Articles by Sean Casten

Economic naïvete on carbon prices

If you put a price on GHG emissions, will it raise the cost of energy?

That question goes to the core of carbon policy. Unfortunately, many people inside and outside the environmental community consistently get it wrong, with potentially disastrous results.

Consider: if the answer is yes, then we don't need any incentives for GHG reduction. The costs of carbon-intensive energy will rise, giving we energy users the incentive they need to lower consumption.

But if the answer is no, we will find ourselves with a tax on dirty energy but no incentive to reduce its use. That is, we will end up with a greenhouse-gas policy that fails to do the one thing it's supposed to do above all else: lower our greenhouse-gas emissions.

The answer, more often than not, is no.

Lieberman Warner criticism, Part 3

This is the third in a five-part series exploring the details of the Lieberman-Warner Climate Security Act. See also part 1 and part 2.

Let's do a thought experiment. Imagine that tomorrow morning, you wake up, reach in your pocket, and find that you suddenly have billions of dollars of cash. Before you have a moment to celebrate, you also realize that you are lying in the middle of an interstate, and there is a big truck coming. What do you do?

(a) Issue an RFP for research, development, and deployment of technologies that will help you get off the highway;

(b) Issue an RFP for research, development, and deployment of crash-retardant pajamas;

(c) Invest in wildlife conservation measures to protect the flora and fauna on the side of the highway that are about to be covered in blood, guts, and twisted metal;

(d) Set aside money for truck driver grief counseling, or;

(e) All of the above.

If you chose (e), read no farther. You have identified yourself as a person who thinks that the Lieberman-Warner approach to greenhouse-gas reduction is perfection incarnate. If, on the other hand, you think that there was a fairly important idea not even listed amongst the options above (hint: it has to do with getting your butt off the highway and/or stopping the truck), then you understand the flaws innate to the Lieberman-Warner approach.

(And if you chose a, b, c, or d ... you're one odd duck. But at least you've signaled your self-interest in high-tech solutions to simple problems!)

Lieberman-Warner criticism, Part 2

This is the second in a five-part series exploring the details of the Lieberman-Warner Climate Security Act. See part 1 here.

With atmospheric GHG concentrations rising at a frightening rate, we need a full court press to change directions, using every possible tool at our disposal. From an economic perspective, this means that we not only need to impose financial penalties on polluters, but also provide financial incentives for those who act to lower GHG emissions. We need a market mechanism in place so that the costs of GHG emission -- or the revenue associated with GHG reduction -- factors into individual investment decisions immediately. In short, we need big sticks and big carrots. The Climate Stabilization Act (CSA), as the Lieberman-Warner Bill is known, is a small stick with no carrot. This post explains why.

Lieberman-Warner criticism, Part 1

Lieberman-Warner is deeply flawed. And like most things political, it's most passionate defenders and opponents are insufferable.

It is sad but true that there is no such thing as perfect legislation, for the simple reason that the democratic process demands compromise. Therefore, to the extent that Lieberman-Warner is only imperfect to the degree that is demanded by our political process (e.g., if it's the best we can do, all considering), so be it.

It's not that good. And lest there be any confusion, I come to bury, not to praise. But that doesn't mean that we ought not have a more responsible discussion of the details of Lieberman-Warner and how they can be better framed. Because like it or not, this is the train upon which our national greenhouse gas policy will be framed. It may or may not leave the station prior to 2009 (I for one think it won't), but it's going to be the framework from which any future bill starts. And rather than expend our effort trying to derail that train, this is the time to be reviewing the cars. Keep the good ones, replace the bad ones (probably overhauling the engine in the process), but don't delude ourselves into thinking that we can throw the whole thing out, start fresh, and end up with perfection.

Here, then, is my attempt to try to dive into those details so that we can have a more enlightened debate.