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RICHARD CARSON left University of California San Diego economics professor delivered the Mississippi State University Department of Agricultural Economics centennial lecture on climate change With him are Steve Turner center head of the MSU Department of Agricultural Economics and Keith Coble MSU professor of agricultural economics
<p><em><strong>RICHARD CARSON, left, University of California, San Diego economics professor, delivered the Mississippi State University Department of Agricultural Economics centennial lecture on climate change. With him are Steve Turner, center, head of the MSU Department of Agricultural Economics, and Keith Coble, MSU professor of agricultural economics.</strong></em></p>

Developing nations major contributors to pollution, climate change emissions

The difficulty in thinking about climate change, says Richard Carson, economics professor at the University of California, San Diego, &ldquo;is that there are many who say this could never, ever be true,&rdquo; and even those who may accept the underlying premise of the physics behind climate change &ldquo;may say there are better things to spend our money on now, that people in the future are going to be wealthier than we are &mdash; let them deal with the problem.&#39;&nbsp;

The debate over climate change, says Richard Carson, “has long centered on the notion that we needed a lot more science before we should do something about it — and that’s just a fantasy of lobbyists.

“Now that we know what climate change is, and we’re pretty capable of forecasting some of the whens, ifs, and whats, most of the problem now is on the economic side and the implementation side.”

And says Carson, economics professor at the University of California, San Diego, who delivered the keynote lecture celebrating the Mississippi State University Agricultural Economics Department’s 100-year anniversary, “The U.S. is no longer in the driver’s seat” with the climate change issue.

“The U.S. is rapidly decarbonizing and reducing its energy consumption. Almost all the problems that will occur in the future will happen in a relatively small number of big developing countries — China, Brazil, Indonesia — and they’re very much opposed to doing anything. Their position is that anything they do to tax energy or carbon dioxide (CO2) emissions will reduce their level of economic growth. China is very fearful of the instability that may happen if their growth level drops.”

Carson, a Jackson, Miss., native and a 1977 MSU graduate, has been at UC San Diego for 25 years, and is said to be the most cited environmental economist in the world. He participated in development of the Clean Air Act and Clean Water Act and was principal investigator on the economic damage assessment for the Exxon Valdez oil spill in Alaska.

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“Environmental economics analyzes products and services where there are no prices,” says Steve Turner, head of the MSU Department of Agricultural Economics. “Clean air for example — What price can we put on clean air? Or clean water? On the flip side, what is the cost of polluted air? Or polluted water? What are the economic consequences and impacts of catastrophic events like hurricanes, earthquakes … or oil spills? Environmental economists try to estimate values for these things and come up with policy.

“This is where Dr. Carson has made his biggest impact. The concept of contingent valuation, outlined in his book by that name, is now one of the predominant methods of valuing environmental goods and services.”

MSU began a major in environmental economics and management in 2009, Turner noted, and “today we have about 30 students in that major.”

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The difficulty in thinking about climate change, Carson says, “is that there are many who say this could never, ever be true,” and even those who may accept the underlying premise of the physics behind climate change “may say there are better things to spend our money on now, that people in the future are going to be wealthier than we are — let them deal with the problem.

“Others take the position that most of the adverse effects won’t be felt in the U.S. or Europe, or that actions by the U.S., Europe, and other major developed countries would be completely ineffective in the long run unless the undeveloped countries also bought into doing something about it.”

A long, slow process

Climate change is “a long, slow process,” he says. “There is a lot of natural variability in the system, and global average temperatures jump around a lot.” In the early 1980s, “there was a very long period…when we were putting so much sulfur dioxide into the atmosphere it was actually cooling the planet and overriding the warming.”

The politics of climate change in the U.S. has involved “three different government agencies that haven taken three very different perspectives,” Carson says. “The Department of Energy wanted to adopt anything that would cause a delay in taking action on climate change. The Environmental Protection Agency wanted to do anything that would give them the power to regulate greenhouse gases. And the U.S. State Department wanted to control the politics and bargaining process.”

As governments are wont to do, international conferences were held in Montreal, Rio de Janeiro, and Kyoto, Japan. An outgrowth of the 1987 Montreal conference was an international treaty for the regulation of chlorofluorocarbons (CFCs), such as the Freon gas used in air conditioners, which were creating holes in the Earth’s ozone layer that provides protection from deadly ultraviolet regulation.
“They identified the problem and who would do what,” says Carson, and “the change came about fairly easily because there were ways we could not use Freon and still have our air conditioning.”

But he says, the success of the Montreal Protocol was followed by “an interesting and ugly notion that has, in some sense, poisoned the well ever since — a major campaign by some of the big energy interests, copying the model of the tobacco industry, trying to get across to the public the message that the science on climate change was unsound, that scientists disagreed.

“Their opinion polls showed that if people thought scientists didn’t agree, the public would be less likely to support doing anything. They put out the message that the concerns about climate were exaggerated, that government intervention was pointless, and that the problem could be solved later — if it actually came to be.

“It was a pretty scurrilous campaign, and there were people who got their hands dirty on this. The public’s voice has become highly politicized, aided by the news media’s approach that they can always find people to take positions on either side.”

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Now, Carson says, “Every time there’s a big hurricane like Katrina or Sandy, they want to jump on it and say it’s due to climate change. But that’s really hard to sell to most climate scientists, who know there’s enough natural variability in the system that it’s difficult to attribute any single catastrophic event to climate change — that these things are slowly increasing over time, and you don’t have big hurricanes one day and small hurricanes the next day. All this is really bizarre in terms of influencing American public opinion.”

Politically, Carson says, “most Democrats seem to think climate change is real; large fractions of Republicans contend climate change isn’t real; and Independents move up and down based on how far off you are from temperature averages on the day they are interviewed.

Climate modeling getting better

But, he says, the science of climate change continues to move forward, as computer systems get more powerful and more data are collected to provide more accuracy in climate modeling. “Scientists are getting better at fingerprinting what we should expect to see.” Still, “They’re just hard problems to solve, and they get harder as they get more realistic.

“From the very beginning, economists were pretty good at laying out all the key issues. They didn’t solve them – but they knew what they were.”

Proposals to limit carbon emissions through a tax, or cap and trade schemes, have not been supported, Carson notes.

Environmental groups, he says, “thought it immoral to do what the economists wanted to do — put a price on pollution. It’s ironic that now the environmental groups have learned the lesson of the economic carrot: that if you want less of something, you tax it.

“We now know the way we went about improving environmental quality was a complete and total disaster — we got lower environmental quality and much higher prices than if we had implemented pollution taxes.

“Why did this happen? Politicians like to protect the current industrial complex, so they grandfathered in the old technology, which meant most pollution control requirements were applied to new plants. This killed technological innovation, whereas if we had enacted pollution taxes we’d have had lots of technological innovation.

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“This caused economists to move more away from thinking about pollution taxes and more toward cap and trade solutions — the thinking being that you can give out permits to existing polluters, and in the long run you’re putting a price on pollution just like you would with a tax, and you get the dynamic incentives. And there’s a lot of consensus that dynamic incentives matter more than what you do in the short run.

“The major failing of the original economic vision was that they saw the cost of delay as being low. If they had done what William Nordhaus (Yale University economist) recommended in 1976, and imposed a carbon tax, this problem in the U.S. would have been solved. Instead, they kept delaying.”

The key driver of technological change and innovation is higher prices,” Carson says. “At $100 a barrel for oil, there are a lot of alternatives that can be adopted. But at $30 a barrel, which it was a few years ago, a lot of new technologies just don’t pencil out. So, one way to drive technology is to put on higher prices, and a lot of stuff will be developed, but the question is, can you scale it up?”

If economic sectors are divided into those that are sensitive to climate and those that aren’t, only about 5 percent of the U.S. economy is classified as climate sensitive, he says. “But it’s very different in a lot of developing countries — in India for example, the percentage would be very high.”

But, “If you warm Siberia, what happens? You get a lot of good agriculture.”

Early climate change proposals failed to forecast that developing countries would generate as much emissions as they have, Carson says, “and it’s now acknowledged that plans in which developing countries would do nothing was a bad decision. Initial forecasts were it would take 15 years or more for China to match the U.S. in CO2 emissions, but it happened much sooner than that.”

Potential impacts of climate change

In a question-and-answer session, Carson said accuracy in weather forecasting is still limited to about three to 10 days — “beyond that, you might as well look at the Farmer’s Almanac.

“But we’ve got sensors now in the South Pacific, and we know west coast weather will be affected by what happens a couple of weeks earlier in the South Pacific. We have weather and climate models that can tell Californians to hold water in dams because it’s going to be hot and dry. We’re getting enough resolution that people can make plans.

“There are climate change maps floating about, forecastsing changes in the hydrology cycle — how much water you get and when — that look pretty ugly in terms of extended drought for some places, like Texas and Oklahoma. On the other hand, things for Mississippi actually might look fairly good.

“In terms of climate sensitivity, high value crops such as avocados in San Diego will continue to be grown unless water becomes prohibitively expensive. But if Imperial Valley farmers can make more money selling their water to cities, we might see some of their cotton or shift to Mississippi or other areas.”

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Even though climate change models don’t show big losses or gains for the U.S. as a whole, Carson says, “There are big losses or gains for certain regions. You could see the Corn Belt move north. Canadians do quite well agriculturally under climate change.”

If climate change is rapid, he says, “We could see more extinction of animals and plants; if it’s slow, there could be more adaptation to the change. The speed with which it happens is pretty much the primary determinant on land.”

But there are there are some big uncertainties associated with ocean warming. “A big worry is giant methane deposits on the bottom of the oceans; if they were to significantly heat up in the climate change process, it could be pretty catastrophic.”

Carbon sequestration proposals come up lacking economically, Carson says.

“I’ve never seen a carbon sequestration project that looked like it made any economic sense. With all the discoveries of natural gas driving those prices down, it doesn’t make any economic sense to sequester carbon.

“As natural gas prices drop, we’ll see power plants across the country converting from coal to natural gas. There are some carbon sequestration projects out there, but about all they’ve shown is that they’re very expensive. With the amount of energy it takes to sequester carbon, it doesn’t look like sequestration works with cheap natural gas.”


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