In an article published in the Australian on 12 October 2009 (http://www.theaustralian.news.com.au/story/0,25197,26195539-30417,00.html ), Des Moore the director of the Institute for Private Enterprise (http://www.ipe.net.au/ipeframeset.htm ), makes an interesting contribution to debate about the appropriate policy response to the threat of climate change. He suggests that we should rely on science to produce a viable solution to energy production that does not cause CO2 emissions. This might happen either because science leads to improvement in the efficiency of some currently known means of energy production that is not currently economically viable, or because scientists develop an entirely new means of producing energy. Because we can rely on this happening it makes no sense to institute costly emissions reduction policies now, or so Moore argues.
It is certainly possible that advances in science will render the need for emissions reduction policies obsolete, but is it a good idea to rely on this happening? According to Moore “… history tells us that [by 2050] science would very likely have produced a viable new solution that is at present unknown.” This sounds reassuring, although Moore cites no empirical study, or authority on history, to back up this sweeping generalisation. A further source of concern is that is has obvious counterexamples. Moore is considering a 40 year time frame. Scientists have been attempting to cure cancer for more than 40 years, without success. Scientists have also been working on a cure for HIV for approximately 30 years, without success. Suppose though that Moore, or some other advocate of this line of reasoning, produces evidence to back up a reasonable probabilistic generalisation – say that we can be 95% confident that science will find a solution. Would that be a sufficient reason to abandon efforts at emission reduction?
The answer to the above question depends, in part, on how we approach this problem, which is a problem of decision making under risk, and how damaging we think that global warming might be. Broadly speaking, there are two well recognised approaches to decision making under risk, application of the ‘precautionary principle’, and Cost-Benefit analysis. If we apply the precautionary principle then we will, in effect, act on the rule of thumb that we are ‘better safe than sorry’. Unless we think that the threat of global warming is trivial – and hardly anyone thinks this – then we will be motivated to take action now to reduce this threat, regardless of the possibility that our efforts might turn out to be redundant, due to advances in science.
If we apply Cost-benefit analysis then we will attempt to compare the likely overall balance of costs and benefits of action now, versus inaction now, in the face of the threat of possible climate change. The calculation will, of course, be rather complicated, but given that reasonable assessments of the potential costs of climate change are extremely high, even a low estimate of the chance that these costs will be incurred is going to be sufficient to warrant expenditure on emission reduction schemes now. So, it looks like Moore’s appeal to the possibility that science will probably ‘catch up’ is not sufficient to justify us taking the risk of not acting to protect ourselves against the possible risks of climate change. Taking action now to reduce carbon emissions is, in effect, a form of insurance against possible disaster. My house probably wont be burgled, struck by lightning or burnt to the round, but even a small chance of these possibilities eventuating is sufficient to justify my purchase of an insurance policy. Similarly, even a small possibility of catastrophic climate change occurring in the future is probably worth attempting to insure ourselves against by bearing the costs of a reduction in carbon emissions now.
There’s another obvious weakness in Moore’s argument that you didn’t pick up on Steve, which is that scientific progress itself depends on financial incentives. Just compare our rate of progress in developing drugs for malaria and TB with our rate of progress in developing drugs to address erectile dysfunction! The CO2 emissions problem is a “tragedy of the commons” in which it is not economically rational for private parties to bear the cost of producing clean energy of their own accord. So there’s no real incentive for private parties to fund the relevant science without government intervention – for example by taxing emissions and funding science with the proceeds, or by imposing emisiions limits as in a cap and trade system. Scientific progress doesn’t appen in a vacuum – it would be promoted by just the sort of government interventions that Moore short-sightedly opposes.
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