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How to Save the Planet, at Minimal Expense

Paul Krugman: There is absolutely no reason to believe in a one-for-one link between real GDP and greenhouse gases.

Joe Romm, the physicist and editor of the Climate Progress blog, recently drew attention to the third slice of the latest report from the United Nations’ Intergovernmental Panel on Climate Change, about the costs of global mitigation, or reducing the sources of greenhouse gases.

The panel announced earlier this month that these costs aren’t that big – a few percent of gross domestic product, even by the end of the century, which means only a trivial hit to the growth rate.

At one level this shouldn’t be considered news. It has been apparent for quite a while that given the right incentives, countries could maintain economic growth even while greatly reducing greenhouse gas emissions. But there is, in fact, some news that greatly strengthens the case that saving the planet would be quite cheap.

First, a word about the general principle here. Actually, for once I get to play “balanced” journalist, and bash both left and right. There are some people on the left who keep insisting that economic growth is incompatible with reduced emissions, and that therefore we have to turn our backs on growth. Such people have no power and don’t do any real harm.

Still, it’s worth pointing out that they have a much too narrow notion of what it means to have a growing economy. It doesn’t necessarily mean more stuff! It could be better stuff, or more services – and there are also choices to be made in how we produce and distribute stuff.

There is absolutely no reason to believe in a one-for-one link between real G.D.P. and greenhouse gases.

As a practical matter, the fallacies of the right are much more important – indeed, they may destroy civilization. What’s notable about right-wing commentary on the economics of emission reduction is how people on that side suddenly seem to change their views about the effectiveness of markets. Normally they extol the magic of the marketplace, which can brush aside all limits. But somehow they simultaneously believe that markets would be totally unable to cope with a carbon tax. Scarce resources are no problem; limited rights to pollute would be catastrophic. It’s not hard to see the ulterior motives here, but it’s still peculiar.

In fact, we should be optimistic about the ability of a market economy to reduce emissions given incentives. And now we know something new: the technological prospects for a low-emission economy have gotten dramatically better. It’s kind of odd how little attention the media gives to the solar revolution, but this is really huge stuff.

In fact, it’s possible that solar will displace coal even without special incentives. But we can’t count on that. What we do know is that it’s no longer remotely true that we need to keep burning coal to satisfy demand for electricity. The way is open for a drastic reduction in emissions, at not very high cost.

And that should make us optimistic about the future, right? I mean, all that stands in our way is prejudice, ignorance and vested interests.

Oh, wait.

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