Krugman: Ersatz Climate Policy

Michael Pollak mpollak at panix.com
Thu Feb 14 22:54:09 PST 2002


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.

Copyright 2002 The New York Times Company | Privacy Information

[pixel.gif]



More information about the lbo-talk mailing list