There is a tendency or those on the political right to invoke economic theory when developing or critiquing environmental policy. This can make sense or not, depending on the context. For example, a cap-and-trade system for dealing with the emissions causing acid rain (sulfur dioxide and nitrogen oxides) has contributed to significant reductions (though of course not elimination) of these pollutants, and as a result acid rain is currently less of a threat to northeastern U.S. ecosystems than it once was. So, many advocate a similar system to control carbon dioxide, which has recently become recognized as a pollutant for its role in exacerbating global climate change.

The basic premise of cap-and-trade is that government - such as the E.P.A. in the U.S., or state government - sets a total cap on allowed emissions for the whole country or region within it. They then issue a set number of licenses totaling that cap. These licenses can then be traded on the open market, so that companies emitting CO2 can either spend money reducing their emissions, or buying more licenses - whichever makes more financial sense. If the cost of reducing emissions (through special technology or alternative energy production, for example) is low for most companies, the price of the licenses will drop. If, however, the cost is high, licenses will go up too. because of the increased demand. Advocates of the approach support its reliance on the free market rather than excessive top-down regulation.

There are problems as well. For the system to accomplish its intended purpose, the cap must be set using the most objective scientific means possible, which seems an unlikely prospect, especially given the current political climate. But even if science is given a chance, CO2 is a global pollutant. That is, everyone's CO2 emissions affect everyone else. By contrast, acid rain in the northeastern U.S. was easily traceable mainly to coal-burning power plants in the east and Midwest, and thus the emissions were a local problem solvable by local policy. The harm done by carbon dioxide is genuine, but much less tangible and not at all direct. This is used by those opposed to emissions caps to insist that capping our own country's CO2 would be meaningless if other countries do not do the same, and it would somehow destroy our economy to do so. (This is despite the obvious counter argument that a genuine government mandate to develop alternative energy sources would spur a whole new economy for the U.S. However, the tangible economic benefits would not be immediate, but long term, which does not play well in capitalist societies.)

Of course, this is the point of the Kyoto treaty - to get as many countries on board as possible. Kyoto is a necessary first step because in practicality countries do have different levels of wealth and technological ability to control emissions, so to expect them to do so equally off the bat is absurd. The idea is that asking more of the fully technological countries will motivate the development of alternatives to greenhouse-gas-producing energy, that could then be implemented in other countries as well. But without the world's biggest emitter on board, it all breaks down completely.

We all know that getting the world to agree on scientifically reasonable global carbon dioxide limits is somewhat less likely than the proverbial snowball in hell. More recent coverage will give cap opponents more ammunition to argue there is no point in even trying. Should we really use the problems to excuse a mentality of "winner take all, and who gives a damn what the world is like in a few decades, after I am gone?" What if instead, the U.S. (as suggested often by Thomas Friedman) made a conscious decision to be a world leader in alternative technologies? (Mandating ethanol production from corn to justify huge taxpayer giveaways to corporate agriculture does not count.) What if the U.S.'s mantra turned into, "this is a great opportunity to show the world's people, most of whom hate our guts right now for our arrogance, greed, and imperialism, that we are the leader for remaking our planet's future." Even the cynics who only care about money surely see the benefits of replacing foreign oil, the defense of which has cost enormous amounts of resources and lives over the years, with foreign good will, which is a benefit?

There are times in history when what we really need is a little more government in select areas, not less. Since the "anti-government" crowd happily uses fear to justify the invasion of personal privacy, why isn't there, in vocal opposition, an actively pro-government voice that uses hope to stop the sub-prime mortgaging of our future? Probably because bringing up difficult truths doesn't win elections.

Labels: economics, environment, politics