Posts tagged with: Environmental economics

Coal power plant Datteln 2 Crop1Today at The Federalist I explore “Why Big Oil Wants A Carbon Tax.” Perhaps such advocacy isn’t just made out of a sense of global citizenship and environmental stewardship.

On the surface such advocacy may seem counter-intuitive. Why on earth, other than out of selfless benevolence, would a firm (or group of firms) advocate for higher taxes on their products? But on reflection, it makes some sense, and the reasoning is similar to why an online retailer like Amazon might be in favor of the collection of sales tax at the state level.

As Adam Smith famously put it, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

Companies are often happy to raise prices if it hurts their competition or provides them with a competitive advantage. And in the case of carbon taxes, it’s important to recognize that not all fossil fuels are equally carbon-intensive, just as not all renewable sources are equally sustainable and resilient.

This is one of the economic realities that I wish Pope Francis had recognized more clearly in Laudato Si’, although I may have more to say about this later. For now, David Brooks expresses a similar desire in his column, “Fracking and the Franciscans.”

overpopulation1In 1865, W. Stanley Jevons predicted that with coal reserves of 90 billion tons, England would run out within 100 years. Today, the country has between three trillion and 23 trillion ton, enough to last Britain for centuries.

In 1914, the Bureau of Mines fretted that with a total future production limit of 5.7 billion barrels, the U.S. only had about a ten-year supply of oil. Today, a hundred years later, we’re estimated to have 36 billion barrels left in the ground.

In 1968, Paul Ehrlich predicted that because of an inability to produce enough food, hundreds of millions of people would starve in the 1970s. Instead, the population has doubled—from 3.5 to 7 billion—and the number of famine victims from 1970-2015 combined is less than in the 1960s.

Each time experts predicted a decline in natural resources would be detrimental to population growth. And each time history proved the experts wrong.

Yet despite this history, modern scientists are still more pessimistic about population growth than the general public, according to a pair of 2014 Pew Research Center surveys.

acton-commentary-blogimage“’Sustainability’ has become big business, especially at universities,” says Kishore Jayabalan in this week’s Acton Commentary. “If there ever was an elitist/populist wedge issue, this is it, with Pope Francis and the Holy See on the wrong side of it.”

So what exactly is meant by “sustainability”? The term originates in 1987 with the World Commission on Environment and Development’s report entitled Our Common Future: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Sounds reasonable enough, but the concept is so broad as to be meaningless. The 2002 UN Summit on Sustainable Development, which I attended as a delegate of the Holy See, came ten years after the Rio Earth Summit and sought to balance social, economic and environmental concerns. The concept today seems to be about fighting poverty while tackling climate change (as in a “new climate economy”). Once again, who can be against it? And what are we supposed to do about it?

The full text of the essay can be found here. Subscribe to the free, weekly Acton News & Commentary and other publications here.

Blog author: jcarter
Thursday, August 14, 2014

keep-calm-and-insert-platitude-1A platitude is a flat, dull, or trite remark, especially one uttered as if it were fresh or profound. Politicians love platitudes, which is why we have laws with names like the Clean Air Act, the Pure Food Act, the Fair Sentencing Act, and the Anti-Puppy Kicking Act (okay, I made up that last one). Since no one is for dirty air, impure food, unfair sentencing, puppy-kicking, who could possibly oppose such legislation?

But the devil, as they say, is in the details. Which is why, as Donald J. Boudreau says, “Platitudes are a poor basis for policy.”


Creation Heart ManBeginning today, Acton is offering its first monograph on Eastern Orthodox Christian social thought at no cost through Amazon Kindle. Through Tues., Nov. 12, you can get your free digital copy of Creation and the Heart of Man: An Orthodox Christian Perspective on Environmentalism (Acton Institute, 2013). The print edition, which runs 91 pages, will be available later this month through the Acton Book Shop for $6. When the free eBook offer expires, Creation and the Heart of Man will be priced at $2.99 for the Kindle reader and free reading apps.

A summary of Creation and the Heart of Man:

Rooted in the Tradition of the Orthodox Church and its teaching on the relationship between God, humanity, and all creation, Fr. Michael Butler and Prof. Andrew Morriss offer a new contribution to Orthodox environmental theology. Too often policy recommendations from theologians and Church authorities have taken the form of pontifications, obscuring many important economic and public policy realities. The authors establish a framework for responsible engagement with environmental issues undergirded not only by Church teaching but also by sound economic analysis. Creation and the Heart of Man uniquely takes the discussion of Orthodox environmental ethics from abstract principles to thoughtful interaction with the concrete, sensitive to the inviolability of human dignity, the plight of the poor, and our common destiny of communion with God.


Today, George Cardinal Pell delivered a lecture at the invitation of the Global Warming Policy Foundation titled “Eppur’ si muove, or ‘yet it moves:’ One Christian Perspective on Climate Change.” He insisted that a scientific consensus is a lazy basis for the making of policy, and that before states impose drastic environmental regulations, an analysis of their demonstrable costs and benefits must be undertaken.

Galileo is supposed to have muttered the lecture’s title after recanting his heliocentrism in the face of a “scientific consensus.” Cardinal Pell spent a large portion of his lecture demonstrating the historical existence of a Medieval warm period which in the last ten years the green movement has tried to explain away, since it’s rather inconvenient to find that pre-industrial man lived in a hotter climate when you want to assert that carbon emissions must be causing current global warming. “And yet, it was warm,” the Cardinal is saying.

Cardinal Pell began with the Tower of Babel, and quoted Leon Kass’s description of that project as “the all-too-human, prideful attempt at self-creation.” Before making any sort of climate policy, the Cardinal warned,

we should ask whether our attempts at global climate control are within human capacity, (that is, the projected human imperium); or on the other hand, are likely to be as misdirected and ineffective as the construction of the famous tower in the temple of Marduk, Babylon’s chief god.

Where is the borderline separating us from what is beyond human power? Where does scientific striving become uneconomic, immoral or ineffectual and so lapse into hubris?

Even more dangerous than ineffectual scientific striving is ineffectual unscientific striving, which what we have when policy is made based not on scientific finding, but on scientific consensus. Of this consensus, Cardinal Pell says it “is a category error, scientifically and philosophically. In fact it is also a cop-out, a way of avoiding the basic issues.” He goes on:

What is important and what needs to be examined by lay people as well as scientists is the evidence and argumentation which are adduced to back any consensus. The basic issue is not whether the science is settled but whether the evidence and explanations are adequate in that paradigm.

The complacent appeal to scientific consensus is simply one more appeal to authority, quite inappropriate in science or philosophy.

Thomas Aquinas pointed this out long ago explaining that “the argument from authority based on human reason” is the weakest form of argument, always liable to logical refutation. [Summa I, 1, 8 ad 2]

Then the Cardinal goes into his lengthy defense of the Medieval warm period, which you may read for yourself in the full text of his speech.

After poking a hole in the green lobby’s weather balloon, Cardinal Pell makes his appeal to lawmakers and bureaucrats.

A final point to be noted in this struggle to convince public opinion is that the language used by AGW proponents veers towards that of primitive religious controversy. Believers are contrasted with deniers, doubters and sceptics, although I must confess no one has dubbed me a climate change heretic.

The rewards for proper environmental behaviour are uncertain, unlike the grim scenarios for the future as a result of human irresponsibility which have a dash of the apocalyptic about them, even of the horsemen of the Apocalypse. The immense financial costs true-believers would impose on economies can be compared with the sacrifices offered traditionally in religion, and the sale of carbon credits with the pre-Reformation practice of selling indulgences. Some of those campaigning to save the planet are not merely zealous but zealots. To the religionless and spiritually rootless, mythology — whether comforting or discomforting — can be magnetically, even pathologically, attractive.

For this reason (among others) I support the recommendation of Bjorn Lomborg and Bob Carter [in The Australian] that, rather than spending money on meeting the Kyoto Protocol which would have produced an indiscernible effect on temperature rise, money should be used to raise living standards and reduce vulnerability to catastrophes and climate change (in whatever direction), so helping people to cope better with future challenges.

It is folly, the Cardinal says, to rush into climate regulation efforts of little proveable benefit when their cost will be extreme. The city of Athens spent half its GDP building the Parthenon, and after eleven years of work had a fantastically beautiful temple to show for its expense. Al Gore hasn’t yet called for a 50 percent green tax, but when he does, will a two degree drop in summer temperatures be worth it?

The text of the speech was released at 3:15 ET and will soon be on the Archdiocese of Syndey’s website. We’ll link it here when it’s up.

Today in Acton News & Commentary we brought you guest columnist Steven F. Hayward’s “Economists in the Wild,” based on his new American Enterprise Institute monograph, Mere Environmentalism: A Biblical Perspective on Humans and the Natural World. Hayward, the F.K. Weyerhaeuser Fellow at AEI, looks at how the “connection between rising material standards and environmental improvement seems a paradox, because for a long time many considered material prosperity and population growth the irreversible engines of environmental destruction.” Not so. Hayward:

The central insight of environmentalism is that humanity’s great leap in material progress has come at a high cost to nature: we tear down entire mountains for their minerals; divert rivers and streams and drain swamps to provide water for modern agriculture and urban use; clear large amounts of forests for other uses, often disrupting crucial habitat for rare animal species; and too often dump our waste byproducts thoughtlessly into the air, water, and land.

But this insight contains a paradox. Environmentalism arose precisely because we have mitigated the material harshness of human life through the Industrial Revolution; as Aldo Leopold, author of the classic environmental book A Sand County Almanac, put it: “These wild things had little human value until mechanization assured us of a good breakfast.”

I want to thank John Baden of the the Foundation for Research on Economics and the Environment in Bozeman, Mont., for bringing this to our attention. Baden’s introduction to Hayward’s commentary is worth reprinting here in full; it’s an excellent thumbnail summary of environmental economics.

Steve Hayward’s column … makes one wonder how noted environmental professionals, and even scientists, can be so, how can I say it gently, remarkably ignorant and intellectually arrogant as this: “Economics is a form of brain damage.” Economics isn’t an ideology or a mental affliction. Rather, it’s the systematic study of allocating scarce resources among contending ends.

When applied to environmental and natural resource problems, its practitioners make a few nearly universally valid assumptions. Here are a few.

When things are free, they are counted as such and hence often over used. Common pools of fish exemplify this.

As scarcity increases, people conserve and innovate. Consider barbed wires introduction to open range, the development of particleboard, laminated beams, and plywood. Entrepreneurs developed these solutions to the increased scarcity of grass and old growth timber.

Property rights and markets peacefully coordinate development and use among people who don’t know one another and generate incentives to act as though they care about unknown others. That’s one under-appreciated function of markets.

Bureaucratic-political management replaces market prices with political favor seeking. Corn ethanol is a classic example that causes untold human misery and great environmental damage.

Wealthier is greener; poverty is the worst polluter.

And this; things that are best and most easily measured are not those that matter most.

Economics isn’t about money, it’s about confronting and helping to resolve the many problems of scarcity in a clear and logical manner. Soft hearts need not imply a mushy brain.

Read Steven F. Hayward’s “Economists in the Wild” on the Acton site. Sign up for Acton News & Commentary here.