The WA Post: No doomsday

https://www.washingtonpost.com/opinions/dont-fall-for-the-doomsday-predictions/2019/01/08/46a4ced2-1361-11e9-b6ad-9cfd62dbb0a8_story.html?utm_term=.7a420d09ab3a

Free markets, free trade, and the Rule of Law have brought us abundance, in spite of government.

6 thoughts on “The WA Post: No doomsday

  1. I have to admit I was surprised to see you post an article that mentions Romer’s thought on a carbon tax. And I have always had great faith in the ability of the most powerful thing on earth (the human mind) to pull us through. Doomsday predictions are typically over-done, but do serve as an alert that draws focus to potential negative outcomes.

    The great thing about competition and free markets are the incentive they provide to find better (and more profitable) ways to do everything. We are actually increasing at an increasing rate in our ability to leverage shared knowledge, increased computing power, and artificial intelligence to solve problems and innovate.

    While I have great faith in us clever little monkeys I think it’s prudent to keep in mind that it is race, or contest if you will, with the winner (us or extinction) yet to be determined.

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  2. If I only posted perfect articles, there wouldn’t be much here. A carbon tax that applied to all nations and which accurately reflected the true external costs and benefits of CO2 would be a way to resolve externalities. But I have no idea how such an arrangement could be implemented.

    Keep in mind that agriculture has benefited from higher CO2 levels in many ways, it isl likely that the current world population could not be fed if CO2 returned to pre-industrial levels.

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  3. Doomsday scenarios were mostly from a supply side view. That is, we would run out of food and resources to keep us alive.

    As we progress in science and data I think supply is not necessarily the most relevant issue but rather environmental impact. The impact of ensuring the resources for supporting an ever growing population.

    Some may consider the human brain to be an infinite resource over time. However, the planet earth is finite in size. Finite in both provision and waste disposal.

    Loading our oceans with fossil fuel waste in the form of insoluble plastics while stripping natural fisheries affects both supply and the environment. Similar problems are created by clear cutting rain forests for often short term gains in food production.

    For a billion or more years resource management for both supply and waste was accomplished by an evolving natural recycling system that was both very delicate and flexible. We have upset that in a myriad of ways to ensure our survival and well being. Nothing wrong with making life less “brutish and short”. But we should pay more attention to our only place in the universe.

    Abundance is not just a solution, it is also our problem.

    IMHO

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  4. RE: “Romer points us to the tremendous potential of a tax on carbon as the best available weapon against climate change.”

    I’ve heard of Romer. He and his wife famously published a paper some years ago showing that Keynesian multipliers don’t exist or are very small.

    The paper was good economics, but a carbon tax is not.

    Most economists will tell you that if you want less of something, tax it. You’ll get less. With global warming, however, an insightful economist would argue a little more carefully: Every tax causes devaluation of the currency; it makes little sense to create devaluation as a means to limit global warming.

    For one thing, it is unclear in the science whether reducing CO2 is the necessary or sufficient mechanism for cooling the planet. Compared to other greenhouse gasses, especially water vapor, CO2’s role as a warming agent appears to be relatively minor.

    For another, if cooling the planet is the primary physical objective, there are simpler, more feasible, less risky methods. It would be easier to reduce the amount of sunlight warming the Earth, for example.

    One estimate I’ve seen claims a mere 1% reduction in total sunlight would reverse global warming almost immediately. Various technologies are available to do it. We could build a parasol in space, for example.

    But while feasible, creating various sun shades would be, in pure economic terms, a passive, non-productive measure. Much like military defense spending.

    The best option is one that is active and productive economically: We can equip ourselves with an unlimited supply of energy. Doing so would make the human race in its entirety unimaginably wealthy and thus capable of solving not just the global warming problem, but many others as well.

    There are several technologies with the potential to support this best approach. My favorite is space-based solar power, but scientists and entrepreneurs are also developing Tesla towers and fusion reactors, among some of the more glamorous projects.

    The point is that carbon taxes don’t make sense economically. You might use the revenue to fund a solution to the global warming puzzle, but why limit ourselves and the potential for success in such a way?

    If asked, an economist like Romer would tell you that an infrastructure project like space-based solar power can be funded without risk merely by printing the money at the Treasury. Why? Because, once built, the value of the dollars spent into circulation becomes represented by the project itself and its productive benefits.

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    1. “why limit ourselves and the potential for success in such a way?”

      Because it may have a hand in our survival.
      I don’t ascribe to the Gordon Geeko economic model.

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      1. RE: “Because it may have a hand in our survival.”

        I meant by raising taxes to fund the solution. One of the few legitimate reasons for printing money out of thin air is to pay for real assets like infrastructure.

        Besides, as noted, a carbon tax works mainly by disincentivising CO2 production, but reducing CO2 is not the most practical way to cool the planet.

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