Can Global Warming Be Solved Through Regulation or Free Market?

[torquerotates]

There are those that posit that global warming can only be tamed via government regulations. On the other hand you have people saying that it can be tamed through free market economics. What do you guys think?

 

[vanesch]

This is actually a question of the feedback of systems with a long delay. In system control theory, systems which have a long delay in them (between corrective action and output) are difficult to control through feedback, but are controllable through "feedforward".

For information: feedback is a general technique where the output of a system is sampled, compared to a desired output, and a corrective input is given which should give a change in output in the opposite direction as the measured distance. The whole theory of feedback is about how to determine the amount and timing of this corrective action.

A simple example is the linear proportional feedback loop.


Consider a system, which has an input, and an output. Imagine that the system is a strong amplifier. It means that even a small input that deviates from 0 will give a huge output.

Now, consider that we sample the output, divide the result by 10, and subtract this from the input signal before giving it to the system. This means that from the moment that the system input starts to deviate from 0, it starts to give a big output, but this output will (divided by 10) be fed negatively into the input, which would then make the output lower again strongly. One can show that the solution of the system equations is such, that the input of the system is near-zero, and hence the output is equal to about 10 times the input signal. Indeed, one will then subtract from the input signal one tenth of the output, or one tenth of ten times the input signal, which results in about 0.
If the input signal rises a bit, then this will make the system input go slightly positive, and the output signal will rise strongly, until the subtraction will again make the input to the system equal to about 0.

So in this case, if the system amplifies "enough" (without any specific nice properties), the feedback will entirely determine the response of the overall system.

But the problems start when the system has a delay: when the output doesn't change *immediately* as a result of the change of the input, but a bit later. Indeed, with an above type of feedback, one can get oscillations. When the output is too high, the feedback system gives back a negative input signal, but this doesn't change the output immediately. So the feedback system continues to give a negative input signal, until finally the output reacts to this, but becomes now too low. As a response, the feedback system will give a positive input signal (in order to increase the output), but again, it will not have any effect until some later time. As a result, the output stays too low for a while, until this input has its effect, where the output becomes too high again etc...

Feedforward is different: one tries to anticipate what the system will do for a given input, and tries to give a corrective signal right away, without sampling the output. But this means one needs a model of the system, and if the model is wrong, the output will not be what one desires.

Now, I don't know in how much one can identify "government interaction" as "feed forward" and "capitalism" as a feedback system, but in as much as it is, the delay between "inputs" (CO2 production etc...) and the "outputs" (changing climates, effects on investments, costs induced by it...) is probably way too long for a feedback mechanism to be efficient.

The question of whether government stuff is really feed-forward can be put in question: after all, there's feedback from the electorate, and this is the "time constant" by which politicians work. Politicians which work for the good of people 30 years from now, but which place a burden right now, don't often get elected, or re-elected.

 

[NLocke]

I do not necessarily think that the only way this matter can be properly taken care of is through government regulations. However, I do think that to fix this problem everyone needs to face the facts and realize this it IS a real problem. I'm taking a class that focuses primarily on Global Warming and carbon admissions, it's pretty interesting. I recently read an article that suggests that it may be too late to completely solve this problem, and that we need to start trying to come up with methods of adapting to the changes that are going to happen.

I also read another article based on the EOCD's report. It's somewhat interesting. Here is the link if you want to read it.
http://www.usatoday.com/weather/climate/globalwarming/2008-03-05-oced-report_N.htm

 

[Dale]

everyone needs to face the facts and realize this it IS a real problem.

So what is the optimal temperature and why?

 

[Evo]

The Earth has been through periods of warming and periods of cooling. Who is to say what is right? Maybe a shift back to the warmer era which had rich forestation in Antartica? Lush vegetation in Greenland? Perhaps these are the norms and we're trying to preserve an unnatural climate?

Someone please tell me what the natural climate for the Earth is. Not what we as present day humans have experienced.

Is the present climate really the best for the earth? Wasn't a warmer worldwide climate better at sustaining more vegetation and life forms than our current temperature?

Are we so self-centered that we think what is ideal for humans is ideal for earth?

 

[Dale]

I agree with you Evo, and would just add that I know of no evidence that this current temperature is ideal even just for humans.

 

[vanesch]

Are we so self-centered that we think what is ideal for humans is ideal for earth?

I think the real problem with a potential climate change is that our current society is sliced up in nation states with territories, and that a general move of populations is made impossible by this structure. Moreover, nation states which are wealthy and which are becoming wealthy have to thank their wealth to economic structures which are not very resistant to any climate change, which would imply a total change in habits and habitats. Those that had sweet water and good agriculture might become desert-like, those that were adapted to dry climates may become flooded etc... All this overhauls the fragile social and economic structures of our society. This will result in too much social and economical strain, and might result in a lot of conflicts amongst nation states.

In as much as a climate change might not have affected too much our early ancestors before the switch to agriculture, it will hugely affect our current, fragile society which is absolutely not designed to adapt to such feats.

 

[RonL]

We can not predict the future, but the past can be studied, if even a small amount of the money and effort, that goes toward energy changes in an effort to change global warming, were to be directed toward this research area, and encouragement for others to study in this field, there might be some knowledge to react upon.

 

[Dale]

I think the real problem with a potential climate change is that our current society is sliced up in nation states with territories, and that a general move of populations is made impossible by this structure. ... In as much as a climate change might not have affected too much our early ancestors before the switch to agriculture, it will hugely affect our current, fragile society which is absolutely not designed to adapt to such feats.

I'm sorry, I don't buy any of this. It has never been easier or cheaper to move goods and people than it is now. And I have no idea in what way you think a huter-gatherer society is more robust than our current society, particularly wrt climate change.

 

[Mk]

There are those that posit that global warming can only be tamed via government regulations.

global warming can only be tamed via government regulations.

government regulations.

government regulations.

To me, that sounds suspiciously like attempting to use science to bring political change howe you want it.

 

[vanesch]

I'm sorry, I don't buy any of this. It has never been easier or cheaper to move goods and people than it is now.

You mean, like, people who find that they are living in an economically unfriendly environment have no difficulties to go geographically there where it is economically more prosperous ? Because *this* is the solution to climate change for a group of people: to go to where climate will be nice to them (and hence let's them to be economically prosperous).

I guess that's why the US is watching closely its border with Mexico, and that's probably why so many Africans pay crazy sums to hide underneath a vehicle just to cross the Mediterranean. Why don't they simply buy a normal boat ticket, 100 times cheaper ?

And I have no idea in what way you think a huter-gatherer society is more robust than our current society, particularly wrt climate change.

If it is slow climate change, then they can walk (as they did) to where it is better for them. Nowadays, you can't do that anymore. You cannot walk from, say, Sudan to Germany with your entire tribe.

 

[Andre]

The Earth has been through periods of warming and periods of cooling. Who is to say what is right? Maybe a shift back to the warmer era which had rich forestation in Antartica? Lush vegetation in Greenland? Perhaps these are the norms and we're trying to preserve an unnatural climate?

Someone please tell me what the natural climate for the Earth is. Not what we as present day humans have experienced.

Is the present climate really the best for the earth? Wasn't a warmer worldwide climate better at sustaining more vegetation and life forms than our current temperature?

Are we so self-centered that we think what is ideal for humans is ideal for earth?

To illustrate what natural climate changes can do:

Kienast, F., P. Tarasov, L. Schirrmeister, G. Grosse, A.A. Andreev; 2008; Continental climate in the East Siberian Arctic during the last interglacial: Implications from palaeobotanical records. Global and Planetary Change 60 (2008) p.p. 535–562

...To evaluate the consequences of possible future climate changes and to identify the main climate drivers in high latitudes, the vegetation and climate in the East Siberian Arctic during the last interglacial are reconstructed and compared with Holocene conditions...

...Our pollen-based climatic reconstruction suggests a mean temperature of the warmest month (MTWA) range of 9–14.5 °C during the warmest interval of the last interglacial. The reconstruction from plant macrofossils, representing more local environments, reached MTWA values above 12.5 °C in contrast to today's 2.8 °C.

Note that the last Interglacial, the Sangamonian or Eemian was about 120,000 years ago. But rather unusual conditions for a present day, high arctic tundra.

And as contrast:

Dittmers, K., F. Niessen, R. Stein, 2008; Late Weichselian fluvial evolution on the southern Kara Sea Shelf, North Siberia, Global and Planetary Change 60 (2008) p.p. 327–350.

Glaciations had a profound impact on the global sea-level and particularly on the Arctic environments. One of the key questions related to this topic is, how did the discharge of the Siberian Ob and Yenisei rivers interact with a proximal ice sheet?...

...Furthermore, the existence of the channel–levee complexes is indicative of unhindered sediment flow to the north. Channels situated on the shelf above 120-m water depth exhibit no phases of ponding and or infill during sea-level lowstand. These findings denote the non-existence of an ice sheet on large areas of the Kara Sea shelf.

In other words, during the coldest part of the last glacial period, the last glacial maximum, there was not a trace of an ice sheet, right in the middle of the area you would expect one.

So with all these conflicting discoveries ongoing, how can we be so sure about the driving forces of climate changes? We don't know nothing yet.

 

[Ivan Seeking]

There are those that posit that global warming can only be tamed via government regulations. On the other hand you have people saying that it can be tamed through free market economics. What do you guys think?

Free market economics requires cause and effect. The markets only respond to changes that affect the bottom line, so I don't see how the long term impact of GW would motivate change in the markets today. What is driving most companies to use green technologies is the price of energy.

 

[Dale]

You mean, like, people who find that they are living in an economically unfriendly environment have no difficulties to go geographically there where it is economically more prosperous ? Because *this* is the solution to climate change for a group of people: to go to where climate will be nice to them (and hence let's them to be economically prosperous).

I guess that's why the US is watching closely its border with Mexico, and that's probably why so many Africans pay crazy sums to hide underneath a vehicle just to cross the Mediterranean. Why don't they simply buy a normal boat ticket, 100 times cheaper ?

If it is slow climate change, then they can walk (as they did) to where it is better for them. Nowadays, you can't do that anymore. You cannot walk from, say, Sudan to Germany with your entire tribe.

I see your point, you are making a political statement, not a technological or economical statement. I was primarily making an economic statement, but I also disagree with your political claim.

First, let's take a worst-case scenario: fast climate change and only legal immigration. In this case I would estimate that the number of people saved is higher now than then by several orders of magnitude and, as the tribe would have probably been wiped out, the proportion of the population surviving is also probably higher now, but that is a much more difficult claim to justify.

Now, let's take a more realistic scenario: slow climate change and both legal and illegal immigration. There is no fixed limit to the amount of illegal immigration possible, but like any commodity it will follow a supply and demand curve. As you mention, the cost of the actual transportition is a small fraction of the cost of an illegal immigration. However, even accounting for the inflated price, it generally represents much less labor than walking would have cost our distant ancestors. Particularly when that labor is counted in terms of the destination earning capacity (i.e. borrow money to cross) which was not even possible for the early humans.

I think that the idea that large populations cannot shift across national borders today is wrong. It certainly is not correct between the US and Mexico nor between Europe and the middle-east and africa.

 

[vanesch]

[/quote]
First, let's take a worst-case scenario: fast climate change and only legal immigration. In this case I would estimate that the number of people saved is higher now than then by several orders of magnitude and, as the tribe would have probably been wiped out, the proportion of the population surviving is also probably higher now, but that is a much more difficult claim to justify.
[/quote]

How fast do you think climate has to change to "capture" a walking tribe? Assume they walk 10 km a day. In a year, they have walked 3000 km including some rest. Even if they only walk 1 km a day, they do 3000 km in 10 years.

I think that the idea that large populations cannot shift across national borders today is wrong. It certainly is not correct between the US and Mexico nor between Europe and the middle-east and africa.

You think that a large fraction (say, 60% of the Mexicans) went to the US ? You think that 60% of the Africans are now in Europe ?

 

[Dale]

You think that a large fraction (say, 60% of the Mexicans) went to the US ?

Yes, it is a large fraction, about 20%. Consider the following, the largest urban population of Mexicans is Mexico City, the second largest is Los Angeles. Money sent back to Mexico from immigrants in the US is the second largest source of Mexican GDP. And the influx has been large enough to significantly change the demographic make up of the US to the point that in several states whites are no longer a majority.

Like it or not populations do shift, en mass, across national borders. And this is just due to simple ordinary economic pressures rather than the extraordinary economic pressures contemplated by global warming alarmists.

 

[mheslep]

Free market economics requires cause and effect. The markets only respond to changes that affect the bottom line, so I don't see how the long term impact of GW would motivate change in the markets today. What is driving most companies to use green technologies is the price of energy.

There's also the interest of those companies that are selling green product, like the fluorescent bulb. Many companies, GE in particular, have a big stake in AGW being true, or at least believed, and thus forcing regulations requiring the use of their product.

 

[mheslep]

There are those that posit that global warming can only be tamed via government regulations. On the other hand you have people saying that it can be tamed through free market economics. What do you guys think?

In a sense nobody is considering anything else other than free markets any more, even the most adamant AGW. The only solution in play is carbon caps and trade - a free market approach with .gov giving out the credits which are then bought and sold. There's already a large and fast growing carbon trading exchange in Europe, principally founded by a US economist who's become wealthy as a result, interestingly. Fifty years ago governments would have indeed implemented an across the board one-emissions-standard-for-all regulation but no more.

 

[mheslep]

How fast do you think climate has to change to "capture" a walking tribe? Assume they walk 10 km a day. In a year, they have walked 3000 km including some rest. Even if they only walk 1 km a day, they do 3000 km in 10 years.

Sure, IF
-you're the first humans ever making the trip, because otherwise you're tribe had either a) be very good at trade/diplomacy or b) be very good at fighting because the locals are going to object to you meandering through their food supply, and
-you have a map, because if you take more than a week to cross a large mountain range like the Rockies in Winter pre-Columbian there's no food supply and you starve.

 

[vanesch]

In a sense nobody is considering anything else other than free markets any more, even the most adamant AGW. The only solution in play is carbon caps and trade - a free market approach with .gov giving out the credits which are then bought and sold. There's already a large and fast growing carbon trading exchange in Europe, principally founded by a US economist who's become wealthy as a result, interestingly. Fifty years ago governments would have indeed implemented an across the board one-emissions-standard-for-all regulation but no more.

Uh, in my book that's government regulation! This market wouldn't exist without any imposed CO2 quota (by the gouvernment - via international agreements).

 

[vanesch]

Yes, it is a large fraction, about 20%. Consider the following, the largest urban population of Mexicans is Mexico City, the second largest is Los Angeles. Money sent back to Mexico from immigrants in the US is the second largest source of Mexican GDP.

Wow, 20%. Didn't realize that. In any case, I can assure you that not 20% of the African population can come to Europe...

 

[Andre]

How fast do you think climate has to change to "capture" a walking tribe? Assume they walk 10 km a day. In a year, they have walked 3000 km including some rest. Even if they only walk 1 km a day, they do 3000 km in 10 years.

Roughly 12,670 +/- 20 Calendar years BP, major changes took place in the Northern hemisphere, the start of the Younger Dryas. This codates with the sudden disapearance of the Clovis culture in America and the extinction of some of the mega fauna actually only the mammoths and the sabre-toothed cats. The horses, turtles, ground sloths, etc were already extinct while the Mastodon survived into the Holocene.

It is believed that temperatures dropped several degrees, inferred from isotope ratios, however, pollen analysis would also support extreme aridness and greater climate continentality (colder winters, warmer summers). Were would the Clovis and the mammoths have to move?

(Recolonisation of the continent happened only several hundreds of years later with the Folsom culture.)

 

[Schrodinger's Dog]

How can you solve a problem that doesn't exist? And why should you bother? Sorry just trying to get into the big Business mind set. See how it feels.

 

[mheslep]

Uh, in my book that's government regulation! This market wouldn't exist without any imposed CO2 quota (by the gouvernment - via international agreements).

No market would exist anywhere without a government enforced rule of law. Nor will you find any free market economist stating government has no role.

Thus the interesting problem is determining the most efficient (lowest cost to society) method of reducing or restricting emissions. Two of the economic tools for doing this are command and control, and market based tools ala cap 'n trade. If its feasible to set up a market, then the latter is almost always preferred by economists because it fosters innovations in better, cheaper ways to reduce emissions

In theory, if properly designed and implemented, market-based instruments allow any desired level of pollution cleanup to be realized at the lowest overall cost to society, by providing incentives for the greatest reductions in pollution by those firms that can achieve the reductions most cheaply.

Rather than equalizing pollution levels among firms (as with uniform emission standards), market-based instruments equalize the incremental amount that firms spend to reduce pollution — their marginal abatement cost (Montgomery 1972; Baumol and Oates 1988; Tietenberg 1995).
Command-and-control approaches could — in theory — achieve this cost-effective solution, but this would require that different standards be set for each pollution source, and, consequently, that policy makers obtain detailed information about the compliance costs each firm faces. Such information is simply not available to government. By contrast, market-based instruments provide for a cost-effective allocation of the pollution control burden among sources without requiring the government to have this information.

From
Market-Based Environmental Policies:
What Can We Learn from U.S. Experience (and Related Research)?
www.rff.org/documents/RFF-DP-03-43.pdf

Market based solutions don't always work. For instance, transaction costs can make it unfeasible - if an emission source does some direct harm to individuals then the cost of setting up a compensation system with zillions of transactions is prohibitive. The 'Global' aspect of AGW and CO2 with ~zero local effect makes it perfect for a market instrument.

Also see MIT's 14.23 Econ course - http://ocw.mit.edu/NR/rdonlyres/Economics/14-23Government-Regulation-of-IndustrySpring2003/61042082-67FB-44DF-A0E7-8C3B5A14D758/0/1423class5.pdf" for a good primer.

 

[Dale]

No market would exist anywhere without a government enforced rule of law.

This is a little exaggerated. Even in total tyrrany or complete anarchy there is some market activity. However, you are absolutely correct that the government involvement in things like enforcing contracts and private property rights greatly enhances market activity.

 

[mheslep]

This is a little exaggerated. Even in total tyrrany or complete anarchy there is some market activity.

There's always at least a little government as anarchy is unstable - it can not stay 'complete'.

 

[vanesch]

No market would exist anywhere without a government enforced rule of law. Nor will you find any free market economist stating government has no role.

I didn't say that, but the question was: should the government(s) intervene in this climate thing, or should we let the market solve it (on its own). By that last thing, one would count on the feedback from "I'm doing something to the climate" hence "50 years from now this might affect my revenues" (higher production costs in changed environment, less revenue because of starving customer population etc...). Or, another mechanism which would be "free market" would be that people would only buy products that are made using low-emission processes, by some kind of preference. As such, it would give your product a higher market value if people only bought it, even if it had a higher price.

Putting quota on emissions by rule of law is an intervention in this otherwise free market. This is like limiting the number of doctors or lawyers per capita.

 

[mheslep]

I didn't say that, but the question was: should the government(s) intervene in this climate thing, or should we let the market solve it (on its own).

I understand that; I was attempting to steer the dialog to a more productive question: what should be the nature of the government action? Putting any emissions restrictions aside for a moment, as I suggested above we still need to have a government to have any free market at all. For instance, it must act positively to assure private property rights. Thus its not representative of an ideal free market to imagine firm A acting independent of the govt. w/ only buyers and suppliers. The govt. must be in that example to enforce rights. This includes, importantly, the protection of third parties which have their property infringed by firm's A emissions. In an idea free market firm A would be required to make all third parties whole. Even in the case of AGW, if firm A contributed to some percentage of a catastrophic rise in sea level that destroyed my beach property, they owe me in an ideal free market. Unfortunately this idealized scenario doesn't work because of the transaction costs involved with large scale cases like AGW. So instead we need the govt. to act on our behalf instead by regulating the emissions. The interesting question is, how does it best do that without wrecking the productivity of the enterprise.

 

[Constructe]

It won't be solved in any form you know, but in the end it will be corrected for though non-governmental solution as follows:

The US energy solution will go something like this. A declining population caused by weather related disasters and pollution even if we cut carbon emmisions in the US to 0. Lower consumption due to increasingly scarce goods and the fact that our money is being owned by everyone overseas (all we have is debt). So in the end, conservation or not, we will not be able to afford too much power besides hydroelectric. We basically burn about everything we can get in our country or countries we invade (Canada has lots of wood). Sounds silly grim but I bet your children's kids won't think that when they have kids. They will probably ask, "Why didn't you do something about it back when you could of?"

Af course we could build tons of nuclear power plants willy nilly and set up mass transit all over and encourage people to live close together. That will help a lot whit the gas problem. And we won't need air conditioning except on the top of the rocky mountains and in Alaska anymore. That will save loads of electricity if you don't mind no air conditioning.

Then there is India, who will at current exponential growth have more population than the rest of the world in your grandchildren's life. What can you do about that? Basically, although you may feel the US' actions can save the world, such thinking is obviously false.

Well I guess, the wild card for the US is fusion power that fits into your car and can run air conditioners to blow hot air onto less fortunate countries until the world heats up to a nice warm 250 degrees or so (when living at all may be a burden). Otherwise kiss the present days goodbye.