Monday, April 04, 2011

Krugman on Climate Policy Gridlock

In this piece, the Nobel Laureate writes; "But it’s terrifying to realize that this kind of cynical careerism — for that’s what it is — has probably ensured that we won’t do anything about climate change until catastrophe is already upon us."   Paul Krugman and I agree that there is "too much gas" and that global GHG levels will continue to rise.

We disagree over whether we will experience a "catastrophe" as climate change plays out.  As I have written before, he appears to view us as the Titanic lulled into feeling safe while the iceberg floats and gets ready to cut us.   But thanks to "early warning" systems such as Krugman and Joe Romm and real life climate science research, we know increasingly more about what risks climate change will pose.  Such information allows us to make better plans at the household, firm and government level.  This is the "small ball" of adaptation.  The anticipation of danger creates opportunity and prudence in choices that shield ourselves from harm.

Now, I must admit that I am assuming that our climate scientists will converge on the "true model" of what risks climate change will pose. If their ongoing research leads them to diverge in their assessments and to make different predictions, then of course Joe the Plummer, Matt Kahn , and Homer Simpson will be confused and won't know what actions to take or how to cope.

Catastrophe occurs when we think there is a zero probability of a scenario taking place but in truth its likelihood is growing.  We cannot prepare for this.  Paul Krugman should write a column on what public goods he thinks need to invested in to protect us from climate change.  Increases in basic National Science Foundation research $ would go a long way in improving predictive models and investors and households would make better decisions armed with this information and this would ease the adaptation process.

People are afraid to discuss adaptation because they believe that even broaching the subject chills interest in carbon mitigation.  In his column today, Krugman is quite honest about the mitigation challenge but now he needs to take the next step  and join the adaptation discussion.  As a leading economist, he should step up and highlight how free market capitalism will evolve to help us cope with this challenge. How does he know that climate change will be a "catastrophe"?  If we anticipate that it will be a "catastrophe" and if we have 20 years to get ready, does this mean these fears will be realized?  In Climatopolis, I argue that the answer is "no".

Switching subjects, I hope to see you at this Brainstormgreen conference.  Look for me at 930am wednesday on the "Green China" program.