Tuesday, July 14, 2009

Comments on Applebaum's Column: "Green Futillity"

Anne Applebaum has a column in today's Washington Post about the futility of climate-change summits. Certainly, her op-ed was the better thought-out of the two energy and climate change-related pieces on the page. (Sarah Palin wrote the other one)

She's correct in saying "I doubt the wisdom of assuming that eight or 10 politicians will ever solve this problem during a meeting in a conference center."

She is also correct to identify that the problem we should be working to solve is finding a way to make renewable power most cost effective than fossil fuels. The collapse in energy prices over the last year has significantly undercut the renewable power industry – and that has only been partially offset by stimulus funding. She also correctly identifies that the solution to that problem is for politicians to increase the relative cost of fossil fuels; she suggests a tax, but a cap and trade is another method.

However, she overlooks the utility of an international treaty in creating the conditions for politicians to increase the price of fossil fuels. It is very difficult for any politician to vote to raise the price of fuel or electricity. That is part of the reason why ‘cap and trade’ has gotten more political traction: though it is economically equivalent to a carbon tax, it more effectively hides the price increases from the voter. Even modeled as a cap and trade, however, legislation is the Senate faces a very stiff test. Here is where I think an internationally negotiated, binding treaty could be effective: it will give political cover to politicians who would like to vote for it, know that it is important for the country and the world, but are afraid of their constituents (who can be very short-sighted). We often see such a sentiment in international trade policy. The fact that the WTO exists gives political cover to politicians who would otherwise be pushed to support protectionist measures. For instance, the Byrd Amendment (which gave the proceeds of anti-dumping tariffs to the victim of the dumping) was only repealed in 2006 because it had been ruled WTO-illegal. An international agreement give politicians the cover (and someone to blame) to vote for an unpopular – but necessary – agenda.

Also, I think she's wrong about any treaty being unenforceable. Most nations will attempt meet their treaty obligations, because they believe it is in collective interest. Those that don’t will be punished and ostracized. Thomas Schelling explains it better than I can on the Atlantic, here.

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