Friday, August 8, 2008

Solution Lies in the Free Market System

On Monday, John P. Holdren criticized global warming skeptics for challenging the scientific "consensus" around global warming. He also accused skeptics of stalling the political process necessary to combat global warming:
The extent of unfounded skepticism about the disruption of global climate by human-produced greenhouse gases is not just regrettable, it is dangerous. It has delayed - and continues to delay - the development of the political consensus that will be needed if society is to embrace remedies commensurate with the challenge. The science of climate change is telling us that we need to get going. Those who still think this is all a mistake or a hoax need to think again.
The Boston Globe printed my response today.

SKEPTICS OF climate change not only doubt the "scientific consensus" behind global warming but the proposed mechanism to combat global warming.

Supporters of decisive action on climate change assume that the federal government must step in and solve the global warming crisis using a "cap and trade" or carbon tax program. Advocates of these programs do not realize that both these mechanisms will severely hamper economic growth, and neither plan will slow global warming.

The only way to slow global warming is to allow entrepreneurs to create more energy-efficient products and technologies. As the demand for these products grows, entrepreneurs will naturally react to market forces and direct their energies to producing more energy-efficient products at a cheaper cost. Government intervention is not the solution to this problem, the free market is.


Anonymous said...

The free market works, but only when incentives are in the correct place. The issue with climate change is that there are large negative externalities. This means that when a person pollutes, that person only feels a fraction of the costs, reducing their incentive to change.

If you spit your gum on the ground while walking, you don't feel the effect of it getting stuck to my shoe. Likewise, a person burning a gallon of oil feels the costs of buying the oil, but not the effect of the cost to me from a reduction of the pleasure I gain from a nice view.

Alex Taylor said...

Skepticism of human-produced global climate change is not unfounded as John P. Holdren would have readers believe. Until climatologists submit their studies to rigorous peer review, their results should not be allowed to influence government spending. (read about Steve McIntyre efforts in this area here )
And even then it would be appropriate to have a cost benefit analysis of the proposed solutions.