Monday, August 21, 2006

Sunstein and global warming continued

My last post noted that Cass Sunstein's Washington Post article, "Limiting Climate Change: The Neglected Obstacle," correctly identified one of the key problems to devising an international solution to global climate change, but failed to offer any practical solutions. The correctly-identified problem is that the two largest emitters of greenhouse gases (China and the United States) will have the bear the brunt of any international effort to reduce the threat of global warming, but they are also among the least likely to be adversely affected by global climate change. The two solutions the professor offers are (1) convincing China and the United States that they have a moral obligation to incur a tremendous cost on themselves to protect India and Africa, and (2) convincing them that drastically reducing carbon emissions will not be nearly as expensive as all current estimates would lead us to believe. I noted that even under the best circumstances, these proposals likely would be non-starters. However, these solutions are even more likely doomed to failure because the PRC and the U.S. are geopolitical adversaries and economic growth is a currency for international power. Consequently, if international power dynamics are zero-sum in nature (as many international relations theorists suggest), unilaterally neither China nor the United States would be willing to do anything likely to damage their economic growth since that would leave the other in a comparatively better position.

But then what is a solution? The problem here is aggravated by the anarchic nature of the international environment. Domestic politics, of all types and under all political regimes, has a single common characteristic, and that is the police. Laws can be enforced. Who makes the laws varies considerably, but all societies have some mechanism to deal with enforcement. International relations, by contrast, have no such mechanism. At the end of the day, all agreements must be self-enforcing (i.e., you do this, and I will do that; if you don't do this, I won't do that). It is, as John Mearsheimer (another University of Chicago professor) might say, a "self-help environment."

Perhaps a third University of Chicago professor, Ronald Coase, has something to offer in this regard. (I'm not paid by the University of Chicago, by the way--though I should be.) The Coase Theorem (which led to Coase winning the 1991 Nobel Prize for economics) states that, as long as property rights exist and in the absence of transaction costs, it does not matter how those property rights are allocated because actors will bargain with each other to correct any externalities. (This is my understanding, of course, and I could be wrong. I'm not an economist, or even particularly bright...) What would such a bargain look like? One obvious solution would be for India, Africa and other countries to pay China and the United States to comply with the Kyoto Protocol, and to link these payments to some kind of oversight and enforcement mechanism, to dissuade cheating. Politically, though, I suspect this solution is as feasible as Professor Sunstein's (in other words, not at all). Poor countries paying rich countries not to create externalities may make economic sense, but all those whiny liberal types are likely to complain on moral grounds. Even aside from that, though, I doubt the poorer countries most likely to be hurt by global climate change have sufficient resources to pay China and the United States enough to make their sacrifices worth it.

Nonetheless, whatever solution is out there will need to take into consideration geopolitics. Any economic harm resulting from cuts in greenhouse gas emissions will need to take proportionality into account. The changes should not leave any powerful country proportionately worse off vis-a-vis any other powerful country. Absolute economic costs are not nearly as important as relative costs. Furthermore, mechanisms to prevent cheating must be in place, or powerful countries will suspect that potential adversaries will use the Kyoto Protocols (or whatever replaces it) as a way to gain an economic (and, from there, a geopolitical) advantage.

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