Toward a Political Economy of Climate Change
The following thoughts have been presented on October 10, 2020, at a broader public conference in Germany. The conference was intended to discuss environmental policies from a free market perspective. Although my research does not concern this field, I have always been interested in the general theory of interventionism and therefore agreed to comment on climate change policy. Sometimes the fresh look of an outsider can be helpful. If my remarks spur further thought on climate change policy, they will have fulfilled their purpose.
I have not written on anything related to environmentalism since the early 1990s. At the time, as a student at the Technical University of Berlin, I wrote an economics seminar paper that dealt with the problem of air pollution. How should one deal with this problem? What can and what should the state do? In those days I followed the then relatively new doctrine that the most effective countermeasure would be the introduction of an emissions exchange. Companies that pollute the air are supposed to buy “air pollution rights,” for example by purchasing CO2 emission rights on the environmental exchange. In this way, the polluter-pays principle would be satisfied, and the permissible total emissions could be capped by the state without the economy being tamed and paralyzed by an arbitrary planned economy.
Meanwhile my mind has moved to a different place, especially under the influence of the Austrian school, especially the writings of Murray Rothbard (“Law, Property Rights, and Air Pollution,” 1982), who like no other before him dissected and criticized the typical justifications of state interventions, also in the area of environmental policy. In addition to Rothbard, George Reisman deserves special mention. In numerous writings—especially in his magnum opus, Capitalism (1996)—he has targeted interventionist environmental policy and criticized it very thoroughly. In the same vein, I should also like to mention Walter Block, Bob Murphy, Timothy Terrell, Bill Anderson, Roy Cordato, Edwin Dolan, Jonathan Newman, among the Austrian economists.
Now it is true that the Austrians do not have a monopoly on good ideas and convincing arguments. On the topic of environmental protection and climate policy, in particular, there are a number of good contributions that supplement, correct, and continue the arguments of the Austrians mentioned. Terry Anderson and Richard Stroup come to my mind, but in particular the statistician Björn Lomborg from the Copenhagen Business School, who more than any other living author has made the economic problems of climate policy understandable to a broad audience. His most recent book (2020) has the programmatic title False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet. The following pages must be understood in this intellectual context. My objective is to make the economic criticism of interventionist climate change policies clear and understandable.
Interventionist climate change policies have found eminent champions in the German climatologists Stefan Rahmstorf and Hans Joachim Schellnhuber from the University of Potsdam. Their book Der Klimawandel ( 2019) has sold over 1 million copies and has become the standard text in the field. Therefore, in what follows I shall use this book as a red thread for my arguments.1
I will first present a few general reflections on the relationship between climate science and climate activism on the one hand, and the sciences that traditionally deal with policy issues—political philosophy, law, and economics—on the other hand. Then I present the position of the climate activists on the basis of the Rahmstorf and Schellnhuber book just mentioned. This will be followed by a discussion of the consequences that are likely to result from hypothetical global warming. Finally, I will discuss the issue of appropriate climate change policy.
CLIMATE ACTIVISM, CLIMATE PROPAGANDA, AND ECONOMICS
Like many other interested laypeople, I have followed with some interest the debates between natural scientists and engineers on global warming. After all, there is an engineer slumbering deep in my breast. But it has not escaped my attention that all such debates inevitably end up in the cage of political philosophy, jurisprudence, and political economy as soon as, and to the extent that, they deal with concrete recommendations for action.
In other words: as long as physicists, geologists, chemists, meteorologists, and climatologists limit themselves to exploring the facts and causal relationships of our environment, they steer clear of philosophers, lawyers, and economists. But as soon as they leave the fields of the natural sciences and set out to give other people recommendations for action—especially for political action—they willy-nilly cross over into the territory of philosophers, lawyers, and economists.
This is of particular importance for climate policy. Indeed, many of the leading climatologists are also very active politically. In Germany, the aforementioned professors Rahmstorf and Schellnhuber (subsequently abbreviated as RS) do not only spend their time on climate research, but also play a key role in shaping climate policy. They are wearing two hats, so to speak. As climate researchers they are scientists; as climate politicians they are activists.
The connection of theory and practice, the fusion of expert and adviser is generally not worrying, but rather desirable. Everyone will want to hear well-intentioned advice from experts.2 It is also only logical if doctors advise against alcohol and nicotine consumption or even make the case for legal restrictions (even if they themselves indulge in these intoxicants). Nor is it surprising when auto mechanics recommend regular checks of the brakes, oil level, and tire pressure. Their job entails or at least suggests a certain set of preferences. And in many cases, almost everyone willingly lets the experts provide guidance and execution. One is only too happy to leave them certain practical decisions if one does not feel directly affected and does not really know the situation. This is why so few citizens are interested in public administration reform.
But where these prerequisites are not met, the situation is quite different. In your own house and with your own body, you do not allow the professionals to do whatever they want. The plumber should lay the pipes in my house where I want them, according to my personal needs and aesthetic preferences, and not just where the pipes best fit “from a purely technical point of view” (whatever that might mean). The surgeon should by no means cut my flesh as it suits him or seems right, but according to the specifications of my will. He may consider that, unless my liver gets surgery right away, I will die soon. But I myself want to choose between a shorter life without surgery and a longer life with all the consequences the surgery entails. The virologist tells me that I will catch the flu if I go to university or attend a conference without breathing protection. But I want to determine for myself whether the thing is worth the risk to me.
Climate policy has long been a playground for scientific experts and for advocates of a radical interventionist climate policy, because most citizens—just like most economists—did not take the whole thing seriously. Most people did not feel directly affected and also felt little desire to make their minds up on these complex questions. The advocates of a drastic state climate policy have put this time to good use.
In the 1990s and 2000s, climate activists have succeeded in spreading, not only their scientific knowledge, but also their political preferences and their political prejudices through busy work in the media, in government committees, and in public administrations (especially school boards). They have also benefited from close cooperation with like-minded people across the world. The fruits of this hard work are paying off today, as public opinion in Germany and many other countries is completely under the impression of this propaganda.
The word propaganda, which has just been dropped, is not unseemly in the circumstances. Activism is always in danger of turning into propaganda. The aforementioned book Der Klimawandel shows that this danger looms even in the writings of established academics. In the first seventy-two pages of their short text, RS describe climate history, global warming today, as well as the likely consequences of climate change. This is followed by a 56-page plea for strongly interventionist solutions to the climate problem. So far so good. But closer inspection reveals several troubling borderlines with propaganda. Propaganda is the manipulative representation of a fact or a problem. Propaganda does not even try to enable the readers to form their own judgment. Propaganda aims to systematically hide or deny all other points of view so that only one point of view can appear correct or relevant.
In a famous essay, John Stuart Mill once argued that the best and most effective line of argument is to first put the opposite position into the best light it can be put. The opponent should appear in full armor before one dissects his weak points.
Regrettably, there is little of this approach to be found in Der Klimawandel, especially with regard to the purely scientific context. Nowhere are objections factually presented and refuted. RS explain their peculiar approach in chapter 4, where they discuss “Climate change in the public discussion” and emphasize that there is an overwhelming scientific consensus on the anthropogenic causes of climate change. Seen in this light, the supposedly balanced representation of climate science in the media is very worrying and annoying. The media pay undue attention to the counterarguments, which, given the unanimous view of the experts, do not deserve them. Journalistic balance is completely out of place here. RS surmise that such misplaced balance goes back to “targeted disinformation campaigns that are financed by parts of the industry” (p. 81). The authors surely do not fall prey to this mistake, if it is one. They repeatedly reference various writings and sources of information, but they themselves do not even make the slightest attempt to make any opposing positions understandable.
Furthermore, as they seem to have it, there is no such thing as a decent or honest person who advocates any counterarguments to their own. Anyone who thinks differently than RS about climate and global warming is a “climate denier”—a dreadful criminal, like a Holocaust denier—or he is a lobbyist or a Trump voter. In a word: those who think differently are not refuted by RS, but mocked, insulted and vilified. The authors patently want to leave the reader with the impression that only one point of view—theirs—is morally defensible.
Anyhow, how should their policy argumentation be classified and
Article from Mises Wire