WSJ: Climate Change Agenda Needs to Adapt to Reality; Limiting CO2 won't work- better to adapt

The Climate Change Agenda Needs to Adapt to Reality

Limiting carbon emissions won't work. Better to begin adjusting to a warmer world.

By EDWARD P. LAZEAR

Sept. 2, 2014 7:30 p.m. ET    THE WALL STREET JOURNAL

The Obama administration is instituting a variety of far-reaching policies to reduce carbon emissions and mitigate climate change. Are any of these capable of making a difference? Simple arithmetic suggests not. Given this reality, we would be wise to consider strategies that complement and may be more effective than mitigation—namely, adaptation.

According to the Paris-based International Energy Agency, in 2012 the world emitted a little over 31 gigatons of carbon dioxide. China was the No. 1 emitter, accounting for more than one-fourth of the carbon produced. The U.S. was second, emitting about one-sixth.

China and India, among other developing countries, argue that they should be allowed to increase carbon emissions. They're still developing and require higher rates of economic growth. Moreover, they aren't responsible for previous emissions, and on a per capita basis U.S. emissions are much higher.

These arguments have merit but must be measured against the reality of carbon growth. Consider China: Its carbon emissions increased by an average 8.6% a year between 2002 and 2012. Were China to continue at this pace for 27 years until it reaches today's U.S. GDP per capita, it would emit 99 gigatons of carbon in 2041 alone, or three times the world's current emissions.

This scenario is too pessimistic. As countries develop, they become more efficient in energy use. But even if China tapered its emissions growth from 8.6% to zero over the same 27 years, it would still emit as much carbon in 2041 as the entire world does today. And that's not including emissions growth from India, Africa and South America.

Is there any hope of limiting carbon emissions to 30-50 gigatons in 2030, as many climatologists have called for, with substantial reductions thereafter? Some countries, notably Denmark and Sweden, have significantly reduced emissions. Can the U.S. do the same?

Feel-good actions won't make a dent. For example, it is fashionable to favor locally grown produce in part to reduce the carbon from transport. But transport from producer to retailer is a trivial part—less than 5%—of energy used in the life cycle of produce. Almost all of the emitted carbon is associated with production, which means that growing a tomato bound for Chicago in an Illinois winter hothouse rather than outdoors in Florida is not a carbon-saving strategy.

How about using public transportation, driving carbon-friendly vehicles, living closer to work, or biking instead of driving? Suppose that the U.S. completely eliminated carbon emissions from transportation over the next four years. The IEA data show that world emissions would still rise because the reduction from the U.S. would not cover the increase in carbon emitted by the rest of the world. Without world-wide changes, there is limited gain, even from dramatic action by the world's second-largest emitter.

The economics also work against a major transformation in the technology of producing power, either mobile or stationary. Coal is cheap. Natural gas is becoming even cheaper, but its carbon emissions, according to the U.S. Energy Information Administration, are still half those of coal and three-quarters those of gasoline per unit of energy produced. Although a switch to natural gas for many power uses would help, and accounts for recent drops in U.S. emissions, it cannot change the carbon arithmetic enough to prevent the world from exceeding "safe" levels.

Unless an economical low-carbon source of power generation becomes available, it is unrealistic to expect that countries, especially developing ones, will accede to any demand to produce power in a higher-cost manner merely to emit less carbon.

Very high carbon taxes or severely restrictive cap-and-trade policies might provide substantial motivation to conserve. These could reduce carbon-intensive consumption and motivate a switch to lower carbon power sources like nuclear. But these actions are undesirable because of their adverse effects on the economy. Australia instituted a $22 per ton carbon-dioxide tax in 2012. It repealed the highly unpopular measure this July, mainly because of its economic costs and perceived ineffectiveness. Research and development are worthwhile. But they can be wasteful and ineffective—recall Solyndra—and if R&D is to be government sponsored, all developed countries should participate in funding.

Given these limitations on mitigating carbon emissions, it is important to study how to adapt to climate change. There are myriad possibilities for adaptation, including the obvious, like building dikes in low-lying areas, and planting heat-tolerant crops and trees in cities. Some adaptation will occur naturally. For example, economic incentives will induce people who are setting up new households, businesses and farms to move to areas that are less severely harmed by warming temperatures.

Organizations like the U.N.-sponsored Intergovernmental Panel on Climate Change have pushed adaptation as a complementary strategy to mitigation. Still, adaptation has received little attention by the Obama administration and is hardly mentioned in public discussion. Proponents of strong anti-carbon measures seem to believe that even considering an alternative to mitigation will weaken the public's willingness to bear the costs of mitigation.

Carbon math makes clear that without major effort and a good bit of luck, we are unlikely to control the growth of emissions enough to meet the standards that many climate scientists suggest are necessary. It is time to end the delusions and start thinking realistically about what can and will be done.

Mr. Lazear, chairman of the President's Council of Economic Advisers (2006-09) and head of the White House committee on the economics of climate change (2007-08), is a professor at Stanford University's Graduate School of Business and a Hoover Institution fellow.