In “The New Abolitionism,” Chris Hayes of MSNBC observes that just as the end of chattel slavery meant that Southern slaveholders lost what they had come to understand as an income-producing asset, the fight against climate change requires that fossil fuel firms surrender their right to extract and exploit carbon. “So in order to preserve a roughly habitable planet,” Hayes writes, “we somehow need to convince or coerce the world’s most profitable corporations and the nations that partner with them to walk away from $20 trillion of wealth.” Hayes’ essential point is that the threat of expropriation is so potent that fossil fuel firms will fight it tooth and nail, which makes the battle against climate change truly cosmic.
Josh Barro replies that Hayes’ analogy is flawed, as the chief beneficiaries of the abolition of slavery — enslaved Americans — were excluded from the political process. The chief beneficiaries of carbon limitations, in contrast, are people with considerable political power, e.g., consumers who would prefer to avoid the disruption that climate change might otherwise cause. (Barro doesn’t explicitly single out clean energy firms and their investors, but this is another constituency that would benefit from carbon limitations.) The bulk of Barro’s post concerns the possibility that while the conflict between abolitionists and Southern slaveholders couldn’t be resolved through a buyout, in which the federal government or some other entity would compensate slaveholders in exchange for their acquiescence to the dismantling of the peculiar institution, the conflict between fossil fuel firms and those who want to impose carbon limitations might be more amenable to such a compromise. A while ago, Matt Frost wrote a sketch of an essay (“Keeping Coal in the Ground, or, Sequestering Carbon Before It’s Burned“) on what compensation might look like:
The ideal solution to carbon pollution is a zero-carbon energy source cheaper than fossil fuels. In the absence of such a technology, the developed economies have tried to price CO2-related externalities into the market cost of coal, oil, and natural gas, in hopes that alternatives would become less expensive in comparison. Because coal is more carbon-intensive than natural gas or petroleum, it is the fuel source most sensitive to the imposition of carbon-based penalties, and offers the greatest potential for single-source carbon reduction. None of the various attempts to reduce CO2 emissions, such as a carbon tax or a credit trading market, have been successful, in part because advocates have shifted their efforts among several strategies, allowing their opportunistic opponents to shoot down each weakly-defended idea one at a time. The U.S. carbon abatement community lacks a clear focal point toward which its policy efforts can be coherently directed.
So, as my gift to America’s environmental policy entrepreneurs, here’s a proposal that focuses on the fuel source and sector with the greatest potential for incremental carbon abatement, could reduce emissions by about 40 percent of the reduction that a full switch to low-carbon resources would accomplish, uses currently available technology, does not require unrealistic levels of international cooperation, does not create artificial markets in ephemeral government-enforced carbon credits, and can be financed with federal debt spending, rather than by a distributed tax on energy consumers. Its only major counterfactual assumption is the political will to pay for averting carbon emissions with an enormous lump of debt spending, but I’m going to assume that particular can opener for the sake of argument. A preference for carbon reduction is concentrated among the political elite, so the least-impossible solution would be one that exploits the tools available to the US’s permanent government (regulation and deficit spending), rather than one that assume popular acceptance of higher energy costs.
Frost meets various objections, short of the obvious political one, with aplomb, and I recommend his sketch to anyone interested in the practicability of carbon limitations. He has come up with a scheme far more plausible than the various efforts to “create artificial markets in ephemeral government-enforced carbon credits” that we hear so much about. I am ultimately more sympathetic to Oren Cass’s approach to U.S. climate policy, but Frost’s proposal merits serious consideration, or rather it merits as much serious consideration as more traditional approaches to carbon pricing.