Greenhouse Gas Reduction Policy: From Rhetoric to Reason

Greenhouse (GHG) gas emission reduction has moved to the top of the public agenda. Virtually no field of public policy will escape being examined through the prism of this issue. With this comes one of the greatest public policy challenges in memory --- barring hawkers of various ideological and commercial interests from hijacking the agenda for their own purposes.

There are at least two ways to comprehensively reduce GHG emissions --- not surprisingly, a right way and a wrong way.

The wrong way is typified by the conventional wisdom among many puritanical urban planners, These social engineers have been frustrated for decades, failing to herd automobile drivers into transit and new residents into pre-War densities. All the while, their demons --- the expansion of home ownership that could only have occurred by building on cheap land on the urban fringe and the greater mobility provided by the automobile --- have been major contributors to the democratization of prosperity. Throughout the first world, from the United States to Western Europe and Japan, poverty levels have fallen markedly as more households take part in the quality of life mainstream. Women have been liberated to become near-equal economic players and low income households, including many that are African-American or Hispanic, have entered the middle class and beyond.

Yet, for years, much of the planning community has exhibited an inestimable contempt for the lifestyles that have been chosen by most households. The Puritan planners have identified this once-in-a-lifetime chance to force their confession of faith on everyone else.

This is evident, for example in a new Brookings Institution report (Shrinking the Carbon Footprint of Metropolitan America purporting to demonstrate that GHG emissions are higher in the suburbs than in more dense cores. Using this debatable conclusion --- directly at odds with the findings of the Australian Conservation Foundation’s far more extensive study (Australian Conservation Atlas) (Note 1) --- they jump from rhetoric to their time honored litany of anti-mobility, anti-home ownership and pro-poverty commandments, skipping right over the economic analysis that any disciplined analysis of trades-off would require.

The planning Puritans fall into the trap outlined by Lord David King, the British government climate advisor who has suggested that much that is proposed on GHG emissions reductions would take us back to the 18th century.

It is not enough that one strategy is less GHG intensive than another. All candidate strategies must be weighed based upon their economic cost and their social implications. Some policies will be inexpensive, others will be horrendously expensive. Be assured that the Puritanical commandments will congregate strongly toward the more expensive and socially destructive side of the scale.

There is a better way. It involves careful examination of the potential, costs and benefits of competing strategies to reduce GHG emissions. This is the right way, because it allows using the least expensive strategies, while minimizing economic harm (read minimizing the expansion of poverty).

The consulting firm, McKinsey and Company has set out an impressive blueprint that accomplishes just that (Reducing US Greenhouse Gas Emissions: How Much and at What Cost? (Note 2). Taking the International Panel on Climate Change maximum standard of $50 per metric ton of carbon dioxide removed, McKinsey shows that the United States could reduce its GHG emissions by 28 percent by 2030, using strategies with marginal costs of less than $50 per ton. McKinsey notes that this can be accomplished while “maintaining comparable levels of consumer utility.” This means, according to McKinsey, “no change in thermostat settings or appliance use, no downsizing of vehicles, home or commercial space and traveling the same mileage” (though they do envision car mileage improvements more substantial than called for in the recent federal energy bill). In other words, no “social engineering.” Again, read no expansion of poverty and no need to set course toward an 18th century future.

None of this, of course, is sufficient for the planning Puritans, whose ideology gains greater satisfaction from telling people how to live than to reducing GHG emissions.

The “bottom line” is this. Sustainability is not one-dimensional, it is multi-dimensional. Environmental sustainability (including GHG emissions reductions) cannot be achieved without economic sustainability. Already there are indications that public interest in GHG emissions reductions is waning with the mild economic downturn (Note 3), which is nothing compared to what would be in store if the planning Puritans had their way. Thus, sustainability is at least about both the environment and economics.

To be effective and to avoid reducing the standard of living, efforts to reduce GHG emissions must be based upon sound economic analysis. The starting point is an evaluation of strategies to determine which are the least expensive in terms of cost per ton removed, and the least invasive as regards how people live and work. In the final analysis, as my Paris colleague Professor Jean-Claude Ziv frequently puts it, sustainability requires acceptability.

Notes

(1) A synthesis of the Australian Conservation Atlas findings is in our Housing Form in Australia and its Impacts on Greenhouse Gas Emissions, prepared for the Residential Development Council of Australia.

(2) The report was co-published with The Conference Board and produced in association with DTE Energy, Environmental Defense, Honeywell, National Grid, NRDC, PG & E and Shell.

(3) See for example, http://www.ft.com/cms/s/0/9ce69b86-2c4f-11dd-9861-000077b07658.html >Wilting Agenda.