Is prosperity the principal source of man-made greenhouse gases?

Economics and the environment are clearly compatible concepts. That's not necessarily saying that capitalism and the environment are. In fact, Wall Street and Mother Nature may very well be inherently, inevitably and forever at odds with one other with respect to their visions of how the world really works.

If that's the case, I'd put my money on Nature's plan for sustaining the systems that support life to ultimately prevail. It really is time for an economics as if people and the environment matter. (GW)

Economy vs. Environment

By David Owen
New Yorker
Mar4ch 30, 2009

The week before last, twenty-five hundred delegates, from more than seventy countries, met in Copenhagen to prepare for the United Nations Climate Change Conference, which will take place there in December and will produce a successor to the Kyoto Protocol, which was adopted in 1992 and will expire in 2012. The speakers in Copenhagen were united by a sense of urgency—and for good reason, given the poor record of most participating countries in meeting their Kyoto targets for reducing the emission of greenhouse gases.

So far, the most effective way for a Kyoto signatory to cut its carbon output has been to suffer a well-timed industrial implosion, as Russia did after the collapse of the Soviet Union, in 1991. The Kyoto benchmark year is 1990, when the smokestacks of the Soviet military-industrial complex were still blackening the skies, so when Vladimir Putin ratified the protocol, in 2004, Russia was already certain to meet its goal for 2012. The countries with the best emissions-reduction records—Ukraine, Latvia, Estonia, Lithuania, Bulgaria, Romania, Hungary, Slovakia, Poland, and the Czech Republic—were all parts of the Soviet empire and therefore look good for the same reason.

The United States didn’t ratify the Kyoto Protocol, but Canada did, and its experience is suggestive because its economy and per-capita oil consumption are similar to ours. Its Kyoto target is a six-per-cent reduction from 1990 levels. By 2006, however, despite the expenditure of billions of dollars on climate initiatives, its greenhouse-gas output had increased to a hundred and twenty-two per cent of the goal, and the environment minister described the Kyoto target as “impossible.”

The explanation for Canada’s difficulties isn’t complicated: the world’s principal source of man-made greenhouse gases has always been prosperity. The recession makes that relationship easy to see: shuttered factories don’t spew carbon dioxide; the unemployed drive fewer miles and turn down their furnaces, air-conditioners, and swimming-pool heaters; struggling corporations and families cut back on air travel; even affluent people buy less throwaway junk. Gasoline consumption in the United States fell almost six per cent in 2008. That was the result not of a sudden greening of the American consciousness but of the rapid rise in the price of oil during the first half of the year, followed by the full efflorescence of the current economic mess.

The world’s financial and energy crises are connected, and they are similar because credit and fossil fuels are forms of leverage: oil, coal, and natural gas are multipliers of labor in much the same way that credit is a multiplier of wealth. Human history is the history of our ascent up what the naturalist Loren Eiseley called “the heat ladder”: coal bested firewood as an amplifier of productivity, and oil and natural gas bested coal. Fossil fuels have enabled us to leverage the strength of our bodies, and we are borrowing against the world’s dwindling store of inexpensive energy in the same way that we borrowed against the illusory equity in our homes. Moreover, American dependence on fossil fuels isn’t going to end any time soon: solar panels and wind turbines provided only about a half per cent of total U.S. energy consumption in 2007, and they don’t work when the sun isn’t shining or the wind isn’t blowing. Replacing oil is going to require more than determination.

The environmental benefits of economic decline, though real, are fragile, because they are vulnerable to intervention by governments, which, understandably, want to put people back to work and get them buying non-necessities again—through programs intended to revive ordinary consumer spending (which has a big carbon footprint), and through public-investment projects to build new roads and airports (ditto). Our best intentions regarding conservation and carbon reduction inevitably run up against the realities of foreclosure and bankruptcy and unemployment. How do we persuade people to drive less—an environmental necessity—while also encouraging them to revive our staggering economy by buying new cars?

The popular answer—switch to hybrids—leaves the fundamental problem unaddressed. Increasing the fuel efficiency of a car is mathematically indistinguishable from lowering the price of its fuel; it’s just fiddling with the other side of the equation. If doubling the cost of gas gives drivers an environmentally valuable incentive to drive less—the recent oil-price spike pushed down consumption and vehicle miles travelled, stimulated investment in renewable energy, increased public transit ridership, and killed the Hummer—then doubling the efficiency of cars makes that incentive disappear. Getting more miles to the gallon is of no benefit to the environment if it leads to an increase in driving—and the response of drivers to decreases in the cost of driving is to drive more. Increases in fuel efficiency could be bad for the environment unless they’re accompanied by powerful disincentives that force drivers to find alternatives to hundred-mile commutes. And a national carbon policy, if it’s to have a real impact, will almost certainly need to bring American fuel prices back to at least where they were at their peak in the summer of 2008. Electric cars are not the panacea they are sometimes claimed to be, not only because the electricity they run on has to be generated somewhere but also because making driving less expensive does nothing to discourage people from sprawling across the face of the planet, promoting forms of development that are inherently and catastrophically wasteful.

One beneficial consequence of the ongoing global economic crisis is that it has put a little time back on the carbon clock. Because the climate damage done by greenhouse gases is cumulative, the emissions decrease attributable to the recession has given the world a bit more room to devise a plan that might actually work. The prospects for a meaningful worldwide climate agreement probably improved last November, with the election of Barack Obama, but his commitments to economic recovery and carbon reduction—to bringing the country out of recession while also reducing U.S. greenhouse emissions to seventeen per cent of their 2005 level by 2050—don’t pull in the same direction. Creating “green jobs,” a key component of the agenda, is different from creating new jobs, since green jobs, if they’re truly green, displace non-green jobs—wind-turbine mechanics instead of oil-rig roughnecks—probably a zero-sum game, as far as employment is concerned. The ultimate success or failure of Obama’s program, and of the measures that will be introduced in Copenhagen this year, will depend on our willingness, once the global economy is no longer teetering, to accept policies that will seem to be nudging us back toward the abyss.