Thursday, June 4, 2009

If China were a Cyclist...

Harvard vs. Princeton. Washington Post vs. NY Times. Strangelove vs. John Lennon.

In a Post article, Harvard economist Martin Feldstein blasts the Waxman/Markley carbon emissions bill:

"The proposed legislation would have a trivially small effect on global warming while imposing substantial costs on all American households."

Feldstein's recommended course of action? Wait until we have a global agreement before doing anything ourselves.

In his NY Times blog, Princeton's Paul Krugman fires back, accusing Feldstein of underrepresenting the potential reductions in emissions, and more dramatically, of consigning the planet to the flames. Here's Krugman:

"Finally, and most important, anyone who has been following this issue at all knows that saying

The U.S. should wait until there is a global agreement on CO2 that includes China and India before committing to costly reductions in the United States.

is basically saying let the planet burn. The only chance we have of a global agreement is if the United States moves first; it will quickly be followed by other advanced countries, and then we sit down and use a combination of carrots and the threat of big sticks to get developing countries into the fold."

Two brilliant economists. Two very different recommendations. Neither has the math on his side. No advances in game theory, no impressively technical articles in econ journals, will settle the dispute.

It's a simple collective action problem. Everyone would be better off with a global reduction in carbon emissions. Everyone would be better off with an increase in their own, local, carbon emissions (other things being equal). These two conditions are at odds.

I am reminded of debates in the Cold War about whether to begin nuclear disarmament unilaterally, or, like Dr. Strangelove, to embrace the doomsday machine and wait for the other side to blink, which is sort of what we did.

Krugman is advocating, as a first step, unilateral disarmament. Feldstein is fantasizing about the generous female / male ratio in the mineshafts.


But look here doctor, wouldn't this nucleus of survivors be so grief stricken and anguished that they'd, well, envy the dead and not want to go on living?


No sir... Right arm rolls his wheelchair backwards. Excuse me. Struggles with wayward right arm, ultimately subduing it with a beating from his left.

Also when... when they go down into the mine everyone would still be alive. There would be no shocking memories, and the prevailing emotion will be one of nostalgia for those left behind, combined with a spirit of bold curiosity for the adventure ahead! Ahhhh! Right arm reflexes into Nazi salute. He pulls it back into his lap and beats it again. Gloved hand attempts to strangle him.


Doctor, you mentioned the ration of ten women to each man. Now, wouldn't that necessitate the abandonment of the so called monogamous sexual relationship, I mean, as far as men were concerned?


Regrettably, yes. But it is, you know, a sacrifice required for the future of the human race. I hasten to add that since each man will be required to do prodigious... service along these lines, the women will have to be selected for their sexual characteristics which will have to be of a highly stimulating nature.


I must confess, you have an astonishingly good idea there, Doctor.


Thank you, sir.

I have a metaphor more likely to resonate with cyclists. But first of all, the facts...

In absolute terms, the US leads the world in carbon emissions at approximately six billion metric tons. China puts out around five billion metric tons, but is poised to overtake us. The average Chinese citizen is responsible for about four metric tons of carbon per anum. The average US citizen? Over twenty. Historically, the gap has been much larger, of course.
So China's position: you go first. While it's making tremendous technological advances on carbon sequestration and so on, it won't promise to do anything before 2020.

Ok, at long last, here's the cycling analogy.

China is "Big" Jens Voigt. Jens has been "dieseling" on a break over the past 120 kilometers, holding at least a few minutes on the peleton. Sitting on his wheel are some scrawny French dudes from FDJeux. They've been basking in his slipstream all day. Now there's 10k to go and the sprinters are starting to reel in the break. If Jens and the FDJeux guys don't work together, they'll be caught for sure. But Jens feels entitled to a rest. He's looking to sit in for awhile and unleash on the last kilometer.

Here's FDJeux Feldstein: Why should we drag Jens to the line? Even if we do pull, as long as Jens just sits back there, we'll probably still be caught. So we shouldn't do squat until Jens agrees to take his turns at the front.

FDJeux Krugman: Idiots! You're giving up! If we don't pull right now we'll all get caught. Our only chance to win is to go to the front and then through a combination of carrots and sticks, try to get Jens to do some more work.

Except, of course, getting caught by the charging peleton is, in our case, the global climate spiraling into the terrifying unknown.

My sympathies lie with Krugman. I don't relish the idea of playing an environmental game of chicken with the Chinese. They've already demonstrated a willingness to poison water and air for the slightest of economic advantages. And their steroidal chickens scare the heck out of me. I say we first pass the bill, flawed as it is, and then eventually institute, or threaten to institute, a carbon-based tariff scheme to bring others along.

Then again, I didn't win the cold war.

Also, if you find yourself in a break with me, and by some miracle I am still physically capable of pulling, you can probably take advantage.


Jim said...

>>>>The average US citizen emits over 20. Historically, the gap has been much larger, of course.

The average chinese citizen (700 million of them are peasants living in a coal/wood burning economy) who earns perhaps $5500/annum, and produces roughly $6500 of goods and services toward the gross national domestic product of China. The average American citizen makes around $37k per year ($51k household) and contributes around $47,000 to the GDP. China's GDP is close to the US's GDP. It's just divvied up over roughly 4 times the population. So it's a silly apples-to-komodo dragons comparison that makes no sense at the git-go. That tells you it's an enormously inefficient (in the broad sense of productivity per labor input) economy. Seeking efficiency gains in the most glaring examples of inefficiency probably gives the most bang-for-the-buck if you're looking at global climate change as a global problem. Assuming that economic activity is the prime mover of global climate change, it would make sense to go after the global issues first. But looking to improve marginal efficiency within an already fairly efficient economy (within the tight constraints imposed by physics) is going to come with marginal costs. Marginal costs are inevitably extremely painful, unless dealing with the externality of carbon footprint is more important than preserving prosperity in the main economic enterprise. I'm not sure this would be unilateral carbon disarmament as much as it would be unilateral economic disarmament.

But then the voters put in office people who said that we must clean up our own house w/r/t carbon outputs no matter what the cost. Given the difficulty of improving the efficiency of carbon-based energy usage, I suspect we'll have a chance to test whether they really mean "no matter what." People who say stuff like that usually mean "I'll pay some but not too much," in my experience.

qualia said...

Excellent points, all. Everyone should agree that we first pluck the low hanging fruit. To the extent that we can improve efficiency, there are no losers, only winners. This is what you trot out on the campaign trail: we can have A AND B! (Just like we can protect our citizens AND preserve our values.)

But at some point, all the remaining fruit is up high and it's now zero sum. At that point, we have a classic collective action problem.

And yeah, China will be a tough negotiating partner at that point. We'll have an awful choice. Lose economically, and unfairly, to the devil may care Chinese, or watch the climate go crazy. Or both, even.

Let me point out: the planet doesn't care that the US has greater economic output, per capita. Interesting that the background idea of fairness here is carbon per unit of gdp, rather than carbon per person.

$1, one ton of carbon emissions? or 1 person, one ton of carbon emissions?

I'm not taking sides. Just saying, there is an interesting question of fairness here.

Also, note that much of China's carbon output is from manufacturing US goods, so is also, indirectly, our responsibility.

qualia said...

Another point.

China acknowledges that it can more cheaply improve efficiency than we can. That's why it's calling on the 'developed' world to pay for efficiency upgrades in the developing world. In other words, they think we should subsidize their efficiency gains rather than working on our own.

That doesn't seem *fair*, but it is *efficient*.