Best way to reduce global warming is ...

 

Government Externalities and the Friedman Criterion

"Our principles offer no hard and fast line how far it is appropriate to use government to accomplish jointly what is difficult or impossible for us to accomplish separately through strictly voluntary exchange. In any particular case of proposed intervention, we must make up a balance sheet, listing separately the advantages and disadvantages. Our principles tell us what items to put on one side and what items on the other and they give us some basis for attaching importance to the different items. In particular, we shall always want to enter on the liability side of any proposed government intervention, its neighborhood effects in threatening freedom, and give this effect considerable weight."

Pierre Lemieux, Econlib, July 2022

Carbon-Removal Industry Draws Billions to Fight Climate Change

Which is better, to reduce carbon emitted or to remove carbon after emission? (WSJ, June 2022) 

A Wide‐​Ranging Book for Non‐​Economists and Economists

David R. Henderson (Regulation, March 2022) reviews Steven Rhoads, The Economist’s View of the World, revised 2021. The review applauds the chapters on:

1. Opportunity Cost
2. Marginalism
3. Incentives
4. Government vs. Free Markets and
5. Safety Information.

Americans Should Pay More for Gas, Not Less

America’s fuel-economy rules are inefficient (WSJ, Jan. 2022). Here are two money quotes.

"Economists point out that the size-based feature gives car companies an incentive to manufacture and sell bigger vehicles: to make fuel economy standards easier to meet. There is no clear mechanism in the rule that works to limit the number of gas guzzlers an auto maker sells. There also are several loopholes, such as credit given for technologies that don’t directly improve fuel economy."

"Taxing carbon emissions or gasoline directly, as Europe does, would be far more cost-efficient. An analysis by Prof. Mark Jacobsen at the University of California, San Diego, showed that the cost per gallon saved through the fuel-economy standard is three to six times higher than a gasoline tax. But raising federal gasoline taxes, which have stayed at an inflation-unadjusted 18.4 cents a gallon since 1993, would be political suicide. Carbon taxes are deeply unpopular, too."

Reducing risks has costs

What Williams says about safety applies to pollution (Cafe Hayek, Dec. 2021).

Trends in CO2 emissions

 

Note that a good chunk of the decrease in 2020 is a result of the decrease in driving because of lockdowns declared to slow the spread of COVID-19.

Note that the scale on the horizontal axis changes at 0.

Both charts taken from Carpe Diem

Better than sequestration?

How to sequester carbon cheaply: buy a coal mine! (Marginal Revoultion, Oct. 2021).

Maybe the best way to reduce global warming is for people to contribute to funds that purchase coal, oil, and gas fields. The government could compel contributions by increasing taxes and using the additional revenue to make the purchases. The government could encourage the contributions by making them tax deductions or credits.

Mask mandate v voluntary exchange

Professors at UT-Austin may pay students to where masks (Aug 2021). It illustrates two different ways to get people to wear masks.

1. A mask mandate. Here, the university acts as the ruler and coerces people to wear masks. VCU, where I teach, requires masks in all indoor settings and encourages them outdoors when social distancing is not possible.
2. A market for wearing masks. Here, someone pays people to wear masks. Adjustments in the price could increase or decrease compliance. An important question, of course, is, "Who pays the price?" Professors at UT-Austin think that the university should.

Coase discussed the notion that someone should pay someone else to reduce a negative externality when he developed what is now called the Coase Theorem.

China to Launch the World’s Largest Emissions-Trading Program

"The program will initially involve 2,225 companies in the power sector. Those companies are responsible for a seventh of global carbon emissions from fossil-fuel combustion, according to calculations by the International Energy Agency.

Under the trading program, emitters such as power plants and factories are given a fixed amount of carbon they are allowed to release a year. They can in turn buy or sell those allowances. That pushes emitters to think of controlling and reducing emissions in terms of a market." (WSJ, July 2021)

"It isn’t known how much an allowance, equivalent to 1 metric ton of carbon emissions, will trade for. Based on regional pilot projects in the previous two years, the average price on the national market is expected to be the equivalent of $6.18 to $7.73, Zhao Yingmin, China’s deputy environment minister, said Wednesday.

The starting price is much lower than the roughly $59 to $70 a metric ton in Europe’s emissions trading program and the $55 to $69 a ton in the U.K.’s system. It would put China’s carbon-emissions prices in line with those of a similar program in the U.S."

Greenhouse emissions in the USA

 What the EPA says happened in 2019.

Two perspectives on climate change

Click here (Stossel, Dec. 2020).

The best herd immunity money can buy

Jason Riley promotes the idea of paying people to take the COVID vaccine (WSJ, Dec. 2020). Paying people to take a vaccine that protects bystanders is a way to internalize the external benefit.

What is the best way to reduce carbon emissions?

CA has outlawed gasoline powered cars and truck effective 2025 (WSJ, Sept. 2020). The purported goal is to reduce carbon emissions. Five questions come to mind.

1. What is the best way to reduce carbon emissions?
1. Banning gasoline powered cars and trucks.
2. Subsidizing green vehicles.
3. Imposing a carbon tax. The revenues could flow to the general budget, be earmarked for green initiatives, or be refunded to taxpayers on a per capita basis as a carbon dividend. 
2. Which of the three options would have a bigger impact on carbon emissions?
3. How much will banning gasoline powered cars and trucks in CA, or even in the USA, affect climate change?
4. Who loses if drivers pay a tax sufficient to compensate people for the externality they create when they burn gasoline?
5. Who loses if a law forbids drivers from purchasing a gasoline-powered car and the drivers are willing to pay a tax sufficient to compensate people for the externality they create when they burn gasoline?

‘Sustainable’ Investing Is a Self-Defeating Strategy

"The most effective way to reduce an economy’s carbon intensity is to change the economic incentive to pollute" (WSJ,Sept 2020).

Alan Blinder discusses masks, public health, and externalities

Voluntary exchange produces too few people wearing masks because masks create a positive externality (WSJ, Aug 2020).

Pollution reduces human capital.

MRUniversity produced this great video on the costs of pollution and how economists measure them. Did you know that people make more mistakes playing chess when pollution is high than when it is low?

Climate XChange wants to put a price on carbon

https://climate-xchange.org/

Could geoengineering reverse climate change?

An engineer at Harvard says we could start to reverse climate change in 15 years at a cost of about $2 billion per year. Holman Jenkins of the WSJ (Feb. 2020) says the Jeff Bezos should consider funding the project.

Questions: Can government bureaucrats anticipate all the possible innovations that may help fight climate change? If not, how can they figure out the best way to combat climate change?

Two ways to reduce the impact of humans on climate change

Removing carbon dioxide from the atmosphere is a substitute for reducing emissions at the source (WSJ, Feb. 2020). What would more often result in the efficient choices between the two options, a pollution tax or government officials deciding the "best" way to reduce CO2 in the atmosphere?

People are studying at least three ways of reducing the amount of  CO2 released during the production of concrete (WSJ, Feb. 2020). What would more often result in the efficient choices between the three options, a pollution tax or government officials deciding the "best" way to reduce CO2 in the atmosphere?