It's too bad this is blowing up on a Friday, because it has the potential to be a really fun discussion. Over at Common Tragedies, Rich Sweeney writes:
All of us at CT don’t even know how to begin to respond to [this post from Joe Romm at Climate Progress]:
Seriously, Dr. Stavins, just because you haven’t figured out how to walk and chew gum at the same time, doesn’t mean nobody else can.
I’m hoping that Environmental Econ can help clarify Stavins’ point in a simple (and funny) manner. I can think of few people who have done more to advance environmental regulation than Rob Stavins, and find the whole post infuriating.
John, while making a valiant effort at simplicity, missed the funny. So now it's my turn...
Joe summarizes Rob's argument as follows:
In short, whatever we do to address climate must not attempt to create jobs. And whatever we do to create jobs should make no effort whatsoever to get off our self-destructively unsustainable economic path. That would not be a Pareto optimum, I guess.
Seriously, Dr. Stavins, just because you haven’t figured out how to walk and chew gum at the same time, doesn’t mean nobody else can.
WRONG. At the risk of putting my words in Rob's mouth (and I have no intention of doing so because that would significantly decrease Rob's intelligence), the point is not that we shouldn't try to meet both goals--good dinner and good shower--but rather, the policy of addressing both at once is STUPID. Determining the best way to make dinner in the shower will result in a bad shower and bad dinner (both outcomes will be suboptimal). There are better ways to reach both goals.
Targeting climate change under the mask of stimulus policy may result in suboptimal stimulus, and targeting stimulus under the mask of climate policy may result in suboptimal climate outcomes.
The critics of Stavin's argument seem to be arguing that the only acceptable way to stimulate the economy is by addressing climate change. The irony is that their own recommendations may very well be counter to their ultimate goal. Good intentions--unintented consequences. That (I think) was Stavin's point. A soggy dinner indeed.
OK, that wasn't very funny either.
And as for Romm's warning...
All kidding aside, I think the economics profession’s misunderstanding of climate science and its misapplication of cost-benefit analysis are among the single biggest impediments to serious and intelligent efforts to avoid humanity’s self-destruction. I will lay that out in future posts.
...I say bring it on...John's got my back. Right John? Ummm...John?
