“Rationality and Objectivity in Science and Policy”
Brian Roach
Global Development and Environment Institute
Strange but True?
“From 2000 to 2006 carbon
emissions grew at a faster rate in
the European Union than in the
United States”
- U.S. ambassador to France, 2008
Totally True
United
States
Emissions
2000
Emissions
2006
Percent
Change
EU-27
5,864
4,121
5,908
4,321
+0.8%
+4.8%
Source: U.S. Energy Information Administration, Department of Energy
A More Complete Analysis
7000
Emissions (MMT)
6000
5000
4000
3000
2000
1000
0
1990
1995
2000
2005
Year
Source: U.S. Energy Information Administration, Department of Energy
2010
Totally True, but Totally
Misleading
Year Range
2001-2007
United States
+5.7%
EU-27
+4.6%
2001-2005
+4.0%
+2.6%
1999-2005
+5.5%
+5.5%
1995-2006
+10.9%
+6.6%
1990-2006
+17.3%
+3.0%
Source: U.S. Energy Information Administration, Department of Energy
Objectivity in Science
and Policy
• Positive vs. Normative Analysis
• Values vs. Bias
• Disciplinary Bias vs. Humility
The economic view on
climate change
“As economists, we believe that global climate change carries with it
significant environmental, economic, social, and geopolitical risks, and
that preventive steps are justified. Economic studies have found that
there are many potential policies to reduce greenhouse-gas emissions for
which the total benefits outweigh the total costs. The most efficient
approach to slowing climate change is through market-based policies.
The United States and other nations can most efficiently implement their
climate policies through market mechanisms, such as carbon taxes or the
auction of emissions permits. The revenues generated from such policies
can effectively be used to reduce the deficit or to lower existing taxes.”
“The Economists’ Statement on Climate Change,” March 1997 (signed by over
2,500 economists, including at least a dozen Nobel Prize-winners).
Tax Bads, Not Goods
(Green Tax Shifting)
Increase taxes on
negative
externalities (e.g.,
burning fossil
fuels) based on
their social costs.
Lower other
current taxes such
that the overall
effect is revenue
neutral.
"Cutting income taxes while increasing gasoline taxes would lead to more rapid economic
growth, less traffic congestion, safer roads, and reduced risk of global warming—all without
jeopardizing long-term fiscal solvency. This may be the closest thing to a free lunch that
economics has to offer.“ – N. Gregory Mankiw, chair of the Council of Economic Advisers under
G.W. Bush, economic adviser to Mitt Romney
Tax Bads, Not Goods
(Green Tax Shifting)
Then, three main questions :
1.How high should the tax be?
2. What taxes should be lowered to compensate?
3. What should be done with the revenue?
Social Cost of Carbon
A tax of $100/ton
carbon equates to
an increase of $0.27
per gallon of gas.
Cost of Carbon Reduction
Euros / Ton
100
50
Carbon capture and storage (CCS); new coal
Medium-cost forestation
Cofiring biomass
Wind; low penetration
Industrial feedstock substitution
CCS, enhanced oil recovery, new coal
Low-cost forestation
Livestock
Nuclear
Biodiesel
Waste
Coal-to-gas shift
Industrial
CCS; coal retrofit
CCS
Industrial motor
systems
Avoided
deforestation
0
-50
-100
-150
Standby losses
Sugarcane biofuel
Fuel efficiency in non-commercial vehicles
Water heating
Air conditioning
Lighting systems
Fuel efficiency in commercial vehicles
5
10
Total cost is only 0.4% of
global GDP in 2030.
15
Building Insulation
Billion Tons CO2 Equivalent
20
25
Scientific Consensus
January 16, 2015: NOAA and NASA announce that 2014 was warmest year on record.
All 13 of the warmest years on record have occurred in the last 15 years. The chance
of this happening randomly is 1 in 27 million. (Source: The Washington Post)
Climate Change Survey Results
Source: Pew Research Center
Behavioral Economics and
Irrationality
Behavioral economics: the study of psychological,
social, cognitive, and emotional factors on economic
decision-making.
• anchoring effects (the influence of SS numbers on
willingness to pay)
• framing effects (penalty for late registration [93%] vs.
discount for early registration [67%])
• availability heuristics (impact of an atypical video
evaluation on willingness to take a class)
Video with Dan Ariely: https://www.youtube.com/watch?v=9X68dm92HVI
Some Applications to Climate
Change: What Not To Do
• Don’t use the word “tax”! (65% of Republicans were
willing to pay a “carbon offset” vs. 27% a “carbon tax”)
• Fear tactics will tend to backfire
• Labeling products as “eco-friendly” will deter adoption
among some groups
• Monetary incentives that encourage better individual
behavior may “crowd out” the collective sense of civic
responsibility that is necessary
Some Applications to Climate
Change: What To Do
“Behavioral research over the past 30 years strongly suggests that attention-catching and
emotionally engaging informational interventions may be required to engender the public
concern necessary for individual or collective action in response to climate change.” – Elke
Weber, Climate Change 1: 332-342, 2010.
• People want to be better than average (energy bill
comparison data)
• Token incentives can be surprisingly effective
• Present efficient choices as defaults (new home options)
• People prefer standards over economically efficient
approaches (fuel economy and appliance standards)
• Provide immediate feedback on energy use