The Political Economy of Geoengineering
By Bryan Caplan
The complete videocast of the AEI mini-conference on geoengineering is now up, including Scott Barrett’s target speech, Thomas Schelling’s comments, and my comments. Like Bart Simpson, I’m my own toughest critic, but I was pleased as punch with my extension of rational irrationality to international environmental policy. My main points:
1. Barrett’s paper blends together two distinct questions: (a) What makes sense to do about global warming, and (b) What countries will in fact do about global warming.
2. On the traditional “realist” view of international politics, this blending makes sense. According to this theory, countries act in their objective self-interest, so slippage between optimal policy and actual policy can only be caused by differences in national self-interest and transactions costs.
3. From my point of view, however, optimal and actual policy often diverge even for purely domestic questions. Since people have biased beliefs about the effects of policy, highly inefficient policies can and do win by popular demand. If domestic politics are this defective, why should we expect international politics to be any better?
4. What does this have to do with global warming specifically? Well, Barrett explains that geoengineering might turn out to be an extremely cost-effective solution to global warming. He then goes on to discuss the political barriers to its adoption. But he seems to ignore the most obvious barrier of all: Many – perhaps most – people would dogmatically oppose the geoengineering solution no matter how strong the evidence in its favor.
5. But won’t people also fervently resist extremely costly solutions for global warming? It depends. If the cost is visible and noticeably reduces living standards, then popular opposition might well be intense. But smart politicians can get around this problem by obscuring the cost (imposing emissions regulations rather than carbon taxes, for example), and making sure that the costs come in the form of lower growth rather than absolute declines in living standards.
6. Bottom line: All things considered, geoengineering looks far superior to other policy options on the table. But despite its advantages, it probably won’t be adopted, because public opinion in the world’s leading democracies won’t stand for it. And even dictatorships usually try to avoid big clashes with public opinion (not to mention the leading democracies), so China probably won’t save us either.