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Date: Wed, 29 Dec 2004 03:39:13 -0500
To: improvetheworld &AElig umich.edu
From: ckiekint &AElig engin.umich.edu
Subject: Re: climate change
Status: O

The whole issue of global warming actually reminds me of Pascal's wager. For
those who need a background briefing: Pascal basically argues that belief in
god is an optimal strategy as long as there is *any* possibility that god
exists, since even an infinitesimally small probability of exchanging an
eternity of torment in hell for an eternity of bliss in heaven outweighs the
(essentially 0) cost of believing in a mortal life.

The same principle applies to the global warming debate: Even if there is a one
in a million chance that the worst case scenario will happen, we should do
everything in our power to prevent/delay it. This is because the worst case
scenario is the end of humanity, which far outweighs the cost even, say, 10% of
the US GDP per year. In this case we have additional very bad outcomes with
increasing probability (e.g. several billion people dead and economies
destroyed) that add to the expected value of preventative action.

Now, moving on to potential solutions:

I'm not particularly sold on the idea of pollution rights trading in this case.
There seem to be numerous potential problems, including (off the top of my
head):
 - Enforcement. Who exactly is going to make sure that people aren't producing
more greenhouse gases than they have a right to under the system? To do this
properly would require international policing, and that sounds very expensive.
 - Who gets to set the overall limit? Since powerful countries (ie, the US) are
going to be net buyers in the system, they have the incentive to argue for very
loose overall limits to keep prices low, destroying any value the system might
have had in the first place.
 - And how are the initial rights allocated? Any alternative is going to make
someone unhappy. (By population? land mass? current industrialization? GDP?)

To take a separate path, I think it makes sense to institute an incrementally
increasing tax on the use of fossil fuels here in the US, regardless of
international agreements like Kyoto. If started now, such a program could be
instituted gradually and avoid major shocks to the economy. For instance, we
could institute a new tax on all fossil fuel use that increases by 2% a year
for the next 40 years; thus, we would have a 2% tax next year, 10% in 5 years,
etc. (or some variation of this).
Such a progam would:
 - Provide incentives to develop and adopt alternative energy sources, by making
them relatively less costly.
 - Decrease US demand for fossil fuels, including foreign oil (big political
points).
 - Provide many side benefits including cleaner air and the corresponding
reduction in health issues and related costs (allergies, lung cancer, etc.)
 - Provide the government with additional revenue, which could be used for
multiple purposes. The top two on my list would be general tax breaks to offset
the increased energy costs and job creation subsidies to ease any job losses.

If done properly, the overall economic cost of this progam should be bearable,
and the benefits are large. The main problems are political. For one thing, it
is very difficult to sell higher taxes (especially on gas) to the public. The
other major problem is that this represents a huge shift in money and jobs from
current energy companies to companies that sell alternative fuels. Naturally,
the current energy companies are going to object quite strongly, and they seem
to have a rather considerable influence in Washington.

Of couse, in the end it isn't really a question of whether we will switch to
alternative energy, but rather how we want to make the transition. We can do it
gradually with relatively little pain, or wait until there is a crisis and try
to make a very quick change. The way politics works, we're probably headed for
the quick painful way.

You've probably all stopped reading by this point, so I'll leave it at that.

Chris

> very useful discussion.  Sounds like pollution rights trading is the right
> solution here.
>
> "One way to begin to overcome the opposition to Kyoto from developing
> nations, Congress, and the President, would be to start a system of
> marketable quotas, for example of CO2 emissions, that would be traded on a
> worldwide exchange." -- Gary Becker
>
>
> --- \/   FROM Matthew Rudary AT 04.12.21 15:10 (Today)   \/ ---
>
> > Becker (a Nobel-prize-winning economist) and Posner (a Circuit Court
> > judge) discuss global warming and the Kyoto protocol this week on their
> > blog, at http://www.becker-posner-blog.com/
> > Interestingly, Posner, who is fairly conservative, supports the US
> > signing the Kyoto protocol.
> >
> > Matt
> >
> > Daniel Reeves wrote:
> > > Thanks Chris.  Those are worth reading.  I once came across a Car and
> > > Driver article (someone in the lab taped it to the wall) lambasting
> global
> > > warming research.  I found the premise of the article disgusting:  that
> > > there isn't enough proof that the observed climate changes are human
> > > influenced.  It's like pooh-poohing getting your brakes checked because
> > > not all the mechanics agree that your car is a time bomb and the ones who
> > > think it is are using questionable evidence.
> > >
> > > In other words, even if the actual probability is quite low that the
> > > climate changes are human-caused, we still desperately need to act.
> > >
> > > that's my $0.02.
> > >
> > > oh, one more thing, since it relates to the AAA debate.  Can't read all
> > > that much into this but I just googled around and found an anti kyoto
> > > treaty website quoting a AAA publication from 1998 about how "only"
> 13-17%
> > > of scientists believe things like global warming is caused by humans or
> > > that there are catastrophic consequences to not reducing greenhouse
> gases.
> > >
> > > Actually, aside from that shameful quote from AAA, the website made some
> > > seemingly good points about why we shouldn't adopt Kyoto.  Could someone
> > > with a clue impart their cluefulness this way?
> > >
> > > Danny
> > >
> > > To get on or off the improvetheworld list:
> > >  http://ai.eecs.umich.edu/people/dreeves/improvetheworld
> > >
> > >
> > > --- \/   FROM Chris Kiekintveld AT 04.12.07 18:00 (Dec 7)   \/ ---
> > >
> > >
> > >>Some fun stuff on slashdot today about global warming:
> > >>
> > >>First, an article about a study of the last 10 years of
> > >>articles published in peer-reviewed science journals about
> > >>global warming shows an unusual degree of consensus on
> > >>the basic question of global warming:
> > >>
> > >>http://www.sciencemag.org/cgi/content/full/306/5702/1686
> > >>
> > >>And, a group of geologists presents a pretty clear overview
> > >>of the case that "The dangers posed by climate change are no longer
> > >>merely possible and long-term. They are probable, imminent, and global
> > >>in scope.":
> > >>
> >
> >>http://ebulletin.le.ac.uk/features/2000-2009/2004/12/nparticle-vkt-hgf-t4c
> > >
> > >
> >
>
> --
> http://ai.eecs.umich.edu/people/dreeves  - -  google://"Daniel Reeves"
>
> "Devote yourself to loving others, devote yourself to your
> community around you, and devote yourself to creating something
> that gives you purpose and meaning." -- Morrie Schwartz
>
>