Last week, a major climate skeptic made big waves when he endorsed the view that there has been significant global warming resulting from human activities. After his unexpected testimony before Congress, global warming activists trumpeted his alleged “conversion” as proof that the United States needs to adopt a “cap and trade” carbon taxation scheme. These climate alarmists display a stunning lack of understanding of climate change when they propose to solve it via unilateral carbon taxes: A global pollution problem cannot ever be solved by unilateral action.
Dr. Richard Muller, a respected professor of physics at UC Berkeley, had long been critical of what he termed climate alarmists. After years of independent study, however, he concluded that there has, in fact, been a general warming trend that has loosely followed increases in human production of so-called greenhouse gases. Global warming activists declared a major victory after his testimony, and immediately made a push to resurrect a dormant proposal to tax the production of carbon dioxide.
Unfortunately, such asinine leaps are symptomatic of the rigidly ideological public sparring over global warming. On the left, green activists make unsubstantiated, apocalyptic predictions about the future, while on the right, pundits regurgitate talking points about shoddy, biased climatology research. Consequently, the debate over the public response to global warming has far too often centered on the degree of warming over the past several decades, rather than the much more relevant metric of weighing costs and benefits of actual proposed solutions to increased production of greenhouse gases.
Assuming that there is man-made global warming, it is caused by the production of greenhouse gases all over the globe. The problem with a unilateral carbon tax is precisely that it doesn’t operate globally: It would only tax carbon dioxide production in the United States. In a globalized world where China, India and other developing countries are responsible for ever-larger shares of industrial activity — and already aggregately produce several times more greenhouse gases than the Untied States — limiting American production of greenhouse gases won’t make a serious difference, even in a naïve model that doesn’t incorporate game theory and trade economics. All it would do is harm American manufacturing and cost American jobs through an additional tax burden.
When you remember that the United States has relatively free trade with most of the world, the outlook on carbon taxes gets even worse. Firms locate production facilities wherever costs are lowest, and a carbon tax would simply result in most American factories shutting down while new factories are built in China and India to produce the exact same goods. Not only would there be no impact on greenhouse gas production, but it would also cost countless American jobs at a time of dangerous unemployment levels.
To their credit, a few climate alarmists have recognized that unilateral action is tantamount to economic suicide and unlikely to impact greenhouse gas production or slow warming. These slightly wiser activists have focused their attentions on proposed treaties that would bind many nations together in a joint carbon tax scheme. Unfortunately, this makes no practical difference: Treaties are voluntary, and there is no inducement that would make China or India (or any one of countless other developing economies) adopt meaningful carbon taxes, since it would stunt the rapid growth those countries are experiencing. If the United States, Canada, Europe, Australia and Japan all adopted carbon taxes and the rising developing countries didn’t, it would simply transfer wealth from the high-minded developed countries to the developing countries, and without reducing emissions.
The only way to make the adoption of carbon taxes result in actual reductions in greenhouse gas production would be to end free trade by imposing tariffs on goods from countries without carbon taxes, and that would result in a ruinous trade war like that of the 1930s: Greenhouse gas production would be reduced, but at the cost of dramatically reduced economic and industrial activity. Quite simply put, carbon taxes are not the solution unless you believe that temperatures rising one or two degrees justify massive increases in poverty worldwide.
A globalized world with relatively free trade has brought about unprecedented wealth, economic growth and opportunity — especially in developing countries where billions are emerging from poverty for the first time in history — but it also prevents unilateral actions by one or a few rich countries from effectively solving global pollution issues. If we get all those climate activists pushing for research in engineering solutions — rather than unworkable policy solutions — to rising greenhouse gas levels, they might actually do some good for a change.
Trevor Wagener is a senior in Pierson College. His column runs on alternate Mondays.