This is a document that inspired me so much that my announced blogging pause will have to do away for now. At an international think tank forum in Atlanta, USA, this week-end, I grabbed a few publications on display for visitors, and must say I was gripped by one in particular: the Civil Society Report on Climate Change, published in November 2007 (I am posting this in my “Always late in my readings category ;-))by a coalition of 41 international free market and free society think tanks. Finally, some reason into the climate change debate! Neither denial of the fact of climate change nor Al Gore style alarmism and new-wave Bali five-star hotel bigotry.
What it says is basically the following: Kyoto-type protocols are not going to solve the problem. Imposing emission targets, as the current protocol does, will cost too much and contribute to impoverishing the world. At the same time, given the projected changes in temperatures, the targets imposed by Kyoto are largely insufficient. The report debunks all sorts of alarmist myths about what climate change is said to be causing: e.g. raise the number of cases of malaria, or kill a greater number of people in an increasing number of climatic turbulences. Scientists in the report show that if there is a resurgence of maladies such as malaria, their development is rather due to changes in agricultural and urban ecologies and human behaviour than to climate change as such. We were reminded that malaria was eradicated in Europe only 40 years ago – mainly due to drainage of swamp land, better housing, and the fact that the masses moved to cities. Another article says that mortality due to climatic accidents such as floods, tornados and storms has gone down 95% per annum since the beginning of the 20th Century! Why? Because of improved living conditions, better building techniques, better insurance policies thanks to better enforcement of property rights in developed countries, etc. etc. What about Bangladesh and its much-publicised risk of being flooded? We are simply reminded, that, technically, the Netherlands are more at risk than Bangladesh of being swamped by rising waters. But the main differences between the Netherlands and Bangladesh are the following – one has democracy the other not, one has functioning and non-corrupt infrastructure markets the other not, one has applied technology to solve a concrete problem, the other doesn’t have the capacity.
As many climate change apostles say, indeed the poor are much more exposed to the risks induced by climate change. But this is due to their poverty. Priority should therefore be classic poverty eradication strategies – focus on economic growth to get the prosperity machine going, better property rights, open markets and investment regimes to allow for technology transfers (see this post)… The usual stuff that has proven to work for both prosperity and the environment– when it is properly implemented. Please be reminded that the worst environmental catastrophes have occurred and occur in socialist economies (Aral sea disaster, Tchernobyl, just to mention a few).
An important area in all this climate change debate is agriculture. Given the finding that even if Kyoto-type targets were met, the rise in temperatures is not likely to be stopped, insists the report. Adaptation will be needed. In terms of growing food and crops – it is better to let farmers adapt to new conditions by letting a free agricultural market operate. Russia could become much more of a wheat producer (and should therefore solve its property right issue and open its agricultural markets, would I add) while others in e.g. the US would need to adopt other crops. This freedom is the more important the less it is possible to predict what is likely to happen. In the case of climate change, it is not possible to actually know how and where temperatures will change and how this will affect local environments. Planning, targeting, continuing to maintain a constituency of subsidy-dependent tariff-protected farmers is inefficient, socially regressive and the single most important recipe for failure.
Finally, the problem with emission targets and top-down approaches to foster alternative fuels (such as the US’ ethanol policies – see this article, or EU-wide targeting) is that it fosters rent-seeking. It misallocates resources away from investments adapted to local conditions that could work better. Companies engaged in carbon trading schemes or receiving subsidies will gain, while potentially more effective actors will be crowded out.
To cut a long story short: to ward off the worst effects of climate change, the usual liberal agenda is probably what makes more sense. Make poor countries rich enough to help them cope with the challenge. While fostering a dynamic and entrepreneurial environment, this freeing up of productive forces will lead to better adaptation to local effects of climate change. With price mechanisms that are right in resources such as water and energy – innovation is likely to happen more quickly and help solve any supply bottlenecks. If I may add a little historical digression: the steam engine was invented because entrepreneurs were trying to find a solution to ever-scarcer wood-supply and a retreat of forests, created by previous growth and rising energy needs. Forests were free to grow again. The king of England didn’t ordain the innovation and its use….!
This report is both sensible and humane. A necessary read to counter the Al Gore and bureaucratic UN fallacy. And this is a good reminder of the Hayekian principle: “Nowhere is freedom more important than where our ignorance is greatest”.