• The Invisible Hand

The Reality of Climate Change

There is a consensus in economics that climate change is an issue that needs to be tackled, however, this article challenges some of the attitudes towards this issue.

Climate change has gained more publicity in recent months due to the radical action of climate protestors. This is great as it has raised the profile of an important issue, however, tackling this problem should be done in such a way that does not attract attention from other important issues. Above climate change, the biggest threat to the UK and our living standards is our ‘productivity puzzle. It is perhaps no surprise that there are no protestors at this rather less glamorous issue.

The problem with spending money on tackling climate change is that there is a significant opportunity cost. People argue for a massive World War Two scale mobilisation of resources towards tackling climate change, however, such a move would be much more helpful in establishing a productivity fund. This would modernise our economy and rapidly increase long-run real incomes. The purpose of this example is to show that spending on climate change has a significant cost, so we must be sure it is an important issue.

The truth is that the UK is actually quite a minor contributor towards climate change, so any action we undertake on our own is unlikely to do anything to tackle climate change. Instead, we should focus on international efforts such as the Paris climate agreement, but really the work of campaigners in the US is much more important. The entire carbon emissions of the whole of the EU is still only 65% of that of America and a third of that of China. The UK is actually only 67th in the world for CO2 emission per capita in 2017. Although, China is probably targeted the most the US is the most polluting major country per person. They pollute twice as much as China per person and almost three times as much as the UK. Therefore, the US is really where we should be concentrating.

The idea of an extinction level event from climate change should also be rejected. Humans are an ingenious and incredibly innovative race and we should not underestimate the ability of future technology to deal with climate change. New agricultural methods can make crops which can be grown in higher temperatures and are more disease resistant and clearly there is no shortage of land. In the UK people will survive perfectly fine, the greater problem is in developing countries. In developing countries more people work in agriculture which is more vulnerable to the impact of a rising sea level.

To help developing countries we should not focus on climate change as much and instead we should focus on general economic conditions. If countries like Bangladesh can industrialise quickly as China has done, people will no longer be as reliant on the land and they can migrate to safe places. Likewise, in Sub-Saharan Africa farmers could be able to migrate to cooler areas if they are given new skills. We should tackle the underlying economic weaknesses in these countries rather than trying to reverse a quite inevitable process. For western countries this could take the form of extending trading agreements with these countries or encouraging FDI to these areas. Part of this change will inevitably happen overtime, which means in the future most countries will be rich enough to withstand climate change. International agreements should not impose restrictions on developing countries and instead allow them to industrialise and advance.

There has also been a trend towards veganism in recent years. This is a commendable sacrifice, but it is government action not individual action which will solve this problem. We should not have to suffer to tackle climate change when the government is so much better equipped to do so. Likewise, with the Heathrow expansion, we should not limit the economic growth potential of our economy to tackle climate change. Instead we should offset it by investing in green technology which enhances rather than weakening our economy.

Extinction Rebellion are doing well at raising awareness for the problem, but perhaps their focus is not quite right. The climate movement openly rejects nuclear power, which is our best chance of achieving the net zero emissions target by 2050. Unlike other renewable energy it is reliable and produces energy 24/7 and it is truly carbon free unlike coal or gas. It can produce huge amounts of energy; Hinkley point C can produce as much power as it would take 600 football pitches of solar panels to produce and it will not turn off when the Sun stops. The only risk is of an accident but with modern safety standards this risk is extremely low, effectively zero. The UK is safe: we are not on a fault line and we do not have 1980s Ukrainian engineering. The climate movement should get over their fear and look towards the best solution towards achieving their aim.

Some activists also adopt the crackpot idea of creating a Citizens’ Assembly, where decision makers are effectively chosen at random from the public. These people have no experience and in many cases few qualifications. I think Extinction Rebellion would be quite surprised that they probably wouldn’t get their way. Besides most people would probably vote for a reintroduction of capital punishment and other draconian measures. This is a crazy idea and Extinction Rebellion would do much to make their cause credible by rejecting this idea.

To summarise; there are better uses for our money in most cases, there is little the UK can do, the threat is overblown and the methods of the Extinction Rebellion could be much better. This article does not seek to deny climate change or say that we should ignore it. Instead we should merely take a more rational view and tackle the problem in the most proportionate and effective way.

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