Climate change legislation is among the greatest calls to action in modern time. Scores of scientists and global leaders have taken up the cause and have set out policies to counteract the rise in global temperatures. As President Obama declared in his recent State of the Union address, "for the sake of our children and our future, we must do more to combat climate change ... if Congress won't act soon to protect future generations, I will."
Unfortunately, Mr. President, your call to arms is set to hurt our children rather than help them.
Over the past century, global average temperatures have risen by over 1.4 degrees Fahrenheit and scientists predict that they could rise even more by 2100. This all seems like an overwhelming cost on future generations, but what are the actual costs of these supposed economic solutions to curb carbon emissions? Market-based policies like Pigovian taxes and cap-and-trade have all been proposed to curtail the problem. But what effect will they have on human well-being in the future, if that is in fact the goal of these policies?
This fight against global warming involves a huge, upfront cost in the form of foregone goods and services. Any government that takes top-down control to combat emissions will do so at the expense of the people's income and GDP. Whether it be in the form of increased taxes on productive market behavior or a cap system, the government ultimately is taking options away from consumers and producers. And some of the world’s poorest people will be the worst hit.
Despite claims that our warming planet is making people worse off, especially in developing countries, there is no evidence that is actually happening. Empirical trends show that by any objective climate-sensitive measure, human well-being has improved remarkably over the last several decades. Agricultural productivity has increased, extreme poverty has been more than halved along with disease rates from malaria and others, manufacturing productivity has boomed, and, most importantly, life-expectancy has more than doubled since 1900.
Climate legislation threatens to rob this kind of progress from those people who need it the most.
To borrow a phrase from Nobel laureate F.A. Hayek, today’s policy makers are engaging in a pretense of knowledge. It is rather naive and dangerous to believe that world leaders could manipulate human action throughout the world through tax policies and quotas in the hope of benefiting people in the 22nd century and beyond.
Even worse, these policies are akin to taking from the poor to give to the rich. If you think about it, people 100 years from now will be far better off than we are now and have better tools to affect the global environment. As physicist Freeman Dyson has argued, future generations will likely have far cheaper means of reducing atmospheric concentrations of carbon dioxide, if the more alarming scenarios play out.
So, if climate change is a real threat to humanity, the market overtime will develop the best means of combating it. The idea that a global community of government leaders could rearrange planetary economics to slow the warming of Earth is not only pretentious but is unmistakeably dangerous.