Climate policy, economics, and ethics

The debate about climate policy has gotten way off base. For every article discussing the scientific consensus, there are countless others in which people come up with a range of counter arguments. This is similar to the anti-vaccination movement. For the “anti-vaxxers”, it simply does not matter that there is enormous scientific evidence that the benefits of vaccination far outweigh the risks. Similarly, no amount of scientific research will convince the deniers that human-induced climate change is a serious risk that must be addressed.

To have a sensible discussion about climate policy, we have to start by acknowledging that there are uncertainties in the science and there always will be. There will be those, both with and without expertise, who continue to debate the science. However, and here is my most crucial point, the ongoing debate should not derail the formulation of policy. Policy is often made on the basis of human rights and fairness and this can be the foundation for climate policy, given current uncertainty in the science.

Let’s consider some precedents. Slavery was an economically profitable business. Societies have banned slavery because its practice runs counter to ethical and religious beliefs. Similarly, most societies have rules banning usury, the lending of money at exorbitant rates of interest. Again, this is a profitable business but we consider usury to be unacceptable and regulate lending. In both of these cases, there are profitable opportunities that we have deemed to be unethical. The policies banning slavery and usury start from the premise that a good society should not allow the exploitation of people who have no recourse. It is on these types of arguments that climate policy must start. Policies to mitigate the impact of human activity on the environment will have economic costs, just as banning slavery or usury has an economic cost. Nobody argues that slavery should be legal because there are up-front economic costs to ending slavery and we don’t know if there will be an economic payoff. With regard to usury, people do argue the issues back and forth but they are really not about economics–the issues revolve around ethics.

If we were to frame the regulation of greenhouse gases in a manner similar to policies involving usury, slavery, or other ethically-driven regulations, what would this look like? First, we must define the ethical position. Here is the way that I would put it. Human activity is markedly altering the global biosphere and we don’t really understand the long-term impacts, although the science suggests that the impacts could be very bad. It is unethical to make these kinds of changes because they have the potential to degrade the quality of life and impose a substantial burden on future generations. Perhaps the long-term impacts will be mild, but we do not have the right to take this risk when future generations will bear the cost. There will be those who disagree with the statement above, just as there are those who argue that lenders should be able to charge whatever they can, thereby legitimizing usury.

We need to re-frame climate and economic policy and acknowledge that the uncertainty in the science actually makes regulation more important rather than less. It should be intolerable for current generations to make decisions that are profitable for themselves but potentially impose huge costs on future generations. Even from a purely economic standpoint, this seems obvious. There will be costs to regulating greenhouse gases and the ultimate economic outcomes are uncertain. The same arguments can be made for banning slavery and usury but these have not blocked the implementation of policy.