Self-interest, prosocial ends, and monetizing carbon removal

Here’s a picture of a fish market in the public domain just because it’ll make a good mercantile thumbnail.

1. Self-interest

If you listen to Nori’s Reversing Climate Change podcast, you’ve heard me say some variant of “one should design systems so that people acting in their own self-interest leads to prosocial outcomes.” It’s gotten so frequent that sometimes I’ll sigh before I say it, feeling quite accurately like a broken record.

As much as I’d like to take credit for this idea, I must attribute it to a few thinkers,¹ especially 18th century Scottish moral philosopher Adam Smith:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.²

Smith chooses well in this example, as trusting in self-interest works really well for the provision of food.³ If I want brunch on a Saturday morning in Seattle, I won’t have to wander far to find someone ready to cut that deal with me. Do these brunch offerers care about me deeply? Are they feeding me tasty morning treats out of civic duty? A sense of volunteerism? Does it derive from their benevolence? Almost definitely not. They care that I’m satisfied with the meal and will come back for more brunch so I’ll give them more money. The system works without them having to care about me except as a means to their own end.

Of course there are cases where self-interest doesn’t lead to as tidy a solution as brunch provision, for which I can refer you to the rich field of behavioral economics. And in the context of climate change, you might have objected to a discussion of brunch as there surely must be something qualitatively different between brunch and the climate: self-interest in the former gave us pork belly kimchi waffles, and climate change in the latter. Something is missing here to understand this dynamic…

The idea of trusting self-interest to provide for humanity, along with Smith’s famous comments regarding the invisible hand, have led some people to view the praise of self-interest as the principal feature of Smith’s philosophy. However, there is another side to Adam Smith beyond self-interest, and many people whom he has influenced have taken issue with his representation as a sort of proto Ayn Rand.⁴

2. Prosocial ends

Given that there are applications of self-interest which we could agree are detestable, or at the very least, economically suboptimal, it’s good that self-interest was not the sum of Smith’s thought.

To understand Adam Smith you must pair The Wealth of Nations’ appeal to self-interest with another of his works, The Theory of Moral Sentiments. Its most famous line is:

Man naturally desires, not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love…⁵

… that is, one desires not merely to be loved, but to actually deserve that love.

The goal of preventing ecological catastrophe that environmentalists have shouldered is praiseworthy. It is the natural and proper object of love as Smith might say.⁶ The challenge is that the lifestyle changes environmentalists advocate such as reducing one’s consumption of consumer goods, energy, etc. don’t have a significant impact against climate change unless some majority of humanity does it. If the critical mass isn’t reached then the people who gave up consuming lose out. If the planet is going to hell anyways, why not go down partying in a Humvee limo?⁷ Why be one of the suckers riding the bus into the apocalypse?

When we think about environmentalism, we mostly think about it in a language divorced from self-interest. “The environment should be valued for its own sake. People shouldn’t need economic incentives to care about the planet.” People fight about this question and have for a long time.⁸ The people who care about the environment are already pretty much doing what they can. Simply put, I don’t think we can afford to wait for a spiritual revolution of the planet to worship Gaia.⁹ This attitude can also lead to finger-wagging at environmental infidels, which has a tendency to backfire and make the recipient less likely to care about a given issue.¹⁰

3. Monetizing ecosystem services unifies self-interest and prosocial ends

To scale to the magnitude of literally solving climate change, we need people making money for helping the Earth — we need to monetize the ecosystem service of carbon removal. This is because there is too much carbon dioxide in the atmosphere and the only way to ultimately reverse climate change is to remove the excess amount of greenhouse gases. Part of the reason why humans have solved the brunch problem but not the climate problem is that it is easy to make money on the one but not the other. We need to appeal to those who are not motivated merely by the prosocial outcome through their direct self-interest to begin removing carbon dioxide and storing it permanently in soils, minerals, products, buildings, etc. This is the goal of Nori’s carbon removal marketplace in our quest to help reverse climate change.

When Nori launches, we won’t have to rely merely on the benevolence of the carbon remover, noble though those folks may be. For those for whom reversing climate change is not an altruistic pursuit but a new gold rush, we’d like them to do very well pulling carbon dioxide out of the atmosphere and storing it. Ultimately, I believe profitable carbon removal businesses are the only way we could feasibly be making the environmental progress we so urgently require. I believe an entrepreneur like this would earn the respect of Adam Smith, his fellow humans, and himself, while appeasing his own avarice, and that’s the best outcome I can imagine.

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1. Bernard Mandeville, Fable of the Bees: or, Private Vices, Public Benefits (with which Smith argues), and Frederic Bastiat regarding how Paris gets fed.
2. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book 1, Chapter 2.
3. Excluding cases of poverty where people are not able to trade enough value for food as it’d take us far afield from my purposes here.
4. If you’d like to avoid wading through the source material, Russ Roberts’ How Adam Smith Can Change Your Life is a gentle and delightful read.
5. Adam Smith, The Theory of Moral Sentiments.
6. The problem here isn’t an absence of self-interest. After all, avoiding mass extinctions or resource wars or a climate refugee disaster is generally in everyone’s interest.
7. This is called a Nash equilibrium in game theory. It is a situation in which if we all moved together, the problem would be solved. But if only some of us move unilaterally, it doesn’t work and the movers lose out, so it is individually rational for all of us to stay put even though collectively this is irrational. I highly recommend Eliezer Yudkowsky’s Inadequate Equilibria: Where and How Civilizations Get Stuck for how this applies at the institutional level.
8. Michael Sandel’s What Money Can’t Buy: The Moral Limits of Markets covers the semiotics (graduate student lingo for “the meaning”) behind pricing things held sacred. Jason Brennan and Peter Jaworski’s response, Markets without Limits: Moral Virtues and Commercial Interests, is an excellent rejoinder.
9. A Waiting for Gaia take on Waiting for Godot would be outstanding. I’m half-tempted to pen it.
10. Jonathan Haidt, The Righteous Mind: Why Good People are Divided by Politics and Religion.