12/10/2006

Kyoto

I would like to bring up a discussion about the Kyoto Protocol. The Kyoto Protocol is, as you all know, a treaty to combat global warming from greenhouse gases. The main issues behind this protocol is whether or not the U.S. should be more involved with it. Because of the economics of the protocol it has advantages and disadvantages to actively participating.

One disadvantage I see from joining the Kyoto project would be the increase in costs companies would have to bear. These costs would be passed onto the consumer and could be harmful to the economy.

Benefits from joining would be a decrease in greenhouse emissions because companies would strive to be more efficient in order to reduce costs.

I think greenhouse gas emission is a problem and it should be addressed, but at the same time I would be hesitant joining the Kyoto project because it could have implications on the balance of our economy.

4 comments:

puracara said...

I am not a tree hugger, but something does need to happen. The only way the business will change there ways is regulation. The US contributes more then its fair share to this problem and should help fight against it. We are going to have to either pay the increased prices to the businesses or pay it in increased taxes.

Dr. Tufte said...

Sorry guys ... I think you've bought into a line of nonsense. In no particular order, here's why.

Yes, there are advantages and disadvantages to signing on to Kyoto. However, the advantages seem to be far outweighed by the disadvantages. This has been studied by Bjorn Lomborg's group, who found global warming to be way, way down the list of problems worth addressing.

There are also numerous aspects on which Kyoto does not count positive efforts because they are made by the U.S. We are being picked on, and should be cognizant of this fact and the motivations driving it.

An unanswered question is why we should sacrifice now to help out people who are far richer than we will every be. We have every reason to believe that future generations will be richer than us. Why should we tax ourselves to make them better off? If redistribution from the rich to the poor makes sense in any context, then we need to recognize that increasing our well-being today by decreasing the natural wealth of those in the future is simply not the problem we think it is. This suggests that those who support the general idea of social programs should be against addressing global warming through something like Kyoto; the fact that they aren't speaks volumes about the sensibilities underlying their support.

I worry when anyone says "something does need to happen". I'm not picking on you specifically, but that viewpoint can lead to problems for busybodies and people with control issues (and those sorts seem to congregate in regulatory agencies).

I also object to the idea that "the only way ... business will change ... is regulation". Every market in which there are tradeable pollution rights shows this viewpoint to be wrong.

There is also the claim that "the US contributes more than its fair share". There are two issues here.

First, "fair" is a loaded word. Who decides that? Yes, people cheat, but you almost never here a winner talking about how unfair things are unless they feel guilty for winning. Unfairness is a squishy concept, that in practice is used to extract concessions from people who are doing better than others. That's a real problem if they are doing better for good reasons.

Second, what exactly is the "fair share" of the U.S.? Bear with me for a minute. Who exactly do we want doing production - those that pollute more or those that pollute less? That question doesn't have a reasonable answer unless you specify whether that is total pollution or pollution per unit of (desirable) output. Most people would say, when pressed, that the latter is more reasonable. If that is the case, then we need to unfetter the U.S. from stuff like Kyoto as much as possible - because we have the most beneficial ratio of (good) outputs to (bad) pollution. Ah, but there's the rub: almost no one makes that point because what they are really concerned with is just reining in U.S. production. This is just a way to make the poor feel relatively better by making the rich relatively worse off. It actually could increase pollution by quite a bit if efficient U.S. production ends up being replaced by less efficient production in other places.

Lastly, there is a lot of confusion surrounding these issues. Yes, the planet is warming. However, this has happened many time before. Yes, carbon dioxide levels are rising from human sources. Yes, in isolation, carbon dioxide is a greenhouse gas. No, it is not clear that there is a link between increased carbon dioxide in the atmosphere and global warming. Correlation is not causation, and, in any event, the correlation between carbon dioxide and temperature is weak.

econstudent said...

Very good points by Dr. Tufte. To further support those points, I recently found out that China and India rejected the Kyoto Protocol. This is a fairly important issue because China is one of the largest producers of green house gasses.

Dr. Tufte said...

This is largely because they are the countries that stand to benefit the most from emulating the U.S. model over the next several decades.