Archive for the ‘David Henderson’ Category

Bob Murphy speculates on "The Benefits of Procrastination: The Economics of Geo-Engineering" – Cui Bono?

December 19th, 2009 2 comments

Bob Murphy (Senior Fellow in Business and Economic Studies at Pacific Research
Institute, and economist with the Institute for Energy Research) has a recent post up on the wonders of “geo-engineering” as a cure-all any potential negative consequences for our unmanaged, unrepeatable experiment with the Earth`s climate and ocean systems, appearing online as the “featured article” at The Library of Economics and Liberty.

David Henderson, whose Econoblog appears at LEL, has a post up that calls attention to Bob`s piece. I tried to post the following comment there, but since it didn“t post immediately I`ve decided to copy it here.

I note I`ve made a number of posts on geo-engineering over the past two years, including no little head-scratching over the lack of any consistent concern for principle with which Austrians seem to approach the topic.

Given Bob`s speculation on benefits, I couldn`t resist my own obervations on “who benefits”, which I have addressed more carefully here.

Here`s my comment:

Murphy may have a point about the cost of Waxman-Markey, but beyond that he is arguing at strawmen and failing to consider alternative policies, such as:

– cap-and-dividend (or alternately using revenues to eliminare corporate and payroll taxes),

– enhancing efficiency/conservation by eliminating public power monopolies,

– eliminating subsidies for dirty coal embedded in the Clean Air Act, and

– removing federal insurance caps and easing licensing hurdles for nuclear power.

We can do much to address climate concerns in ways that clearly enhance wealth, and carbon can be priced in ways that are progressive rather than regressive, but we never hear a peep about this from Bob. Does he not want a freer and more efficient economy?

Further, Bob totally fails to address ocean acidification (ecept to quote Gavin Schmidt to indicate it may be a problem), and it seems that Bob doesn`t really have a clue about the very long-term duration of the threat posed by emissions of CO2. Absent very extraordinary measuers, we are committing the climate to millenia of change.

GDP arguments are singularly unconvincing, not simply because damage to ecosystem assets is not counted (other than perhaps perversely as positive GDP growth as people are forced to pay money for adaption), but also because such they fail to measure RISKS, and in any case, such measurements are fundamentally incapable of measuring PREFERENCES [or disputes over rights].

Sure, we have to seriously consider geo-engineering options, because we now, for all practical purposes, have no real prospects of stopping rapid growth in CO2 levels as economic growth continues worldwide. We have painted ourselves into a corner, and continue to tighten the corner for our children. Bob fails to understand that the geo-engineering options he considers are all very limited bandaids with potential costs that are unlikely to be borne solely by those who try to implement them.

Finally, given all of the uncertainities about the costs and benefits of geo-enginnering options AND the existence of policy options other that cap-and-trade, Bob is totally unjustified in his sweeping generalizations that procrastination may be optimal. “An ounce of prevention is worth a pound of cure” comes to mind, as well as the thought that if one has trepidations about the nature of the road ahead, it makes sense to get ready, including studying geo-engineering – but it`s hardly a precaution if one, instead of taking his foot off the gas, rather slams it down on the pedal – exactly the “conservative” course that Bob actually counsels.

Let`s not ignore that the “status quo” course is actually a path of continued massive geo-engineering, via CO2, other GHGs, soot from coal fires and coal-powered plants, and continuing tropical and Siberian deforestation.

How convenient that the “conservative” course is the one that suits those who have been generating climate risks, and who are loath to surrender their “homesteading” rights over our atmosphere and central governments.

And how convenient that they pay Bob.