November 24, 2006
Tol on Nordhaus on Stern
Posted to Author: Pielke Jr., R. | Climate Change
Whatever you might happen to think about Richard Tol's views, he cannot be criticized for being indirect. The statement below I have elevated from our comments. It is one of seveal gems from Richard in the past few weeks, and provides a cogent summary of why it is that solid policy arguments matter in political discourse -- whether the subject is climate change or WMDs or whatever.
I cannot speak for Nordhaus, but I have known him for many years and carefully read all his papers on climate change.Posted on November 24, 2006 09:31 AM
You say that Richard Tol`s comment (in response to my post on the Nordhaus on Stern thread) is "a cogent summary of why it is that solid policy arguments matter in political discourse -- whether the subject is climate change or WMDs or whatever."
I`m not sure that a realist would draw any such conclusions. What solid policy analysis was made in advance by the Bush administration, either in deciding to invade Iraq - with the meter now at $500 billion and running an additional $150 million daily - or in disavowing Kyoto? Nordahus himself prominently makes these points several times in his comments.
We may all want solid policy arguments, but we should have no illusions that they necessarily will either compel or serve as the foundation for political decisions. Rather we should be aware of the other factors affecting policy, such as short time horizons of politicians, differences in interests between citizens and politicians, opportunities for rent-seeking and, in the case of climate change and other public goods, the prisoners` dilemma issues that bedevil efforts to avoid an international tragedy of the commons.
When the issue is how to best influence policy, a solid policy argument made be an indispensable motivation, but we should not confuse a policy argument with a strategy.
This brings to mind the Lippman observation you quoted earlier: "when the decision is critical and urgent, the public will not be told the whole truth. What can be told to the great public it will not hear in the complicated and qualified concreteness that is needed for a practical decision. When distant and unfamiliar and complex things are communicated to great masses of people, the truth suffers a considerable and often a radical distortion. The complex is made over into the simple, the hypothetical into the dogmatic, and the relative into the absolute."
Posted by: TokyoTom at November 24, 2006 11:15 PM
Thanks for your response.
I`m not sure I see either that Stern has forced Nordhaus to waste any precious time or that the review of Stern`s work is wasted time, and I note that you fail to directly address the question of whether the Stern report may be highly effective in its apparent purpose of influencing the international political discussion.
Nordhaus has written extensively on climate change over the past thirty years, to little avail in the US. No doubt he welcomes the opportunity to comment on the Stern report, while perhaps nursing a small hope that the US might commission a similar effort in response?
And if we do indeed see the Stern report help nudge the US towards meaningful engagement in climate change discussions, might you then concede that "Really, climate policy is in a better place because of Nick Stern?"
As to the public debate, I am not sure that "the message of people like Nordhaus must be very confusing: Stern is wrong but right nonetheless". The Stern report makes a bigger splash than all of the separate comments on it, and is likely to further elicit public support for climate change policies - which policies can then take into account comments from others such as Nordhaus.
Those who have been opposing climate change in the US have to this point relied primarily on rent-seeking and obfuscation to win inaction over the past thirty years, and the Stern report in clearly on balance a blow against them, even as they may point to the criticisms so quickly discussed at this blog and elsewhere. They can see the handwriting on the wall with the stunning defeat of the Republicans in Congress, and no doubt now are looking for other political cover.
Posted by: TokyoTom at November 25, 2006 12:05 AM
Positives and normatives again. Lippman is correct. This is what often happens. That does not mean that it should happen in case of climate policy.
The climate problem will have to be solved by a broad coalition, that spans all substantial countries, span all substantial parties in those countries, and spans 20 electoral cycles and 3 generations.
A stark but faulty argument can win the day, but the other side will be back tomorrow and with an additional grudge. The last thing that climate policy needs is more polarisation.
It is too early to say how the Stern Review will affect UK politics. Labour had been losing ground to the Tories on the environment. With the Stern Review in hand, Gordon Brown has rhetorically positioned himself to the far green side of David Cameron, who can now safely retreat to the brown side of the centre. Given the environmental track record of the Blair government, and Brown's current unwillingness to intensify British climate policy, Cameron can credibly make the argument that Labour is all talk but no action. Recall that the Stern Review calls for the price of carbon to be multiplied by 10 overnight.
For all his nice words, David Cameron is an unlikely champion of climate policy.
One can also construct a scenario in which John Reid will use the Stern Review to uncover the incompetence of HM Treasury in general and Gordon Brown in particular. If Read steals the nomination Brown, the next election will be fought on conservative issues.
In sum, the Stern Review is bad strategy and dubious tactics (besides being lousy economics).
Posted by: Richard Tol at November 25, 2006 02:54 AM
Thanks. On Iraq, you make my point. The lack of thoughtful policy planning is indeed one factor behind the fiasco in Iraq. Bad policy arguments helped sell the war, but they also helped to lose it as well. The misplaced focus on WMDs, "liberations", etc. also galvanized public opinion -- a great strategy, huh?
You ask,"And if we do indeed see the Stern report help nudge the US towards meaningful engagement in climate change discussions, might you then concede that "Really, climate policy is in a better place because of Nick Stern?""
This is yet another version of the ends justifying the means. I don't think that such an approach generally has merit in policy or politics. Richard Tol describes this well in his response to your post. Richard is right, the Stern report is "bad strategy and dubious tactics".
I am all for the US reengaging fully in international dicussions. I also think that calls for such engagement are enhanced with solid policy arguments behind them.
Posted by: Roger Pielke, Jr. at November 25, 2006 06:52 AM
I have a question: (sorry if it falls of topic)
Can someone list the actions taken by countries toward reducing GHG's. I know that Germany is building a lot of wind power. Québec imposed a 250 millions tax to the petroleum industries and want to produce more hydro and wind power for exportation. Many countries also contribute to reducing GHG's by having smaller economic growth.
I frequently here that actions are required I barely ever here anyone propose any action, other than a higher price for energy which is directly aimed at the poor.
Here are some action that I thought of:
1-) Topping the speed limit on cars at 100km/h trough a electronic control device. This would save a lot of people a lot of money in tickets, it should also reduce both the number of accident and there gravity (cost reduction in health care).
2-) interdict parking zone in downtown center of major cities: People would have to take the bus at the exception of those who have a parking space in garage. A benefit of that is that it would unjammed traffic in downtown area letting the delivery truck working faster. If these truck aren't jammed in traffic they reduce their GHG's.
3-) (I'm speaking for Québec here although it could apply somewhere else) We should complete the construction of all unfinished highway and bridge that are designed to create a beltway so truck aren't forced to drive into cities they don't need.
4-) Highly tax cars that don't meet a certain CAFE at the exception of trucks that are used primarily for work. (example someone want to buy a car that doesn't meet the 30mpg, Ideally the tax would be charged at the pump but until a workable system is developed they could pay like a 1000$/year tax (an amount to be determined)every time they renew their license.
5-) The basic need electricity should be free for everyone. With a scaling in its price people who consume a vast amount of it could see a substantial rise on their bill.
6-) Every time someone would renew in driving license they would have a special tax (amount to be determine) for public transportation. The driving license would then become a free pass to use public transportation
I'm sure I could fine other solution. These I'm sure are not at the level to those who really want actions taken. I find the benefit of these actions to be that they don't reduce the quality of life of the poorest while they help the economy by reducing the time of commute.
I don't see any of these action coming into life since the different government would lose too much money in tickets and other.
Posted by: Sylvain at November 25, 2006 07:47 AM
Thank you very much for the additional English context. Since the report obviously has one or more political purposes, an understanding of what those purposes is essential to a meaningful evaluation of the report and its effectiveness.
It sounds as if the report might backfire domestically in the UK. On the international side (and there is one, isn`t there, with Gore being brought in?), I think the judgment call is much more difficult to make, since persuading the US (and others) to move is a multilevel game, targeting a wide range of audiences at home and abroad.
Posted by: TokyoTom at November 25, 2006 09:53 AM
Roger, my point was not whether the ends justifies the means, or even whether such an approach generally has merit in policy or politics. Obviously good planning is crucial to ensuring the long-term effectiveness of policy. My point was simply to observe that, for good or bad, policy is frequently NOT determined on the basis of good policy arguments - such as in the case of Iraq, which clearly served the short-term political and financial interests of a rather select group.
You say "I am all for the US reengaging fully in international dicussions. I also think that calls for such engagement are enhanced with solid policy arguments behind them." Well, there have been solid policy arguments around (such as from Nordhaus) for thirty years, and the mistakes of Nicholas Stern are easily caught and corrected in the policy-making process - once one decides to make policy. That`s the question that concerns me - when will the US finally meaningfully engage, and start building the domestic and international consensus needed for action? If the Stern report helps to light a fire under politicians and other here, then I think we can say that we were not ill-served by it.
Posted by: TokyoTom at November 25, 2006 10:09 AM
Something I think is interesting about the Stern report is that many of the people who normally talk so much about the "consensus" among climate scientists (as a means of denigrating the positions of others) are happy to embrace the Stern report, which is far outside the mainstream "consensus" of climate-change economists (as demonstrated quite clearly by Professors Tol and Nordhaus). Apparently consensus is only important when you agree with it.
Posted by: Mike at November 25, 2006 10:19 AM
"If the Stern report helps to light a fire under politicians and other here, then I think we can say that we were not ill-served by it"
-- And if it has the opposite effect, and lights a fire under those opposing reductions, would you then say that it was ill-served?
We can only guess what effect Stern will have on the balance of the debate. It will provoke many different reactions in many different settings. Since the ends are never know in advance, I'd rather work with more defensible means. In other words, a Stern Review that didn't warrant such critical responses from Tol, Nordhaus and others.
Posted by: Nicholas Schneider at November 25, 2006 01:38 PM
Your last post begins with:
“Roger, my point was not whether the end justifies the means…”
And ends with:
“If the Stern report helps to light a fire under politicians and other here, then I think we can say that we were not ill-served by it.”
…which is the same as saying that the ends justify the means!
What I find even more troubling is the constant ‘call for action’. It disturbs me in the same way as a politician stating that they are “for change”! Such non-specific slogans easily lead to change for the worse, and actions that are counter-productive.
There are strong indications in the science of climate that CO2 is not the primary driver of change. I believe the evidence will eventually vindicate this view. If true, actions focused primarily on the reduction of CO2 will be costly and have almost no effect on climate.
There are other actions that produce a win-win, no matter if CO2 is a primary driver of change or not. These involve increasing our resistance and adaptability to extreme weather, promoting energy efficiency and insuring solid economies that make future actions, if necessary, much easier to handle.
Aside from the Stern report’s obvious flaws in both economic and climate trends, it argues almost exclusively for CO2 emission reductions. If the goal is to reduce the impact of global warming, forced reductions in CO2 emissions may be the most inefficient ‘action’ we can take at this point.
Those who argue that the ends justify the means do so with the full belief that the means will bring about the desired ends. Sadly, history tells us that this almost never happens. If the ‘means’ are not honest and principled, there is little chance that the desired ‘ends’ will be achieved!
(Case in point, Roger’s latest post on the ‘Politicization of Intelligence’.)
Posted by: Jim Clarke at November 26, 2006 07:25 AM
There are any number of things wrong with our fossil fuel habit, things that daily damage and degrade the world we live in, and most of these damages are not charged for in the price of energy. We'd be far, far better off were we to begin now to ratchet up the price of fossil fuels by introducing carbon taxes offset against reductions of the tax burden on things we'd prefer to see more of. Anybody not like to see lower income taxes paid for by higher dirty fuels taxes? It's late enough to start already.
Posted by: winston at November 26, 2006 03:20 PM
I suggest that you read the post by Dr Richard Belzer, I believe it is in the thread of Richard Tol comment of the Stern Review, you will realise that if a carbon tax is ever applied it will add up to other taxes.
Posted by: Sylvain at November 26, 2006 07:31 PM
Sylvain you've never seen a tax rate reduced? It happens. If and when the revenue accruing from a carbon tax were to reach significance as a fraction of a government's overall tax take, other taxes would indeed need to be reduced or that government would face the same voter backlash as it does today.
Posted by: winston at November 26, 2006 08:45 PM
You say that "the ends are never known in advance", but I disagree. Those who commissioned the report clearly had purposes. Richard Tol shed some light on the UK domestic ones; I think it rather clear that there are international purposes to the Stern report as well, in the context of internationl negotiations. (see here: http://economistsview.typepad.com/economistsview/2006/11/the_politics_be.html)
Those who commssioned the report could not have expected that it would be either the final word in the debate or the blueprint for solutions. The question is whether the report furthers the UK's goal of bringing the US, China and India into a binding treaty.
Surely it is fair to criticize the report for its substantive failures, but one should not ignore the question of whether the report still may serve the purposes of those who commissioned and wrote it. Time will tell.
Posted by: TokyoTom at November 26, 2006 10:25 PM
You say "Those who argue that the ends justify the means do so with the full belief that the means will bring about the desired ends. Sadly, history tells us that this almost never happens. If the ‘means’ are not honest and principled, there is little chance that the desired ‘ends’ will be achieved!"
I would say that this seems naive. Doesn't history tell us that perhaps dishonest and unprincipled means are the best way to achieve selfish ends? One must always ask what ends are being achieved (and for whose benefit and at whose cost) when one is reaching conclusions about whether policy goals have been accomplished.
About the most one case say is that one should be on his toes when others use dishonest and unprincipled means, since that may indicate they have a selfish end in mind. And what selfish ends might the UK have in mind? I don't know, but how about getting the US to join the international community, and to bring China and India along? The context of the report are the prisoners' dilemma of the international game, and the rent-seeking occurring within each country.
Of course you are right that the issue is complex and so the international response cannot focus solely on CO2. The report does not undermine the braoder discussion.
Posted by: TokyoTom at November 26, 2006 10:44 PM
You wrote: "Doesn't history tell us that perhaps dishonest and unprincipled means are the best way to achieve selfish ends?"
No! Absolutely not!
About the only endeavor where such tactics generally bring about the desired outcomes is war, where it is absolutely vital to be less than honest with the enemy and where principles can slow down an army more than a Russian winter! (If we fought WWII like we fight in Iraq, we would still be dealing with NAZI insurgents, while we held congressional hearings over someone putting Mein Kampf in a toilet!)
Outside of war, history tells us that the most successful societies are those with considerable individual liberty, tempered by a rule of law, divined from founding principles and overseeing a generally free market. Such societies are only successful as long as the majority of citizens abide by those rules, and punish those that don’t. These facts support my contention that noble ends (like a successful society) are achieved through honest means, even though everyone in that society is working for their own well-being (selfish ends).
More specifically, the 20th century is nothing but the history of the terrible consequences of those who adopted noble goals, but were dishonest about the threats to the goal and the proposed solutions to achieve it. Perhaps George Bush and WMDs is an example that you would relate to. For me, the inappropriate banning of DDT is the most egregious example, resulting in more deaths than Hitler, Stalin, Mao and Pol Pot (four other examples of my point)!
Less bloody examples include the war on poverty and improving education. Both are failing to achieve their desired ends because we refuse to honestly look at the problems, preferring to demonize political opponents instead. Considerable resources have been thrown at both with little success, sometimes even back-sliding, because we do not correctly identify that which prevents the goal from being achieved.
If our goal is to reduce the negative consequences and take advantage of the positive consequences of human induced climate change (the actual goal is almost never stated), then we must be honest about the problem as well as the solution. Exaggerating the threat and misapplying the blame will lead to bad policy that will not achieve the desired ends.
Posted by: Jim Clarke at November 27, 2006 04:07 PM
Thanks for your response. But where did I forget that we are dealing with an unregulated commons?
And I'm aware of the political goals of the report, including Tol's view of the politics. Stern was done with purpose. It may work. But its political efficacy doesn't factor into my acceptance of his analysis.
Stern would fare better in the long-run if it had the acceptance rather than than criticism of Tol, Nordhaus and others. But perhaps stern wasn't looking for their acceptance.
Posted by: Nicholas Schneider at November 27, 2006 06:28 PM
My point was simply to observe that the report must be judged on several different levels; not merely the fairness of its assumptions, but its effectiveness in bringing the US into meaningful participation in global mitigation and adaptation policies.
The issues raised here so far may be on the least important level. As to the global political level, perhaps the report has been mooted by the recent US elections, but I suspect it will still be used as a lever, within the US, by others on the US and by the US on China and India.
Posted by: TokyoTom at November 27, 2006 11:25 PM
"My point was simply to observe that the report must be judged on several different levels"
Assign it a grade on its politics (A-/B+?)
We can differ in opinion on whether it's a net pass or fail.
Posted by: Nicholas Schneider at November 28, 2006 08:13 AM
I was not aware that we had lost the war in Iraq. When did we sign the surrender documents?
You may elect to believe that we have lost, but not everyone agrees with you. I'm still hopeful that some good will come out of the war yet.
Posted by: Bill at November 28, 2006 01:00 PM
Thanks for your comment. I do think that the war, if not lost, is a lost cause. Others may disagree. Like you I too am hopeful that some good may come yet.
Posted by: Roger Pielke, Jr. at November 28, 2006 06:22 PM
Roger, I share your view that our Iraq policy has clearly been a net loss to the country as a whole, and in that I disagree with Bill. My point is that in examining policies such as Iraq, we should focus not merely on the wisdom of the larger policy and the adequacy of planning and intelligence, but also on interests and objectives of those crafting policy - as it is more than naive to assume that those interests and objectives are identical to long-term national interests.
As I noted in my first comment, "We may all want solid policy arguments, but we should have no illusions that they necessarily will either compel or serve as the foundation for political decisions. Rather we should be aware of the other factors affecting policy, such as short time horizons of politicians, differences in interests between citizens and politicians, opportunities for rent-seeking ..."
The invasion and occupation of Iraq have cost us over $500 billion so far, and the meter is running at the rate of $150 million to day. Whatever one's calculation of benefits to the US, clearly the costs far outweigh the benefits (and analysts such as Nordhaus pointed out in advance that this was likely to be the case - http://nordhaus.econ.yale.edu/AAAS_War_Iraq_2.pdf).
But we should not forget that war advocates may have had private or partisan reasons behind their publicly stated ones. To mention a few: The money being spent on the war is not being dumped in a pile and burned (though it may as well, for the good it is doing us), but being spent on defense contracts with firms in which many of America's elite have significant financial stakes. US oil and gas firms expected significant benefits from the privatization of the Iraq oil industry; even as civil war has prevented these benefits, the tremendous rise in world energy prices resulting from the war turbulence has vastly increased the profits of the oil firms. Thus, there has been no short-term downside to them from the war. Also, it is clear that Republicans perceived the war as a partisan strategy, and used it as such in the 2004 and 2006 elections. In addition, the Executive branch certainly also used the war on terror as a tool to wrest greater power and freedom of action from the Congress. Finally, given that politicians and administrative officials have relatively short-term time horizons, it should not be surprising that they may hastily commit the US to policies that may be long-term disasters - after all, do any of them personally bear the costs of the war?
We should also examine other so-called policy failures in this light. Better information does not lead inexorably to better decision-making; only a better decsion-making process does. That means better checks and balances.
Posted by: TokyoTom at November 28, 2006 08:11 PM
"Like you I too am hopeful that some good may come yet."
Absent the war, there isn't much doubt in my mind that Saddam Hussein and his sons would have been in control of Iraq for at least 2-3 more decades.
So I'd say some good has already come. Though I'll admit at this particular time (3.5 years later) conditions are probably worse than they would have been with Saddam and his sons in power.
Posted by: Mark Bahner at November 28, 2006 10:02 PM
Bill, Roger and Mark, your comments make me think of the Black Knight in the Monty Python movie "The Holy Grail".
Posted by: Anders Valland at November 30, 2006 02:04 AM