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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Eli Lehrer on How to Talk About Climate Change: Go for Two-fers



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In a new column at the Huffington Post, Eli Lehrer of R Street explains that because “climate change and closely related issues like energy use simply aren’t at the top of anyone’s agenda,” activists who are concerned about climate change need to “connect climate issues to other matters of public interest”:

Obviously, some of these connections can be made to other environmental issues, but it’s also worthwhile to explore policies that have the benefit of addressing climate concerns while also tackling more pressing concerns. For instance, we should limit subsidies for coastal development and lift state price controls on property insurance anyway. That those policies would also help the public better prepare for the possibility of rising ocean levels or more volatile weather is a bonus.

These strategies may not please everyone on the left wing of the political spectrum. But they’re the most effective ways to confront what’s likely to remain a low salience issue.

This strikes me as a very sane way to approach climate policy, and it reminds of MIT economist Christopher Knittel’s case for a sharp increase in the gasoline tax. Late last year, Knittel and Ryan Sandler of UC Davis published a paper on the health benefits of carbon pricing in transportation:

This paper presents evidence that the net social costs of carbon pricing are significantly less than previous thought. The bias arises from the fact that the demand elasticity for miles travelled varies systematically with vehicle emissions; dirtier vehicles are more responsive to changes in gasoline prices. This is true for all four emissions for which we have data—nitrogen oxides, carbon monoxide, hydrocarbon, and greenhouse gases—as well as weight. This reduces the net social costs associated with carbon pricing through increasing the co-benefits. Accounting for this heterogeneity implies that the welfare losses from a $1.00 gas tax, or a $110 per ton of CO2 tax, are negative over the period of 1998 to 2008 even when we ignore the climate change benefits from the tax. Co-benefits increase by over 60 percent relative to ignoring the heterogeneity that we document. In addition, accounting for this heterogeneity raises the optimal gas tax associated with local pollution, as calculated by Parry and Small (2005), by as much as 57 percent. While our empirical setting is California, we present evidence that the effects may be larger for the rest of the US. [Emphasis added]

My take is different from what I take to be the view of Knittel and Sandler, i.e., I would not favor carbon pricing in transportation to reduce the risk of climate change, as I think that’s not a sound justification for a national, as opposed to a global, carbon pricing system; rather, I would support it solely on the basis of its potential local and national benefits for public health outcomes. 



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