Earth Day Special: The Great River Valleys of Asia
Bloomberg: Destroying Their Reputation DeLong Smackdown Watch

Earth Day Special II: More on My Global Warming Panic Attack

And we are live at The Week:

Global Warming Panic Attack - The Week: Media personalities and Freakonomicists claim that the planet has recently experienced global cooling. But according to NASA’s Goddard Institute for Space Studies, we have just experienced the hottest twelve-month period in at least a thousand years.

If global temperatures continue rising at the rate they have risen for the past generation, then the world of 2100 will be 2.3 degrees Celsius – that’s 4.1 degrees Farenheit -- hotter than the world of the 1970s. If global warming accelerates, however, as industrializing China, India and other countries pour more greenhouse gases into the atmosphere, and as Indonesia, Brazil, and others cut and burn their forests, the world in 2100 will be 5 Celsius -- 9 Farenheit -- degrees hotter than the world of the 1970s.

In a more hopeful vein, if we are lucky, we might discover powerful carbon-sink processes that absorb carbon dioxide or reflective-cooling technology that reduces warming. Or we might discover magical new  non-greenhouse-gas emitting technologies that can be deployed more cheaply than current carbon-based technologies. In any of these scenarios, we may wind up with a world in 2100 that is little warmer than the world of the 1970s. At least we can hope.

But hope is not a plan. The world was supposed to plan at Kyoto. It did not. Subsequently, it was supposed to plan at Copenhagen. Again it did not.

So right now I am panicking. And in my panicked state, I become shrill and unrealistic. So I am calling for four actions--at least one of which, in particular, is robustly unappealing.

  1. Beg the rulers of China and India to properly understand their long-term interests;

  2. Nationalize the energy industry in the United States;

  3. Pour money into research on closed-carbon and non-carbon energy technologies in order to maximize the chance that we will get lucky on energy technologies if not on climate sensitivity.

  4. Restrict future climate negotiations to a group of seven -- the U.S., the E.U., Japan, China, India, Indonesia, and Brazil -- and enforce agreement by substantial and painful trade sanctions on countries that do not accept the demands of the resulting negotiated system.

In a later column, I will address points (3) and (4). Meantime, let me just talk about (1) and (2).

First, I want us to beg the rulers of China and India to understand their own situation. Unless the North Atlantic Conveyor shuts down and Europe returns to the climate of the Younger Dryas Era (the big freeze of more than 10,000 years ago), global warming will not be hugely problematic for the North Atlantic economies -- at least not for a century. We’ll mourn the loss of our glaciers and snow packs. We’ll lament the extinction of polar bears, the coral reefs, and the giant sequoias. But we’ll welcome extra sunny days to go to the beach. We’ll move a few miles north, relocate economic activity to get out of the paths of hurricanes and droughts, turn down our heaters, turn up our air conditioners, and live our lives. It would be expensive for us to adapt to warming -- more expensive, I believe, than dealing with the problem -- but we could do so.

But China, India and their neighbors in the great river valleys of Asia will soon be home to three billion farming peasants. These farmers depend on the regular monsoon rains and the river flows of the Indus, the Ganges, the Mekong, the Yangtze, and the Yellow Rivers. Global warming means their climate will change. There will either be much more precipitation in the valleys feeding the rivers, or much less. If there is much less, hundreds of millions will face drought and famine. If there is much more, millions will likely die in floods and the dwelling and working places of hundreds of millions will be washed away. Unlike North Americans, Asia’s peasant-farming populations are not rich enough simply to adapt.

So we need to beg the rulers of China and India to understand their long-term interests. The welfare of their countries over the next four generations depends on gaining rapid control of global warming. Their own personal survival — unless they want mobs descending on their homes, dragging them and their descendants into the streets — depends on it. And because either China or India is going to be the globe’s dominant superpower in a century, even if they are clobbered by climate change, pleasing that future superpower now is in every country’s interest. So we need to beg the rulers of China and India to recognize their own long-term interest, and to help us get this climate-control party started.

Allow me to make the first entreaty. Rulers of China and India: I beg you. Get on board. Please.

Second, I want us to nationalize the open-carbon-cycle energy industry in the United States.

In the 1960s it became clear that the price of oil in the United States should be higher. Because of powerful congestion and pollution externalities, we were over-investing in the automobile civilization. A larger tax on oil would have nudged the economy closer to the social optimum.

In the 1970s it became very clear that the price of oil in the United States needed to be even higher. Because of instability in the Middle East, our dependence on that region as a major source of energy created unacceptable geopolitical risks. A larger tax on oil would have nudged the economy into a new configuration, mitigating the danger.

At the start of the 1990s it became painfully clear that the price of carbon energy needed to be higher: the global warming threat was upon us. Yet the price increase never materialized. It never happened because of what the inner circle around my ex-boss, former Texas Senator and U.S. Treasury Secretary Lloyd Bentsen, used to call the “ullengaz” industry – “oil and gas.” This potent industry has blocked desirable public policy regulation for nearly fifty years now.

In general, I am opposed to state-run, nationalized industries: managing industry is without a doubt the private sector’s role, not the government’s. As a neoclassical economist, I risk having my union card revoked when I advocate government ownership of what otherwise could be a profit-making private enterprise.

But the interaction of rent-seeking industry with a flawed political system has made me willing to make an exception in the case of America’s carbon-based energy industry. True, government ownership will increase inefficiency and the misallocation of resources. But it will also increase political efficiency, since the energy industry will no longer be able to purchase Members of Congress and use them to strangle the policy innovations needed to advance the national interest. So nationalize the carbon energy sector -- not to expropriate wealth or to penalize shareholders, but to remove a selfish and destructive political force that threatens our future.

Radical proposals? Yes.

Indeed, you may think they are shrill, impractical, and utopian proposals. (I, also think they are shrill, impractical, and utopian proposals.) You may think we should instead continue down the energy and environmental policy path we have traveled so many times before, meeting the same legislative roadblocks. You may think that we should simply try again, and hope that this time it turns out differently.