Without California’s new law to limit carbon dioxide and other greenhouse gas emissions from automobiles, the state will suffer “changes in sea levels, increased water supply problems and wildfires” as a result of global warming. At least that is what one supporter asserted in a radio newscast this week when Gov. Gray Davis signed the bill into law.
I hate to be a killjoy, but California can implement its law and it still will suffer harmful changes — at least if global warming plays out the way many experts expect. This law will not spare California from the phenomenon in any measurable way because global warming is just that — global.
Don’t get me wrong. I believe our nation should take action to reduce emissions of greenhouse gases. The issue is about which policies are most efficient in reducing harmful pollution and what the effects are of policies implemented by one of 50 states in a country that is one of 170-plus countries on the globe.
California’s new law deals with auto emissions. Carbon dioxide and ozone from internal combustion engines are key components of greenhouse gas emissions, but much less important than combustion of coal with existing technology.
While California is the most populous state in the nation and has somewhat over 10 percent of the total U.S. fleet of automobiles, the contribution of its cars to world greenhouse gas emissions is well under 1 percent of the total. So even draconian limits on cars in that state will have much less effect on greenhouse gases than closing down old coal-fired electric plants in the Midwest or converting a small portion of Chinese industry from coal to natural gas.
Proponents argue that California always has led the nation on auto emission controls, requiring air injection pumps and catalytic converters years before the federal government acted. They argue that California’s action will inspire other states to follow so the total effect eventually will be greater.
But those measures were introduced in response to pollution that was highly specific to California. The particular microclimate of metropolitan Los Angeles, including its year-around sunshine, caused auto emissions to be converted into the photochemical smog that gave the city national notoriety.
In that case, Californians paid the price of more expensive cars, but they also reaped most of the benefits of reduced pollution. With this week’s new measure, they will again bear all the cost, but will reap an infinitesimal fraction of any benefits.
The atmosphere is a “common-pool resource” used and abused by all 6 billion people on the planet. History and economic theory teach that when there is no overall governing body to set rules for using a common-pool resource, the resource gets overused and society is worse off than if there were enforceable rules.
In such a situation, there is little incentive for any individual user to cut back on using the resource if the rest of users do not. Those who stint get less use of the resource, and they do not benefit from saving the resource since the stinting makes so little difference.
That is the situation California is in. It is stinting, and depending on how the law is implemented, the cost to Californians may be very substantial. And it is clear that none of those paying the cost will see any tangible results in their lifetimes.
“But sacrificing for future generations is what environmentalism is all about,” some of my friends will say, and I agree. “Moreover,” they will continue, “someone has to show leadership and take the first step. Californians, 81 percent of whom reportedly support the new law, are doing just that.”
Sacrificing consumption for the future is a good motive. But it is better to sacrifice and lead with effective, low-cost policies rather than with flawed, ineffective and costly ones.
It is highly likely that California will choose mandating specific technologies or emissions levels. Recent history shows this approach has high costs relative to pollution abatement achieved.
There are much simpler alternatives. Raise motor fuel taxes. People will respond by finding the lowest-cost way to reduce fuel use. Develop systems to tax vehicles on their specific emission levels rather than mandating technologies for emission reduction. A tax on emissions will provide an incentive to find the lowest-cost means of abating them.
The health of the national economy would be greatly improved and resources would be used more efficiently if we imposed a 50-cent-per-gallon tax on motor fuels and lowered income taxes by an equal dollar amount. The great majority of households would also be better off except in the immediate short run.
It is a tribute to economic ignorance that sharply higher gas taxes remain politically anathema while high-cost, low-effectiveness measures such as California’s are enacted into law.
© 2002 Edward Lotterman
Chanarambie Consulting, Inc.