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Climate and the Collective Action Problem



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Toward the end of this post, Jonathan Chait zeroes in on the question of the costs and benefits of the administration’s carbon regs. His target is a Chamber of Commerce study making the case against those regs. Chait argues that the study’s findings undercut its purpose: They show that the new policies would cost the average American only about $100 a year in higher electricity bills.

The study also finds that the regulations will have few benefits because they will cause global carbon-dioxide emissions to drop only 1.8 percent. (If I’m following the Chait post correctly, even that’s an overestimate, since Chait thinks the administration is not going to try to cut carbon emissions as aggressively as the Chamber claims.) Chait says this argument shows “bad faith.”

The assumption, in other words, is that nothing the United States does to limit its carbon emissions will impact the amount that other countries emit. . . .

But that is not an inflated assumption, it’s a completely absurd one. The Chamber is assuming Obama’s plan is to impose costly energy restrictions on itself, and continue to tighten those restrictions year after year, while every other country in the world does nothing at all to limit greenhouse gases. That would be an incredibly stupid plan. Nobody is willing to do that. The whole point of reducing U.S. emissions is to meet targets needed to forge an international agreement.

The premise of the Chamber’s study is that global emissions lie completely outside of American influence, so we might as well use all the dirty energy we can and let future generations deal with it. Against that backdrop, any program to reduce carbon pollution, however efficiently designed, is a pointless waste.

My own opposition to carbon caps does not hinge on the idea that other countries will not cooperate. Even with global participation, I don’t think those caps would do much good for humanity. I don’t think, though, that Chait is doing justice to the difficulty of securing that cooperation.

The Chamber has no obligation to judge Obama’s plan based on what he hopes it will lead other countries to do. And while skepticism about what it will lead other countries to do implies that American carbon caps, however designed, will be a “pointless waste,” that doesn’t invalidate the argument. Maybe it means that American carbon caps will be a pointless waste.

What we’d need to measure to do a cost-benefit analysis of unilateral American carbon restrictions are its costs compared to the expected benefits of the carbon reductions it would achieve, counting both U.S. reductions and foreign countries’ reductions induced by our example. But looking at it from the perspective of India or China, for example, I’m not sure what the upside of following the American example is supposed to be. Now if they adopt their own regulations, they get the added benefit of . . . our continuing down a course on which we have already started?

I’m sure it’s possible to find costless comments by officials in other countries saying that they would be more likely to take dramatic steps if we did, but I think a lot of skepticism is warranted.



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