The Corner

Responding to Jonathan Chait on My Preference for Technology over Taxes

Several people whom I respect highly have pointed me to Jonathan Chait’s attack on something I wrote about energy and climate recently. He identifies my blog post as some kind of Rosetta Stone to which the spread of reformist conservative opinion on the topic of global warming can be traced. If only.

In the piece, I made a three-part argument. First, the currently proposed Obama administration power-plant regulations designed to reduce CO2 emissions would be a terrible deal for American citizens. Second, the United States actually has an excellent record on climate and energy. And third, this unique performance is due to unique aspects of the American System. (I linked to my recent National Affairs essay that describes this in more detail.) I then ended with four recommendations.

I was specific about the key elements of the American System. I started with what I view as most important in creating the U.S. progress in emissions reduction (and more general economic and technological development): “The primary driver has been the regulatory framework of strong property rights and free pricing.” I then listed the next component: “A second major American advantage is the network of independent petroleum producers, oil-field service companies, and specialized financing expertise that this regulatory structure has allowed to thrive in America over the past century.” Only then did I get to the important role played by government technology investments.

My four recommendations, in summary, were: (1) maintain stronger property rights and lighter business regulation than other countries, (2) invest in general infrastructure, (3) invest in visionary technology, and (4) improve human capital with skills-based immigration and partial deregulation of schools.

Chait’s criticisms seem to be directed at some different argument than the one I made. He seems to believe that I have accepted that climate change represents a fundamental challenge to human civilization that can only be met by achieving the overall emissions targets which he supports, and that I have proposed a solution, which is government-directed R&D that will develop some miracle cure. In fact, I think that the emissions targets he accepts are economically irrational, and that government-sponsored R&D on the specific topic of climate change is one small part of an overall approach to energy and climate, and to economic development more broadly. 

What are Chait’s specific criticisms of my argument and recommendations? He starts with this:

“One obvious problem is that they present basic energy research as something close to a miracle cure — why spend tens or hundreds of billions of dollars complying with caps on greenhouse-gas emissions when instead we can spend a fraction of the sum on cool science?”

Again, I have never supported complying with anything approaching Chait’s preferred level of emissions reductions. I have argued strenuously against it for years. Further, the way that the U.S. has achieved world-leading emissions reductions — not just in the theoretical future of “cool science,” but in the actual United States between 2008 and 2014 — has been a function neither of implementing Chait’s desired approach of carbon rationing, nor of a program of “government invents new gadgets,” but rather has been created by the American System. This system does have government technology investments as one component, but these investments are in a broad range of technologies from space exploration to defense to energy to medical science that tend to have unanticipated effects in all kinds of areas. In the specific case of climate change, it was actually fossil-fuels technologies that have created the American energy revolution, in direct contradiction to the intentions and expectations of most national and international climate authorities as recently as 2008. 

Chait next says this:

“In a 2008 article, Manzi claimed funding basic research would ‘hold the potential for solving any global-warming problem that might develop — for a one-time cost of less than 0.01 percent of U.S. GDP. The incremental cost of this approach could be single-digit billions per year, possibly with partially offsetting spin-off benefits.’”

Note the weird thing about this quote: It mixes up a statement about a one-time cost and a statement about an ongoing annual cost, and makes it sound as if they refer to the same thing. That’s because if you go back to the actual paragraph from which Chait has extracted this quote, you can see that the one-time cost refers to a hypothetical result that would occur if a proposed prize for carbon-scrubbing technology were to succeed, and the ongoing annual cost refers to the funding for what I was recommending in 2008 (and earlier) as a DARPA-like agency focused on energy technologies, which ultimately was launched and funded in 2009 as ARPA-E.

You might expect that the fact of my public advocacy for this organization years before it came into existence might mean that Chait would demand a very high standard of evidence before making his later extraordinary claim that I was unaware of its creation. He cites (but does not quote) an article I wrote in 2011 as his only evidence. Ironically, this is an article in which I praised ARPA-E. It was a piece on government spending and overall deficits in a non-specialist magazine of public affairs, and therefore — having just defined DARPA — I described the entity as “a DARPA analog focused on new energy technologies” without naming it, as I assumed that many readers would not have heard of an agency within the Department of Energy with an annual budget of less than $1 billion. This is, in Chait’s mind, “a phrasing that implies” I did not know that ARPA-E existed.

Chait goes on to his next criticism:

“If the ‘technology-first’ approach truly can produce cheaper green energy, then there’s no harm in setting caps on greenhouse-gas emissions as well — it just means that newer technologies allow businesses and consumers to comply with the caps more cheaply than predicted.”

But, once again, I haven’t argued that the emissions caps proposed by advocates should be accepted in the first place. I’ve argued repeatedly that they are dramatically too aggressive.

Finally, Chait moves on to what he views as his most fundamental criticism:

“The deeper problem with the technology-first line is that the reformicons seem to have no specific idea about how their proposal would work, or even what current technology policy is.” 

But, once again, I have made specific suggestions about what this policy should be — see the article to which Chait links, or the more detailed National Affairs piece. It’s just not what he wants it to be: Some technology master-plan to invent cool new devices that achieve Chait’s policy goal of emissions reductions according to the schedule of reductions that he supports. But I don’t support this schedule of reductions. And I don’t support the degree of precedence of emissions reductions over other policy goals that Chait does. And I believe that what technological progress does get created on this front is far more likely to be achieved through an approach that calls for specific government investments in climate-related technology to be only one part of what is done, and not the most important part.

Beyond arguing with a straw man of his own invention, here’s the thing that Chait never seems to confront about my apparently naive and uniformed approach: It has actually worked better than anything he has supported.

Jim Manzi — Jim Manzi is CEO of Applied Predictive Technologies (APT), an applied artificial intelligence software company. Prior to founding APT, Mr. Manzi was a Vice President at Mercer Management Consulting where ...

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