Freakonomics gloats "Worldwide Carbon Emissions No Longer Dropping — Is Anyone Surprised?":
In our SuperFreakonomics chapter about global warming, a central argument was that greenhouse-gas emissions (and pollution in general) are an externality, and it is inherently difficult to control and/or price externalities. So, while it might seem sensible to encourage fewer emissions by taxation or price controls — or international agreements — the reality is complicated:
Besides the obvious obstacles — like determining the right size of the tax and getting someone to collect it — there’s the fact that greenhouse gases do not adhere to national boundaries. The earth’s atmosphere is in constant, complex motion, which means that your emissions become mine and mine yours. Thus, global warming.
If, say, Australia decided overnight to eliminate its carbon emissions, that fine nation wouldn’t enjoy the benefits of its costly and painful behavior unless everyone else joined in. Nor does one nation have the right to tell another what to do. The United States has in recent years sporadically attempted to lower its emissions. But when it leans on China or India to do the same, those countries can hardly be blamed for saying, Hey, you got to free-ride your way to industrial superpowerdom, so why shouldn’t we?
Look, there is nothing freaky about pointing out the negative externality and public goods problem. Millions of undergraduates are introduced to this every semester. An increase in emissions is not surprising either, but, the logical conclusion to this observation is not that climate policy is nonsensible.
This what I said* when I read the climate change chapter in SuperFreakonomics:
What bothers me most is the omission of a discussion of government policy that might be effective in reducing CO2. The strawman policy that is considered is voluntary behavior, encouraged by Al Gore's moral suasion. They argue that it won't work because physicians don't wash their hands often enough even though they know that it is in the best interests of patients. Environmental economists have long known that moral suasion is not effective in achieving the optimal amount of pollution reductions. So, while demonizing physicians makes for a nice story, I don't think it helps us understand climate policy.
Where do Levitt and Dubner stand on carbon taxes vs cap-and-trade? We don't know because those words are not mentioned. Where do they stand on Waxman-Markey? We don't know. Where do they stand on command-and-control vs economic incentives? We don't know.
The SuperFreakonomics solution to climate change was geoengineering, without the empirical evidence of the positive economics that most of Freakonomics is based on, ... and, implicitly, throw-your-hands-in-the-air adaptation.
Just as a reminder: I gave SuperFreakonomics a mostly positive review.
*Note: The Stand-Up Economist didn't like the climate change chapter either.
