Global Warming: The Audacity of Hope

The New York Times’ Steve Lohr has a lengthy piece about the gains from pricing the cost of carbon creation more accurately:

Global warming can be seen as a classic “market failure,” and many economists, environmental experts and policy makers agree that the single largest cause of that failure is that in most of the world, there is no price placed on spewing carbon dioxide into the atmosphere. . .

“Setting a real price on carbon emissions is the single most important policy step to take,” said Robert N. Stavins, director of the environmental economics program at Harvard University. “Pricing is the way you get both the short-term gains through efficiency and the longer-term gains from investments in research and switching to cleaner fuels.”

. . . only with some sort of federal policy in place . . .will it become clear what carbon cleanup or fuel-switching moves [utilities] may have to make, and on what sort of timetable.

Combating global warming. . . will require over-the-horizon breakthroughs involving safe nuclear energy, hydrogen power and advanced carbon sequestration — or technologies that have not yet been imagined.

But even today, there are sizable opportunities, by insisting on more efficient energy use, that are not being seized, according to the McKinsey Global Institute. In a new report, the institute. . . estimated that the yearly growth in worldwide energy demand could be cut by more than half through 2020 — to an annual rate of 0.6 percent from a forecast 2.2 percent, using current technology alone.

Available steps that would yield a more productive, and efficient, use of energy include compact fluorescent lighting, improved insulation on new buildings, reduced standby power requirements and an accelerated push for appliance-efficiency standards.

[One way] of pricing carbon [is] to place a cap on total emissions and then let polluters trade permits to emit a ton of carbon dioxide. . .Then, companies able to go below their emission targets would be allowed to sell their unused “permits to pollute” to companies that could not. . .

China and India, energy specialists say, would certainly avoid joining any international effort on global warming without an emphatic move by the United States. “Every year we delay, we contribute to another year of delay in China, India and elsewhere,” said Jason S. Grumet, executive director of the National Commission on Energy Policy, a bipartisan group of energy experts.