Stromberg thinks that if people can agree on the natural science relationships, then his desire for a carbon tax pops out automatically. Yet that doesn’t follow at all; he is ignoring the
economic issues, even though he cites “Economics 101” in his breezy conclusion. To show what I mean, let’s assume for the sake of argument that the three propositions about climate change that Stromberg discusses are 100% true. It
still does not follow that the U.S. government should impose a carbon tax.
If Humans Contribute to Climate Change, Doesn’t Mean U.S. Government Should Tax Carbon
In a
recent post, I walked through the flaws in the standard argument for a carbon tax. For our purposes here, let me focus on some of the biggest problems.
First, Stromberg never established that climate change—even if “significantly” caused by humans—was bad. He just
assumed that as a given. He might be surprised to learn that even one of the leading computer models—and one of the three
used in the Obama Administration’s Working Group to estimate the “social cost of carbon”—actually shows global warming conferring net
benefits on humanity at least through the year 2050.
Now don’t misunderstand, Richard Tol (the developer of the FUND model which shows net benefits for moderate warming) supports a carbon tax. But that’s because he thinks the benefits of warming are already baked into the cake, and he’s concerned about what will happen decades from now. So would Stromberg—since he is so committed to empiricism and science—want the senators to vote on how many more
decades of benefits from global warming humanity will receive, according to one of the models chosen by the Obama Administration? I bet a lot of Republicans would line up for that one, so Stromberg should be glad to see their commitment to truth.
Another major problem with Stromberg’s whole argument is that even if you concede humans are significantly causing global warming, and even if you think it’s a problem, you
still have to show that the harm
from taxing carbon dioxide emissions is less than the net harms from global warming. It’s possible, for example, that even a $1/ton tax on carbon dioxide would cause more economic harm—especially to poor people in Africa who currently do not enjoy plentiful energy—than it would spare in climate change damages. I hope the reader is seeing just how empty Stromberg’s case was, when he leaped from “humans significantly contribute to climate change” and landed immediately on “therefore Republicans should support a carbon tax.”
Also on this point, notice that even if you thought it would be worth restricting carbon dioxide emissions and crippling economic growth,
if that were the only option, it still wouldn’t mean it was the
best way to deal with the potential threat. That was
one of Princeton physicist Freeman Dyson’s points, and why he is now labeled as a “skeptic” and considered a pariah in some circles even though he used to be a cool “eccentric” scientist with
amazing ideas. (My brief and cynical summary of the treatment of Dyson: Dyson’s brilliant imagination of the potential of humanity was great
until he started thinking of cheap ways our kids could deal with the possible dangers of climate change. After his musings wandered on to
that topic, fashionable people threw him under the bus.)
There are all sorts of ways humans several decades from now could address possible dangers from a changing climate—I discuss some of them
in this article. Stromberg simply assumes that humanity must forfeit literally many trillions of dollars of potential economic output over the coming decades by artificially restricting carbon usage, rather than thinking about other possible solutions. Maybe Stromberg’s right and his policy is the only way to do it, but he doesn’t even seem to
notice this is a crucial part of the argument. When his suggested solution will cost humanity trillions of dollars, he at least should do us the courtesy of spelling it out.
When you start actually comparing the costs and the benefits—which any rational policymaker would do, so Stromberg should applaud my thought process here—you realize it’s not as simple as, “Climate change bad, tax carbon good.” It starts mattering how
big the tax is, and what jurisdictions are implementing it. For example,
I recently documented how James Hansen—mentor to Al Gore and obvious hero among climate change alarmists—referred to the California state government’s carbon restrictions as “half-assed and half-baked,” because they were empty gestures in light of emissions from China and India.
Conclusion
At a
“tax interaction effect,” which shows that the Economics 101 case—the one Stromberg loves—falls apart once we take into account the prior existence of distortionary taxes on capital and labor. In short, Stromberg should learn some economics above freshman level before he starts lecturing us all again on carbon taxes.
