The case for a carbon tax

After the 10:10 campaign accidentally hit the self-destruct button just a week before their big day, it is useful to remind people that greenhouse gas emission reduction is still a worthy goal, beyond collecting taxes.

This will soon appear in La Stampa:

Florence is said to have the best climate in the world. Surely, tourists from around the world flock to the northern shores of the Mediterranean, as do growing numbers of pensioners. That will change in the future as more northerly destinations will become more attractive and northern Italy may get too hot for the average Brit and German.

The impact on the Italian tourism industry is but one of the many effects of climate change. Some of these impacts are positive. Less energy will be needed to heat homes in winter. Crops will grow better as there is more carbon dioxide in the atmosphere. However, for most people, the impacts of climate change are, on balance, negative. This is surely the case in the longer term.

People often portray climate change as the greatest problem of the 21st century. Twenty years of economic research pooh-poohs the idea that there is an impending catastrophe. Poverty and air pollution kill more people per year that climate change will in a century. But that does not take away that climate change is a real problem that does real damage.

Climate change primarily affects poor people in faraway places. Poor people often live in hot places. They are more exposed to the weather. They cannot afford to protect themselves against the vagaries of the weather. This means that climate policy is not for our benefit, nor for the benefit of our children and grandchildren. Climate policy is primarily for the benefit of the children and grandchildren of people in distant countries. We have a moral obligation, however, to avoid harming others or to compensate them if we do.

We should also wonder what is in the best interest of future generations. Greenhouse gas emission reduction would slow the spread of malaria. A malaria vaccine would eradicate the disease. Climate change may cut food production in Africa by one-third. If African farmers would use the latest farming methods, food production would increase ten-fold. Climate policy should therefore not come at the expense of development policy. But it does: A growing share of development aid is spent on climate change. This should stop.

Some of the impacts of climate change are really impacts of poverty in disguise. If we leave these aside, there is still plenty to worry about climate change, including its impact on ice sheets. And there are many things that we do not know or understand. The effect on biodiversity is one such area. We know climate change will have widespread negative effects, but we do know how bad it will be. We know that the negative impacts of a gradual warming in the 21st century would be modest, but there has been no serious study of the impacts of more rapid warming or of the impacts in the very long term. If emissions continue unabated, climate change after 2100 could well be much more dramatic than anything foreseen for this century. Nor do we know much about the indirect effects of climate change. Tropical countries tend to grow slower than economies in the temperate zone. If climate is a contributing factor to the inability to develop, as some scholars suspect, then the impacts of climate change are much larger than current estimates suggest. But we simply do not know.

Everything about climate change is uncertain. Uncertainty is no reason not to act. In fact, it is the other way around. What we do know, suggests that climate change is a real problem. There is a small chance that current concerns are overblown. There is no reason to believe that climate change will make us all rich. But there is also a small chance that climate change will wreck the livelihood of many people. A relatively modest investment in greenhouse gas emission reduction would take away the worst risks. If the climate optimists are right, we would have made energy a bit more expensive for no reason. If the climate pessimists are right, we would have avoided a catastrophe. A rational person would err on the side of the pessimists.

There is another way of looking at the same problem. If we burn all fossil fuels that are still in the ground, Earth could get very hot. We cannot let the planet get warmer and warmer and warmer still. That must get us into real trouble sooner or later There is only one way to stop the carbon dioxide concentration in the atmosphere, and hence the temperature, from rising: Emissions have to go to zero. That is a daunting task. We will need a century to do this. You will not make it to the end of the journey if you do not start. We may decide to start slowly and cautiously, but a small start is better than no start at all.

Similarly, solving the problem of climate change will require the cooperation of all substantial countries on the planet. It is easy to wait for others to move, but that guarantees failure. A responsible country reduces its emissions, regardless of what others are doing. Perhaps one should not step too far ahead of one’s main trading partners, but lagging behind creates more long-term problems than short-term gains.

[Final paragraph removed, as it is about Italy’s lacking climate policy]