No, Taking My SUV to the Gym Doesn’t Mean I Deny Climate Science, but It Doesn’t Mean I Shouldn’t Pay For It Either

If you follow politics news, you’ve probably noticed that there’s a lot of discussion regarding whether our elected leaders “believe in” climate change. (I would argue, however, that “acknowledge climate science” is a more appropriate phrasing.) One argument that is commonly made is that climate “believers” are being hypocritical whenever they engage in activities that are not environmentally friendly, or, even worse, that engaging in activities that are bad for the environment indicates that one doesn’t actually believe in climate change. In the latter case particularly, the logic makes even less sense than the logic that leads some people to doubt what scientists know about lung cancer after they see a doctor smoking. On the up side, it perfectly illustrates why private solutions to climate change are generally difficult if not impossible.

To see why, let’s think about a climate-science-believing but selfish (as in self-interested, not a value judgment) individual, such as, say, Bill de Blasio. Earlier this summer, for example, New York City Mayor Bill de Blasio received considerable criticism for frequenting a gym that is located 12 or so miles from Gracie Mansion, in particular because he travels to and from the gym in a chauffeured SUV. If de Blasio gives up his gym, he bears the entire loss in happiness of this choice. The benefit of his choice- namely, the reduction in carbon footprint- if felt by de Blasio himself but also by everyone else in the world. Collectively, these benefits might outweigh de Blasio’s loss in happiness, but that’s not necessarily de Blasio’s concern (and that’s okay, but important for policy). Of course, the criticism is warranted in the sense that the practice is not environmentally friendly, but it’s certainly not an indictment of our leaders’ belief in climate science.

At the very least, this example shows how climate-unfriendly personal choices are consistent with an acknowledgement of legitimate climate science. More importantly, it shows how it’s somewhat risky to simply try to get people to “do the right thing”- even when people have good intentions and proper knowledge, self-interest is likely to take over for most people most of the time. (More traditional economists might go so far as to say “all people all of the time,” but I’m not *that* cynical.)

Does this mean that regulation should prohibit de Blasio from taking his SUV 12 miles to the gym? Not necessarily- if he gets enough happiness from his gym, it’s entirely possible that this outweighs the collective climate harm to everyone else, in which case disallowing the gym visits would lower the overall happiness of society. (Sidenote: I find the idea that someone would like the gym this much personally hilarious.) On the other hand, if he doesn’t like his gym as much as everyone else likes cleaner air, then society would be better off if he chose a closer gym.

This principle presents a problem for regulators- there are a whole lot of things that people do that contribute to climate change, and it’s basically impossible to tell how much value people get from each and every one, even though we can often calculate how much they contribute to climate change. So how do we pick which behaviors to restrict? Many economists argue that the strategic use of taxes can solve this problem.

One objection to the idea of “carbon taxes,” whether on business or individual behavior, is that they place an unfair burden on lower income people, either because lower income people are more likely to change their behavior or because paying a tax is more burdensome when one has less money. This could likely be the case, and researchers could estimate this impact once such a tax is put in place. (It’s comparatively difficult to do so before the tax is enacted because it’s easier to observe behaviors than preferences.) In fact, regulators could even earmark the revenue from the taxes for programs that benefit the people who are more inconvenienced from the taxes.

Intuitively, the idea behind this sort of tax is “you can do your environmentally unfriendly thing, sure, but you have to pay for the pollution you’re imposing on everyone else.” In other words, it changes the incentives that individuals and businesses face such that they choose to “go green” when it is efficient to do so but retain the right to engage in the activities that are really important to them. Is this a perfect system? No, but it’s better than “sure, go ahead and pollute with very little personal consequence” or “we’re the government so we’re going to decide for you what you are and aren’t allowed to do.” Who knows, maybe the tax revenue could even be spent on programs to help combat climate change.

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