While reading the Wall Street Journal article Can Countries Cut Carbon Emissions Without Hurting Economic Growth? I couldn’t help but be upset by some of the things that Steven F. Hayward said regarding the prospect of reducing carbon emissions. His stance seems to essentially support the notion that since there is currently no magic formula to reduce said emissions so we should just kick the can down the road and wait until our nation is wealthy enough to address these issues without hurting the economy. What a terrible idea! How about we think of ways to reduce this impact instead of discounting that possibility altogether.
Using this type of logic, the interstate highway system would have never been built. That highway system cost the United States tax payer approximately 129 billion dollars. Of course there is going to be an economic impact to cutting carbon emissions, the question is, is the problem real enough for the investment to be made? The presence of the interstate highway system has decreased transaction costs and stimulated so much growth that the net economic impact was immensely positive.
Mr. Hayward seems jaded to the economic hardship the country could face if we did nothing. What happens to economic growth when the government starts issuing UV index warnings and people can’t work due to unsafe climate conditions? I stipulate that GDP would be impacted to a far greater extent in this situation. Opponents to carbon reduction are simply unwilling to consider an economic loss associated with non-action, and thus are radically biased when calculating net impacts. I feel that this economic loss due to non-action will be so large, that no matter how radically immense the cost of a solution might sound, it will be a positive net present value investment.
Unfortunately, this is not a widely held belief, so we need to figure out a way to support innovation in a way that the economic impact is reduced to the greatest extent. Cap and Trade systems and carbon tax platforms are probably the most promising way to reduce emissions in the short term, but they don’t do enough to support research and development in alternative fuels. Instead of a revenue neutral system like the one suggested by Robert Stavins in this same article, I support a net increase in revenue from carbon tax to be used directly for federal grants for carbon reduction research. For a number of years leading minds have been researching ways to manipulate bacteria to convert CO2 into alternative fuels. It is unbelievable that the government isn’t pouring capital into this type of research already. If we want to talk about ways to increase this nations GDP, how about a near-zero loss power cycle!