If we now taxed fossil fuels out of use and later discovered that the climate change hypothesis was an error or a hoax, would we be angry at ourselves for quitting fossil fuels “too soon”? Even if we rejected anthropogenic climate change, there is only one standing argument for continuing the depletion of irreplaceable resources – and it is a fixable economic glitch.
A majority of environmental scientists now agree that human actions, most notably our greenhouse gas emissions, are having significant impacts on the climate. Governments and activist groups are looking for ways to cut annual emissions as fast as possible. However, this is not enough. When it comes to CO2, annual emissions are irrelevant, as CO2 does not “decay” out of the atmosphere. E.g. professor Myles Allen and his colleagues make a strong case that long-term cumulative emissions are what matter. This means that the focus should be on getting rid of the use of fossil fuels completely as quickly as possible.
Ironically, some hail shale gas as a “solution”, as it can “halve annual emissions” with the same energy output. But, understanding the nature of the problem, one can see how this only makes the situation worse, as these relatively affordable sources of fossil fuels are likely to extend the fossil fuel paradigm and increase the total cumulative amount of them that we are going use.
The obvious and most efficient solution would be to tax fossil fuels decisively and credibly out of use by implementing predictably rising carbon taxes. This would halt new investments in accessing fossil fuel reserves and expanding fossil fuel infrastructure immediately, while kick-starting massive private investments into renewable energy technologies and capacity, as the future demand for them would be guaranteed (while minimizing the need to write off already accessed fossil reserves as losses).
Nevertheless, some (“climate denialists”) are not convinced of the threat and still insist that the whole climate change theory is a big conspiracy. And some who agree that there might be an anthropogenic impact insist that ending the fossil fuel paradigm is not worth it. E.g. Bjørn Lomborg’s Copenhagen Consensus keeps on reminding us of other social and environmental concerns where bigger (immediate) impacts could be achieved with smaller “costs”.
Climate policy has become almost as religious (“convictioned”) and polarized an issue as economics or religion itself. Presenting new scientific evidence in many cases only has a backfire effect, causing stronger rejection of the whole idea. It may not be a coincidence that, especially in the U.S., climate change skepticism seems to correlate with conservative values.
The first question to ask is: “If we now taxed fossil fuels out of use and later discovered that the climate change hypothesis was an error or a hoax, would we be angry at ourselves for quitting oil too early?”
The second question to ask is: “Do you really want to live on the expense of future generations, use up our natural resource savings and deprive our children of them, just because we are too lazy to shift to alternatives now instead of later?”
As studies by Jonathan Haidt and his colleagues show, conservatives tend to embrace the Protestant work ethic: Their conception of fairness is one of proportionality – people deserve what they have earned through their own work – and frugality in general is revered. Republicans repeatedly argue e.g. against government budget deficits using the rhetoric of “living on the expense of future generations”. To them, debt is a kind of sin we should all try to get rid of.
The ironic thing about this is that government debt is what facilitates private sector monetary saving. Our current monetary system is just a system for keeping track of how much people owe each other: The money on your account and cash in your pocket merely represents credit, other people’s debt to you. And all debt is to someone else. If the government needs to fall into debt (i.e. stimulate the economy fiscally) to prevent unemployment and deflationary collapse (and the current account balance is not terribly negative), then that is only because the private sector is saving too much. Work cannot be stored, mankind cannot grow richer by saving money and we cannot live on the “expense of future generations” in monetary terms. To get rid of public debt, we’d need to deplete private monetary savings by making people spend or invest them (which would be a good idea, in terms of economic stability). But we won’t go further into this here (see: the banking 101 video).
Instead, we can live on the expense of future generations by exhausting or deteriorating natural resources – imposing “environmental debt” on them. Of course, with fossil fuels, the biggest debt is forcing them to adapt to an unpredictably changing climate. Actually, the biggest reason why we can’t afford to risk climate change is precisely its uncertainty, which makes adaptation very difficult.
But even if we assumed that climate change is a hoax or that humans cannot affect it notably, fossil fuels do not renew at the rate we are using them. We are still, essentially, using up a limited resource – one for which we might find even more valuable uses in the future. Affordably accessible fossil fuels will run out one day – even if it were in 200 years’ time (with “peak oil” being pushed forward by new technologies and reserve discoveries). Eventually, we will have to find alternative, more sustainable energy sources, in any case.
So why not do it now and retain the option value of being able to use the fossil fuels for something else? With the exponential development of technology, who knows what surprising and irreplaceable uses we might find for these fossil fuels in the future? This is even more likely to be true for the biodiversity that accessing these reserves often destroys or puts under risk. For tomorrow’s biotechnology, including the development of new pharmaceuticals and other medical treatments, irreplaceable habitats and life forms are a priceless kind of capital.
Although climate denialists can be accused of religious fervor, it is dangerous to miss the log in one’s own eye: Calling anthropogenic climate change an undisputable fact is approaching the “Dawkinsian” kind of unscientific fundamentalism. Of course it is possible e.g. that some yet undiscovered natural feedback dynamic will kick in and cool the climate back down (although the opposite is more likely with methane being released from thawing permafrost). But what would we lose if we got rid of the use of fossil fuels “too early” or “unnecessarily”?
Cheap energy is one factor that keeps people spending on new things, and, even more importantly, the oil industry is a source of high-paying jobs for any nation, as oil margins are kept high by the limitedness of reserves and the OPEC cartel.
And with the way our economic systems currently work, even a small drop in economic growth rates and the resulting unemployment and economic insecurity risk plunging the whole economy into a deflationary collapse cycle. The only standing argument for sustaining the fossil fuel paradigm any longer is this growth dependence – “the urgent need to create jobs”.
And this is what the Root Bug hypothesis solves: If we got supply to meet demand in the labor market on the individual level regardless of aggregate demand, we would have a growth-independent economy that allows just as much growth as people really want – and there would be nothing preventing us from ensuring that all that growth is also environmentally sustainable. Without the dependence, there would be no obstacles to imposing proper prices on environmental externalities, setting sustainable use quotas for renewable resources to be auctioned out and decisively putting an end to the fossil fuel paradigm with constantly rising carbon taxes.
With a growth-independent economy, denying or being skeptical about climate change is not a valid justification for depleting irreplaceable resources and living on the expense of future generations.
Chapter “3.4.1 Global Warming and Dependence on Fossil Fuels” in the book “Fixing the Root Bug” goes into more detail on different solutions to climate change threats. The rest of the book discusses other symptoms of and the simple solution to the growth dependence, which, ironically, also prevents desired growth. And best of all, fixing the Root Bug would be a very competitive strategy and hence a feasible alternative for any first mover.