Monday, June 09, 2014

Krugman on Carbon Mitigation, Self Interest and Ideology

Paul Krugman has written an interesting piece   He states; "So the real obstacle, as we try to confront global warming, is economic ideology reinforced by hostility to science."   I don't think this is right.  The real obstacle we face for why the U.S isn't taking the lead on this issue is sunk capital and suburbanization.  We are a nation of suburban voters.  Unlike his Manhattan fellow residents, most of us live and work in the suburbs where we use fossil fueled vehicles and live in large homes that use plenty of electricity which we expect that will be cheaply provided to allow us to use our home appliances and to run air conditioning to protect us from humid summer heat.  We want natural gas in the winter to heat and year round clean cooking.  Self interest guides why so many U.S suburban voters are not excited about carbon taxes.  Of course, Dr. Krugman is right that such carbon taxes would offer significant long term insurance benefits against the unknown costs of climate change. He is wrong to play down the costs that suburbanites will bear in the short run as we decarbonize the economy.     If all U.S citizens could trade in their fossil fuel vehicles at the purchase price and could be promised that their electricity prices would not rise, they would vote in favor of carbon taxes.  Self interest is an important determinant of public opinion.

In paper #1 below, we document that both ideology and self interest are determinants of support for low carbon policies.

Readers should read the following papers;

  1. Matthew J. Holian & Matthew E. Kahn, 2014. "Household Demand for Low Carbon Public Policies: Evidence from California," NBER Working Papers 19965, National Bureau of Economic Research, Inc.
  2. Matthew J. Holian & Matthew E. Kahn, 2013. "The Rise of the Low Carbon Consumer City," NBER Working Papers 18735, National Bureau of Economic Research, Inc.
  3. Michael I. Cragg & Yuyu Zhou & Kevin Gurney & Matthew E. Kahn, 2013. "Carbon Geography: The Political Economy Of Congressional Support For Legislation Intended To Mitigate Greenhouse Gas Production," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1640-1650, 04.
  4. Glaeser, Edward L. & Kahn, Matthew E., 2010. "The greenness of cities: Carbon dioxide emissions and urban development," Journal of Urban Economics, Elsevier, vol. 67(3), pages 404-418, May.
    • Siqi Zheng & Rui Wang & Edward L. Glaeser & Matthew E. Kahn, 2011. "The greenness of China: household carbon dioxide emissions and urban development," Journal of Economic Geography, Oxford University Press, vol. 11(5), pages 761-792, September.