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November 10, 2012 9:31 AM Climate Change Will Blow Up the Deficit

By Ryan Cooper

One point that remains little-understood about climate change is that it isn’t a traditional environmental issue, where we preserve some bit of nature for the sake of its beauty (with possible tourism side benefits). Even from the most soulless possible economist position, the case for action is ironclad. Climate change is the mother of all unpriced externalities, which Hurricane Sandy (unquestionably strengthened by climate change) made especially clear. Burning all this carbon is raising the sea level, making storms more powerful, creating persistent drought (which still afflicts nearly 60 percent of the lower 48), and much else, all of which is terrifically expensive.

The estimated costs for Hurricane Sandy are on the order of $50 billion. That money is stolen. Coal and oil companies, anyone who sells carbon or burns carbon and profits by it is creating a mess for which they do not have to pay. Even Friedrich von Hayek supported government regulation in that kind of situation. If I build an iPad factory, and as a byproduct of the manufacturing process it creates mountains of dog poop which I dump in my neighbor’s yard, the free market position is clearly that the state must force me to internalize the cost of that poop. It’s a simple point, but one that isn’t widely understood, especially by the national press.

Yesterday David Dayen made the related point that the same logic applies to the federal budget and the national debt:

Spending on sustainable programs like Social Security matters much less to that budget picture in 2040 than the impact of catastrophic climate change. Hurricane Sandy is projected to cost $50 billion. Imagine one or more of those types of weather events every year, in the midst of rising oceans that will only make the impact greater. Imagine the cost of resource wars as water becomes less potable and drought conditions magnify, destroying crops and making the basic human act of feeding ourselves less secure. The costs of unmitigated climate change are almost incalculable.

Exactly. Few things could be more expensive than having to replace our nation’s entire stock of capital goods, or having to build a seawall around every coastal city, or having all our farmers go bankrupt because the US heartland becomes a windswept desert.

There are of course many other, much better arguments for action on climate change, like for example that billions of people will die if we don’t do something. The point, though, is even if we adopt the morally bankrupt and quite frankly idiotic focus on the national debt über alles of the Pete Peterson/B-S commission crowd, the case for action remains ironclad.

@ryanlcooper

Ryan Cooper is a National Correspondent at The Week, and a former web editor of the Washington Monthly. Find him on Twitter: @ryanlcooper

Comments

  • SecularAnimist on November 10, 2012 10:50 AM:

    Ryan Cooper wrote: "... having all our farmers go bankrupt because the US heartland becomes a windswept desert."

    Having all our farmers go bankrupt?

    How about having everyone in America starve?

    It's one thing to go to the grocery store and find that bread costs $10 a loaf.

    It's another thing to go the grocery store and find that there is no bread.

    And it's another thing to realize that there will never be any more bread, ever again.

    That's when the Koch Brothers start grinding up the rest of us into Soylent Green.

  • c u n d gulag on November 10, 2012 10:52 AM:

    Let's put this in a more positive light:
    Think of global climate change as a perpetual economic stimulus package!

    We'll have more and more people working on rebuilding the existing infrastructure, and building new things, like elevated farms, cities, subways (can they still be calles "sub"ways, since they'll be 'over'ways, or 'air'ways?), roadways, cemetaries, and new dams, levees, dikes, etc.

    See?
    Half-FULL!!

  • PTate in MN on November 10, 2012 11:09 AM:

    "The estimated costs for Hurricane Sandy are on the order of $50 billion. That money is stolen. Coal and oil companies, anyone who sells carbon or burns carbon and profits by it is creating a mess for which they do not have to pay."

    Ryan, this may be your best post ever. This point both explains why the coal and oil industry are fighting tooth and nail to deny any responsibility for global warming AND provides one solution. And that solution is definitely not "drill, baby, drill!"

  • Gary on November 10, 2012 11:25 AM:

    What is the MSM?

  • Robert from upstate on November 10, 2012 11:37 AM:

    @ "Gary",

    I think your question should be : "Where is the MSM?"

    As has been well covered here, the Main Stream Media (A/K/A the Lame Stream Media) have done a loathsome job of covering the Climate Change issue.

  • dalloway on November 10, 2012 11:53 AM:

    When your right-wing friends deny climate change, ask them this: (1) Do you buy insurance policies for catastrophes that might never happen? (2) If those who believe climate change is real are wrong, what's the result? That we've spent some money we didn't have to on that insurance policy, ie. efforts to reverse it. If those who deny climate change are wrong, it may well mean the end of the human race.

    BUY THE DAMN INSURANCE POLICY!

  • Dr Lemming on November 10, 2012 12:08 PM:

    Thank you, Ryan, for an important post. I don't expect anything useful on climate change to get through Congress over the next two years, but at least Obama COULD exercise his administrative power. And now that he's safely reelected he could elevate this issue.

    Stimulus funds have done some great stuff out in the states, so it is too bad we can't pass another round. What is most likely to gain traction are legislative "compromises" on so-called clean coal (which isn't really) and nuclear energy. Both bad moves.

    The focus needs to be to retake the House -- and hold the Senate -- in 2014 with a green jobs agenda.

  • Citizen Alan on November 10, 2012 1:15 PM:

    Don't worry, Secular Animist. We are still a wealthy nation and will be able to buy food from many Third World nations for some time yet, thereby making the poor people in those countries dies for our sins. There are already countries which are suffering from mass starvation because American agribusiness buys up all their grain to feed to COWS because we think they taste delicious when flame-broiled.

  • mudwall jackson on November 10, 2012 3:02 PM:

    "One point that remains little-understood about climate change is that it isn’t a traditional environmental issue, where we preserve some bit of nature for the sake of its beauty (with possible tourism side benefits)."

    huh?

    i always thought that traditional environmental issues, such as clean air and clean water, were a little more fundamental than that. sort of essential to life. i guess i'm wrong.

  • Neildsmith on November 10, 2012 4:19 PM:

    "The estimated costs for Hurricane Sandy are on the order of $50 billion. That money is stolen. Coal and oil companies, anyone who sells carbon or burns carbon and profits by it is creating a mess for which they do not have to pay."

    Well... you lost me there. I drive my car to work every day. Sometimes I make two trips to the grocery store in the same day. I heat my apartment in winter and cool it in summer. I stole that money and the people who have suffered damage from the storm stole that money too. This is just silly. No one is willing to sacrifice to the extent necessary to stop climate change. It's too late anyway. Carpe diem, my friends.

    If you really care about climate change, don't have kids.

  • Rick B on November 10, 2012 5:27 PM:

    "Climate change is the mother of all unpriced externalities ... The estimated costs for Hurricane Sandy are on the order of $50 billion. That money is stolen."

    Ryan, that needs to be repeated again and again.

    Last year's drought - thought to be a result of climate change - just in Texas cost nearly $8 billion. Also in 2011 the oil companies made $90 billion in profits.

    @Neildsmith
    Those "profits" by carbon producers are actually the result of the coal and oil company not including the full cost of providing your fuel to you. It's like the paper plant in east Texas up river from where I grew up. They disposed of the waste products from paper production by dumping them into our river. The river we dead, destroying the fishing industry, and the water had to be very highly processed for the towns down river to use it. They were diverting my property taxes to their bottom line profits. When EPA stopped them it cost them more to produce paper, but the recovery of sports fishing indutsry alone more than made up the cost.

    The sea and the atmosphere are now being polluted so that the coal and oil producers can book very high profits.

    That's not over-population. That's simple theft by the producers.

  • Neildsmith on November 11, 2012 7:52 AM:

    @Rick B
    I get that we all think we can affect behavior by implementing some sort of regulation or tax that prices in all the externalities. Maybe that would have worked in 1950 to prevent suburban sprawl, long commutes and large single family homes. I suspect it won't work today. Oil prices went from less than $20 in 1998 to over $140 in 2008. That spike changed behavior, but we still consume way too much oil. It may have even helped make the recession worse. I can't imagine what sort of price spikes would be required to change behavior again. You can, after all, still buy an SUV today.

    I have no problem with any of these ideas, but I'm not convinced they will work either. Fewer people and less economic activity can stop carbon emissions from increasing. I think it is a fantasy to believe we can tax or innovate our way out of this problem, but by all means - please give it a shot.

  • jhm on November 11, 2012 8:09 AM:

    The really infuriating part of listening to so-called arguments against counteracting AGW is that the things we should be doing would be worth doing (even in a strictly pecuniary sense) even if AGW were a hoax. The cost in increased health costs rising directly from carbon fuel burning would go a long way toward making it's reduction pay for itself.

  • Dredd on November 11, 2012 1:15 PM:

    "Climate change is the mother of all unpriced externalities, which Hurricane Sandy (unquestionably strengthened by climate change) made especially clear."

    All weather events, local or remote, are part of the global climate system so that asking that type question has become an irrelevant question and/or assertion.

    When any system is damaged, all systemic events within it are part of that damaged system.

    Thus, all we need to know about any weather event now is that it is part of a damaged system which is currently a dysfunctional system.

  • Dave Thomas on November 13, 2012 3:01 AM:

    How can anyone realistically call for the United States to do anything on climate change when non-US use of coal last year in 2011 grew at a rate equal to the entire world's supply of solar, wind, and bio-mass. That's right, in one year coal use for power outside the United States increased in a amount of all wind, solar, and bio-mass combined.

    China and India are the main users. Do declare nuclear war? We better quit committing economic suicide and realize that humanity is not united on this issue and is not going to unite. We should put our money into dealing with global warming's effects because global warming can't be stopped given the makeup of the globe.

    It is suicidal idealism to do anything else.

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