The free market solution for climate changeIn my last post, I discussed how free market advocates are criticized for being too theoretical, too simplistic, and/or not very helpful in the policy debate. Yet the beauty of free market principles is that they can cut through the regulatory maze to show people a glimpse of what the world might look like in a freer society. Here is one such picture in the context of global warming:
The science is far from clear about whether global climate change is man-made or a naturally occurring phenomenon. But the cost of Kyoto-style controls on CO2 emissions is very clear – $10 trillion or more worldwide over the next 100 years. Instead of taking this approach, why not follow the lead of U.S. industry, which is already making more headway on reducing the growth in CO2 emissions than are Kyoto signatory nations. How? Through innovations in reducing their “carbon footprint” funded by calculations of profitability given the public’s concern over global warming.
Coastal flooding from global warming-induced sea level rise may cause major damage along the U.S. coast. And while the U.S. could and should deal with this in the future by putting its engineering and construction skills to work, we could reduce the costs of these measures by getting federal and state governments out of the business of subsidizing flood and windstorm insurance today. These subsidies are greatly responsible for the “over-building” along our coasts today. Removing them would reduce development along the coast and reduce damage of any coastal flooding brought about by future sea level rise, while reducing the multi-billion price tag taxpayers are facing when the next big hurricane strikes the coast.
Finally, we should eliminate the mandates for ethanol, wind energy, and the boutique fuels that are greatly contributing to higher food and energy costs. We’ve already seen that the market provides a less expensive path toward reducing CO2 emissions. And we don’t have to worry about pollution: air quality is better than it has been in decades, and is guaranteed to improve under existing air quality rules – to which boutique fuels contribute very little, if anything. The societal savings from this could then be applied to global warming mitigation as needed.
These are practical, real world solutions to addressing public concerns about global warming; solutions that offer a much less expensive approach than the cap-and-trade controls being discussed in Washington. Yes, they will be derided and called simplistic. And they’ll be outside the constraints set by regulatory and Wall Street players who are seeking to profit through the command-and-control approach. But they are solutions that will work, given a chance.
– Bill Peacock