An economics lesson for Stephen Harper (and everyone else, come to that), in which Ottawa Citizen columnist Dan Gardner gives Greg Mankiw a call. It's a clear and readable explanation of the economics of climate change policy, in 800 words or fewer. And all a journalist had to do was call an economist and ask a couple of questions.
See? It can be done.
I don't think that column was at all convincing if you don't already buy into the global warming crisis. He addresses that with:
"One might debate the science behind climate change," Mankiw notes, "but I don't think you can doubt that having more cars on the road, congestion get worse and accidents get worse."
That, to me, is a very weak argument. I don't want to dumb it down too much, but it seems pretty much the same as saying something like: cheap food = more fat people. Or longer life-spans = more long drawn-out diseases = high health care costs. Or, closer analogy: cheaper computers = more internet congestion.
Having more cars on the road means more people can afford to drive, which I would consider generally a good thing. So, I don't think there's much argument in that column for people who aren't seriously concerned about global warming.
And if the remaining one-third of economists don't think energy should be further taxed - well, that's a pretty significant minority.
Posted by: Luke | September 17, 2008 at 01:21 PM
Travis, Greg Mankiw isn't a liberal economist, he's a very conservative one. And even if he was, should he disclaim each statement with "liberals economists, however you identify them, didn't come up with the concept I'm about to describe?"
Posted by: Bryan M | September 17, 2008 at 02:31 PM
"Having more cars on the road means more people can afford to drive, which I would consider generally a good thing."
I suppose that's merely a matter of opinion. I see it as more people required to drive; a bad thing.
Posted by: tatsuke | September 17, 2008 at 05:51 PM
"I suppose that's merely a matter of opinion. I see it as more people required to drive; a bad thing."
Well, I would guess that most people who are required to drive are in that position because of where they choose to live - and they choose locations which are only open to them because they can afford to drive. But the point in the article was that regardless of the effect on the climate, everybody can support higher gas prices because it would reduce congestion - and it reduces congestion by making driving less affordable, not by reducing the number who are "required" to drive.
Posted by: Luke | September 17, 2008 at 10:45 PM
Stephen, you previously expressed your wish that more economists would be called upon to explain stuff. Now we have an incident where this wish was fulfilled. One instance isn't a trend in my books, yet I remain hopeful. I agree that economists have something to offer in many discussions. This is why I read the Worthwhile blog. So why add "An economics lesson for Stephen Harper (and everyone else, come to that)..."? Is the point of this posting that economists can offer substance to a discussion or that everyone, save for except Greg Mankiw and Stephen Taylor, get it?
Yes, it CAN be done. Let's not diminish it with posturing.
Posted by: Rick | September 17, 2008 at 11:47 PM
I was drawing attention to a column that provided a very nice summary of the economics of climate change policy. My complaint is that notwithstanding the acres of stories and opinion pieces that have been written on climate change policy, very, very little of it provides readers with anything in the way of discussion of the reasoning behind these policies. If Dan Gardner can put together a very nice explanation of the substance of these policies in the space of one column, there's no reason for other journalists to spend all their time - and I mean *all* their time - talking about how they are being marketed.
Posted by: Stephen Gordon | September 18, 2008 at 06:11 AM
The article makes the point that economists understand energy taxes, not ordinary people. From this I conclude that the Green Shift plan is too complicated for the average voter.
Stephen, did you read the article?
Posted by: Manny | September 18, 2008 at 01:20 PM
This article is annoying: there is a 99.9% consensus in atmospheric physics that climate change is real, that it is caused by humans, that C02 omissions are the cause and that climate change is dangerous for human and non-human life.
Posted by: SB | September 18, 2008 at 11:50 PM
99.9% concensus SB? Statistically improbable. Who comprise the set you are referring to? By "atmospheric physics" do you mean Meteorologists? Geologists? Geophysicists? Physicists?Zoologists? I could go on and on...
Fact: CO2 is a lagging indicator. Feel free to PROVE how humans have caused climate change.
Yes, we may be experiencing fluctuations in typical climate patterns, but won't we all look stupid when we discover the cause is something other than CO2? Maybe the cause is deforestation. Or air pollution. Or abuse of the oceans. Or sun spots. Or flatulence. Or...I could go on and on...
I'm leaning towards flatulence. The supply is seemingly endless even in the absence of demand. Perhaps a vertical demand curve?
Posted by: Rick | September 19, 2008 at 01:13 AM