New York Times Friday, February 15, 2002
Ersatz Climate Policy
By PAUL KRUGMAN
A lert shoppers know that an extra word in a product's description can
make a big difference, and rarely for the better. Apologies to
connoisseurs of Velveeta, but most of us don't regard "cheese food" as
a good substitute for plain ordinary cheese.
To the unwary, yesterday's pledge by the Bush administration to reduce
"greenhouse gas intensity" by 18 percent may have sounded like a
pledge to reduce greenhouse gases, the emissions (mainly carbon
dioxide, released by burning fossil fuels) that cause global warming.
In fact, that's the way it was reported in some news articles. But the
extra word makes all the difference. In fact, the administration
proposed to achieve almost nothing; consistent with that goal, it also
announced specific policies that are trivial in scope and will have
virtually no effect.
What is this thing called greenhouse gas intensity? It is the volume
of greenhouse gas emissions divided by gross domestic product. The
administration says that it will reduce this ratio by 18 percent over
the next decade. But since most forecasts call for G.D.P. to expand 30
percent or more over the same period, this is actually a proposal to
allow a substantial increase in emissions.
Still, doesn't holding the growth of emissions to less than the growth
of the economy show at least some effort to face up to climate change?
No, because that would happen anyway. In fact, the administration's
target for reduction in greenhouse gas intensity might well be
achieved without any policy actions which is good news, because the
administration hasn't really proposed any.
The reasons greenhouse gas intensity tends to fall over time are
complex, but the basic logic is simple: We are gradually becoming a
post-industrial society, in which knowledge and service industries
grow faster than the old smokestack sector. Because pushing bits
around doesn't take as much energy as pushing around large pieces of
sheet metal, a dollar of new-economy G.D.P. generally doesn't require
burning as much carbon as a dollar of old-economy G.D.P.
But the old economy is still there, and the new economy still uses
significant amounts of energy especially if office workers drive
S.U.V.'s long distances on their way from house to mouse and back. So
as the economy grows, greenhouse gas intensity may fall, but
greenhouse gas emissions which are what damages the planet continue to
rise.
So what does the Bush administration propose to do? Nothing much.
The main actual policy described yesterday was an array of tax credits
for planet-friendly activities, such as installing solar power or
capturing methane from landfill. It's not worth trying to analyze the
specifics of this proposal, such as why tax credits should be the tool
of choice. (Oh, I forgot tax cuts are the answer to all problems.) The
key point is that it's just too small to do the job. It offers $4.6
billion over the next five years. That's less than a penny a day per
American. Do you really think that's enough to produce a major change
in the way we use energy, or that it is an appropriate level of
response to a major threat to the planet?
And that's the substantive part of the proposal. The other part is
creation of a "registry": companies can, if they choose, report their
emissions of greenhouse gases. If they show reductions in emissions,
they will receive well, nothing. But future administrations might be
pleased.
The real question is why an administration that clearly doesn't want
to do anything about climate change feels obliged to put on this show.
The answer, of course, is that on environmental issues the
administration is clearly out of step with the public. Its
indifference to the fate of the planet would be quite unpopular if it
were generally appreciated.
To deal with this potential political threat, the Bush administration
exaggerates the economic costs of environmental regulations. Last
spring Dick Cheney implied, disingenuously, that environmental rules
had caused a shortage of refining capacity; now George W. Bush tells
us, implausibly, that the Kyoto Protocol will destroy millions of
jobs.
Meanwhile the administration offers the illusion of environmentalism,
by announcing policies that sound impressive but are nearly
content-free.
So buyers beware. What the administration offered yesterday was
processed climate-change policy food, bearing very little resemblance
to the real thing.
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