Who will pay for climate change?
THE PROBLEM of global warming is a near-perfect example of the tragedy of the commons. Greenhouse gas emitters, from corporations to cows, reap all of the benefits of their dangerous habit, but pay almost none of the costs. It is thus very difficult to get them to stop. Governments are traditionally supposed to step in to fix the problem, but this has proven very hard for them to do. In part this is because almost everyone emits quite a lot of carbon; transportation, air conditioning, and home heating are leading sources of greenhouse gas emissions. Until clean, cheap renewable energy sources are perfected, this means that any politician who takes serious action to cut carbon pollution is likely to be quickly shown the gate. And serious action is needed. As MSNBC points out: Even if fully implemented, Kyoto would cut a projected temperature rise by just 0.1 degrees Centigrade by 2100, according to U.N. figures tiny compared to scenarios by a U.N. climate panel of an overall rise somewhere between 1.4-5.8C by 2100. At that, almost no one is on track to meet their Kyoto targets. Europe is among the closest, but it got two huge serendipitous boosts: for unrelated reasons, Britain closed its coal-fired power plants in favour of abundant natural gas; and Germany shuttered many of the East's woefully inefficient polluters after unification. Today Sir Nicholas Stern, the head of Britain's Government Economic Service, has issued a report on the costs of climate change which is aimed at chivvying governments into doing something about it despite the seductive lure of free riding. Particularly, it is hoped that America will finally decide to get serious about the problem, thanks to the report's conclusion that the costs of inaction are bigger than the costs of serious emission reduction: a reduction of 20% of global output is not out of the question. The problem is, this doesn't necessarily mean that the costs to America will be higher than the costs of inaction. The damage of climate change seems likely to be unequally distributed--some regions may actually benefit, while others, like Bangladesh, will be devastated. Moreover, though economists have long argued over how much people should discount future costs when weighing them against current benefits, voters incontrivertibly do so. Especially when averting those problems requires them to give up significant current comfort. And politicians, who are unlikely to be in office when the problems materialise, are even more aggressive discounters than their constituents. This all makes the Stern report rather depressing reading. Ironically, the most hopeful finding of the report may be that global warming is happening faster than expected. This may make voters, and the politicians they elect, more focused on the problem.