Why Levitt and Dubner like geo-engineering and why they are wrong

This is a more subtle question and it is sensible to break it down into questions of human nature and human actions. Human nature – the desire to strive for a better life, our inability to think rationally when trying to impress the objects of our desire, our natural selfishness and occasionally altruism, etc – is very unlikely to change anytime soon. But none of those attributes require the emission of fossil fuel-derived CO2 into the atmosphere, just as they don’t require us to pollute waterways, have lead in gasoline, use ozone-depleting chemicals in spray cans and fridges or let dogs foul the sidewalk. Nonetheless, societies in the developed world (with the possible exception of Paris) have succeeded in greatly reducing those unfortunate actions and it’s instructive to see how that happened.

The first thing to note is that these issues have not been dealt with by forcing people to think about the consequences every time they make a decision. Lead in fuel was reduced because of taxation measures that aligned peoples preferences for cheaper fuel with the societal interest in reducing lead pollution. While some early adopters of unleaded-fuel cars might have done it for environmental reasons, the vast majority of people did it first because it was cheaper, and second, because after a while there was no longer an option. The human action of releasing lead into the atmosphere while driving was very clearly changed.

In the 1980s, there were campaigns to raise awareness of the ozone-depletion problem that encouraged people to switch from CFC-propelled spray cans to cans with other propellants or roll-ons etc. While this may have made some difference to CFC levels, production levels were cut to zero by government mandates embedded in the Montreal Protocols and subsequent amendments. No-one needs to think about their spray can destroying the ozone layer any more.

I could go on, but the fundamental issue is that people’s actions can and do change all the time as a function of multiple pressures. Some of these are economic, some are ethical, some are societal (think about our changing attitudes towards smoking, domestic violence and drunk driving). Blanket declarations that human behaviour can’t possibly change to fix a problem are therefore just nonsense.

To be a little more charitable, it is possible that what was meant was that you can’t expect humans to consciously modify their behaviour all the time based on a desire to limit carbon emissions. This is very likely to be true. However, I am unaware of anyone who has proposed such a plan. Instead, almost all existing mitigation ideas rely on aligning individual self-interest with societal goals to reduce emissions – usually by installing some kind of carbon price or through mandates (such as the CAFE standards).

To give a clear example of the difference, let’s tackle the problem of leaving lights on in rooms where there is no-one around. This is a clear waste of energy and would be economically beneficial to reduce regardless of the implications for carbon emissions. We can take a direct moralistic approach – strong exhortations to people to always turn the lights off when they leave a room – but this is annoying, possibly only temporary and has only marginal success (in my experience). Alternatively, we can install motion-detectors that turn the lights out if there is no-one around. The cost of these detectors is much lower than cost of the electricity saved and no-one has to consciously worry about the issue any more. No-brainer, right? (As as aside, working out why this isn’t done more would be a much better use of Levitt and Dubner’s talents). The point is changing outcomes doesn’t necessarily mean forcing people to think about the right thing all the time, and that cheap fixes for some problems do indeed exist.

To recap, there is no direct link between what humans actually want to do and the emissions of CO2 or any other pollutant. If given appropriate incentives, people will make decisions that are collectively ‘the right thing’, while they themselves are often unconscious of that fact. The role of the economist should be to find ways to make that alignment of individual and collective interest easier, not to erroneously declare it can’t possibly be done.

What is the real lesson from the horse-to-automobile transition?

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