each month. Obviously none of this is your fault. Give me a break! It’s your fault, deal. When this happens, then we can talk about small government, but until then…fugetaboutit.


#14

[quote]analog_kid wrote:
Zap Branigan wrote:
analog_kid wrote:
lixy wrote:
Isn’t McCain the same guy who said global warming’s man-made?

He says a lot of things. And people say our current president isn’t very smart. Ha!

The less the government is involved in regulating just about anything, the better. Your local DMV, County Highway Dept, and Post Office should prove my point fairly well.

Smaller well run government good. No government bad.

Where is the candidate that wants to fix the damn problems?
(And don’t give me Paul. His solution is to eliminate the FBI, CIA, EPA, Dept of Ed, FDA, etc.)

I agree with you about 85%. A small, efficient government is the way to go. The problem with that is not finding a candidate to make the change, it’s getting the American citizen to WANT the change. If personal responsibility wasn’t an absolute foreign concept to the average American, Paul’s policies would work like a charm. It looks great on paper, but you have to come back to the reality of the majority of this country are big, dumb, lazy bastards that need the government to hold their hands from cradle to grave. You can’t have a small well run government when people are too dumb to read a mortgage contract before they sign it and want the fed to bail them out. Wow, you bought more house than you could afford, you took a variable rate on the note, and you get charged a penalty if you pay extra each month. Obviously none of this is your fault. Give me a break! It’s your fault, deal. When this happens, then we can talk about small government, but until then…fugetaboutit.

[/quote]

Human nature. People can be lazy, greedy slobs.


#15

And an example of “progressive” environmental policy recommendations:

http://www.onlineopinion.com.au/view.asp?article=6878

EXCERPT:

[i]Liberal democracy is sweet and addictive and indeed in the most extreme case, the USA, unbridled individual liberty overwhelms many of the collective needs of the citizens. . .
There must be open minds to look critically at liberal democracy. Reform must involve the adoption of structures to act quickly regardless of some perceived liberties. . .

We are going to have to look how authoritarian decisions based on consensus science can be implemented to contain greenhouse emissions.[/i]


#16

[quote]Zap Branigan wrote:
analog_kid wrote:
Zap Branigan wrote:
analog_kid wrote:
lixy wrote:
Isn’t McCain the same guy who said global warming’s man-made?

He says a lot of things. And people say our current president isn’t very smart. Ha!

The less the government is involved in regulating just about anything, the better. Your local DMV, County Highway Dept, and Post Office should prove my point fairly well.

Smaller well run government good. No government bad.

Where is the candidate that wants to fix the damn problems?
(And don’t give me Paul. His solution is to eliminate the FBI, CIA, EPA, Dept of Ed, FDA, etc.)

I agree with you about 85%. A small, efficient government is the way to go. The problem with that is not finding a candidate to make the change, it’s getting the American citizen to WANT the change. If personal responsibility wasn’t an absolute foreign concept to the average American, Paul’s policies would work like a charm. It looks great on paper, but you have to come back to the reality of the majority of this country are big, dumb, lazy bastards that need the government to hold their hands from cradle to grave. You can’t have a small well run government when people are too dumb to read a mortgage contract before they sign it and want the fed to bail them out. Wow, you bought more house than you could afford, you took a variable rate on the note, and you get charged a penalty if you pay extra each month. Obviously none of this is your fault. Give me a break! It’s your fault, deal. When this happens, then we can talk about small government, but until then…fugetaboutit.

Human nature. People can be lazy, greedy slobs.[/quote]

Sad but true.


#17

[quote]Valentinius wrote:
lixy wrote:
Isn’t McCain the same guy who said global warming’s man-made?

What does that have to do with anything stated above? And better yet how does it SOLVE anything. As usual your comment is worthless and contributes nothing to meaningful dialogue.
[/quote]

Hush!

BB’s defending that “conservatives” should vote for the GOP nominee no matter who it is. As far as I know, that nominee will be McCain. The fact that the guy believes in global warming which is a total departure from the GOP’s traditional line.

Keep up.


#18

[quote]Zap Branigan wrote:

Human nature. People can be lazy, greedy slobs.[/quote]

And your government enables them.

Sad thing is that many of the people squatting in their homes aren’t just poor people…they were the greedy bastards that wanted to make a quick buck flipping a house or the new homeowners with a great job and no credit who thought refinancing would be a good idea.

I am so glad the Fed continues to lower rates…more credit is the answer to the credit problem. Next we’ll be curing alcoholism with more alcohol.