The ethical emitter
Climate change is a hard problem. I mean really hard. You know in your heart how hard it is, and then you start thinking about it and you remember all over again that it’s even harder than *that*. For all sorts of reasons, like: the warming we are experiencing right now is the product of greenhouse gas emissions pumped into the air in the century or so prior to this moment, which will continue to exert a warming effect for years to come, which means that the effect of any changes we make to our behavior right now will be essentially imperceptible for years to come and will overwhelmingly benefit people who are either very young or not yet born. What’s more, many of those beneficiaries—honestly the overwhelming majority of them—will live in other countries, where people speak other languages and worship other gods. And even they will not see much benefit from our actions, no matter how dramatic¹, unless all the world’s other major emitters of greenhouse gases also take dramatic action, even though many of them are much poorer than us and haven’t contributed nearly as much to warming as we have and also don’t like the idea of sacrificing heavily today to benefit the foreign-born youngsters of tomorrow.
Honestly, the only rational individual approach to warming is to do absolutely nothing about it, other than to take extensive preparations to limit the harms you personally expect to face as a consequence of climate change. But that’s not very satisfying, because as utterly tiny as your contribution to climate change is, it is nonetheless a contribution to this incredibly serious problem which threatens to kill millions of people, undermine global peace and prosperity, and wreak all sorts of havoc on plant and animal life around the world. We have a moral obligation to try to minimize the harm done by climate change, however hard the problem is.
I think it’s important to keep that moral obligation in mind. Faced with the world’s failure, so far, to take meaningful action to slow the pace of warming, a lot of writers and thinkers have a go at framing the fight against climate change as a matter of self-interest, believing that that will be the way in which arguments in support of emissions reductions gain traction. Climate-related disasters, perversely, are good things under this approach, because they allow people to say that the next storm, or fire, or drought may come for you and the people and financial assets you love. And look, it is certainly true that climate change stands to harm even those of us safely ensconced in our rich, temperate countries. Disasters will affect us. Disasters that affect others will also affect us: through global markets, geopolitical instability and mass migrations. But the self-interest argument simply isn’t powerful enough: the people whose behavior matters most are also those for whom the personal economic calculation most favors inaction. Ultimately, the will to address the problem must be created through the cultivation of empathy for others quite distant from us in time and circumstance, and from the idea that disregarding their welfare is morally wrong.
Which is something I got to thinking about as I read an interesting recent column by my friend and former colleague Greg Ip, in the Wall Street Journal. Greg writes:
[E]nvironmentally conscientious bankers and investors are rushing to get on the right side of history by shunning coal, Canadian oil sands and arctic drilling.
But for all its attractive symbolism, divestment isn’t going to shrink the fossil-fuel industry. Capital and oil are the world’s two most fungible commodities. Choke off one source of money—say, bank loans—and another will fill the void. Leave one deposit of oil and gas in the ground, and there are lots of others to exploit.
The hard reality is that as long as demand for oil, gas and coal keep growing, supply will find a way to meet it. To slow climate change, the world must address fossil-fuel demand, not supply. That can be achieved only through difficult political decisions rather than public shaming.
His point is a simple one. There’s oil all over the world, and the price of oil is set on global markets. If we could somehow shame Exxon into stopping oil production entirely, that would simply push the price of oil up relative to the level it would otherwise have attained, which would in turn encourage other oil producers to supply more, essentially leaving both the supply of and demand for oil (and the consumption of oil and release of related emissions) unchanged.
More broadly, there are fossil-fuel sources everywhere, and enormous systems in place for turning those fuels into usable energy, and massive and global demand for that energy. As good as it might make you feel to get your university to ask its investment managers to pull endowment funds from fossil-fuel stocks, actions like that will not meaningfully impede the daily matchmaking between suppliers and demanders of dirty fuels. What’s needed is top-down action by governments, working in concert, to change the economics of fossil-fuel consumption: by passing a carbon tax for instance. (Greg does say, I should note, that public pressure campaigns could help if they encourage green investment, which is certainly true.)
It’s hard to fault the logic, and while I’m not going to take the time to go looking I suspect I may have written arguments which are similar in spirit in the past. But I’m no longer sure that this particular take is the right one.
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Start with this: if something is wrong, you should stop doing it whether or not doing so eliminates that form of wrongness from the world altogether. That is, it can be the case that refusing to invest in fossil-fuel companies is the right thing to do, even if refusing to invest in fossil-fuel companies won’t end global warming, or even cause those companies any financial difficulty. Now we quickly run into a number of problems here. One is: what counts as a fossil-fuel company? Almost every business in operation generates emissions in some way, so where do you draw the line? And what about personal behavior? Living a zero-emission lifestyle in the rich world isn’t impossible, but it’s pretty close. You can’t expect moral arguments to play a meaningful role in stopping climate change and then insist that people adhere to an impossibly demanding moral code. People will just say fuck it, I have enough to worry about. We want to encourage people to make reasonable sacrifices for the good of humanity, not force them into a choice between radical asceticism and moral ambivalence.
Luckily, we don’t have to. We can say, first, that some members of society can more easily take on the role of moral leadership than others, and some companies are more obviously responsible for turning fossil-fuel sources into dirty energy than others. Rich investors and hugely profitable funds aren’t going to suffer much by divesting from oil and coal producers, and it’s reasonable to ask that they do so. The rest of us have an obligation to try to reduce global emissions as best we can, having recognized that imposing serious, long-lasting harms on others is wrong. It’s not the easiest thing to ask of ourselves, and many of us will do a crap job. The world doesn’t make it easy to reduce one’s carbon footprint, and efforts to do so now will be annoying and frustratingly ineffectual. But it’s important to recognize the obligation and work toward meeting it. Because it’s the right thing to do.
But still, how can it be the right thing if it makes no difference whatsoever? And isn’t this whole approach—having mobs of insufferably greener-than-thou lefties shaming people because they order the beef instead of the soy, or drive to work because they can’t afford to live in a place with good transit—just the sort of thing that will harden the hearts of most Americans? Well look, first, it’s also wrong to be a judgmental asshole, and people who are not yet particularly committed to the effort to stop climate change deserve empathy just as Maldivians and Bangladeshis do. It’s important to remember that the point is to make the world a better place, not to create and win yet another status competition.
And second, it’s also the case that accepting our moral obligations might well make a difference. There are lots of ways to think about moral rules, but one is that they are behavioral guidelines which, when widely observed, can make us all better off. For those of us accustomed to speaking in the language of costs and benefits, incentives and institutions, things like “moral guidelines” might seem utterly useless in a public-policy context. Companies are out there maximizing profit! Households are maximizing their utility! If we want to make a difference we need to use tangible policy levers to influence the costs and benefits in their utility calculations!
But none of us live the entirety of our lives this way. We don’t betray friends and colleagues when we discover there might be a financial advantage to doing so. I mean some people do, but most of us don’t. We report taxable income even when we don’t have to and could probably get away with not doing so: again, not all of us all the time, but most of us most of the time. We go into most of our commercial relationships trusting that the other party won’t take us for all they can get: putting our faith in the notion that they will obey some moral guideline not enshrined in law even though they stand to make less money as a result. We do all of that, and we get really upset when we’re let down by others who don’t. We tell our friends! Holy shit, you won’t believe what happened to me the other day, we tell them. When we do that, we are recognizing a moral rule and reinforcing its role in society by sharing with others our disgust at its violation, expecting that those others will likewise acknowledge and bolster the rule by agreeing that that guy was in fact a huge jerk.
These sorts of guidelines are economically important, and can be couched in economic terms. Samuel Bowles, whose very good book “The Moral Economy” I highly recommend, points out that a lot of the bedrock assumptions that economists make about how markets work assume (sometimes explicitly, but mostly not) that transacting parties can costlessly create complete contracts, which set out who is entitled to what in all states of the world. But this is almost never the case in the real world. And the reason the economy doesn’t just grind to a halt—or, more realistically, operate at far lower levels of income and productivity—is because there are all sorts of ethical guidelines embedded in the cultural fabric which keep the system running. Most of which boil down in some way to: you need to take into consideration the welfare of others. And because people generally do follow those guidelines they don’t take every possible opportunity to enrich themselves, and the economy continues to function reasonably well despite the fact that we cannot cover every aspect of every financial transaction with a complete contract.
It’s wrong, in other words, to think of the market as powered solely by the pursuit of self-interest. The market is powered by the pursuit of self-interest *tempered and constrained* by a critically important body of ethical infrastructure. Moral rules are a complement to the operation of the market economy. They’re a complement to the effective operation of other important institutions as well: like government. The work of government is absolutely filled with opportunities for corruption and self-dealing, and all of the clever institutional design, monitoring and prosecution in the world won’t keep it from becoming wholly rotten if there isn’t a strong ethical culture among public servants.
I have lots more to say on this line of thought, such as: ethical norms can change over time, and we should be careful not to undermine the ones that make our prosperity and our democracy possible. But this post is already quite long, so let’s get to the point. Whatever institutional arrangement society develops which allow it to effectively reduce emissions will rely in part on moral guidelines. It will be moral rules that keep cheating and fraud and reneging on obligations in check: low enough that monitoring and other accountability mechanisms can perform their function at reasonable cost. The stronger our moral commitment to reining in climate change, the more robust any given emissions-reduction agreement will be. And if the moral commitment isn’t there, even the most elegant of treaties and regulatory regimes won’t solve our climate problem—assuming they could somehow be magicked into existence in the first place.
Just as importantly, moral obligations are the way we get to an institutional solution in the first place. Appeals to self-interest will not be enough, I believe. And so however certain we are that a coordinated global carbon-tax regime and generous multinational investment in clean-energy research represent not only the most efficient way of dealing with climate change but a necessary component of any effective mitigation strategy, we cannot and should not neglect the importance of the moral argument. And that moral argument has to be real in people’s daily lives or it won’t resonate, because people’s real daily lives are where the costs of “real” climate policy, based on changes to tax and regulation and so on, will be felt by voters and workers and taxpayers.
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This week’s column is a look at yield-curve control, a monetary-policy strategy which seems to have caught the interest of some members of the Federal Reserve. I won’t say more, because once monetary policy takes root in a blog of mine it’s almost impossible to eradicate.
¹ The economics and the ethics of geoengineering—a policy option which deserves serious consideration and discussion—are a bit different. For an excellent treatment of some of the critical issues, I recommend “The Planet Remade”, by my friend and colleague Oliver Morton.