Market-based Policies Work To Fight Climate Change, From India To Jamaica

Market-based Policies Work To Fight Climate Change, From India To Jamaica

The economic foundation at the heart of conservative political philosophy is that markets are the best way to allocate the bulk of society’s resources.

That faith in markets explains the Republican Party’s preference for, say, private medical insurance over a government-run American health system. And it informs their push to loosen regulations that have governed big banks since the 2009 financial crisis.

This emphasis on markets is also on display in many policies that conservative parties across the globe are enacting to address climate change. Climate change may be a partisan issue in the United States, but numerous surveys of other countries reveal that tackling climate change is not incompatible with conservative principles.

Conservative governments with a strong climate record

Across Europe, Conservatives have gotten behind cap and trade, a market-based system for reducing carbon emissions.

The European Emission Trading system, passed by the European Commission in 2005 with support across the ideological spectrum, sets limits on the continent’s annual carbon emissions. Companies that pollute more may purchase carbon rights from those who find innovative ways to reduce their own emissions, capping total pollution while giving individual firms the freedom to buy and sell their share.

The cap-and-trade strategy was first put into practice in the United States in 1990, under President George Bush, to combat acid rain.

In Germany, an industrial powerhouse, Chancellor Angela Merkel of the center-right Christian Democratic party, has strongly supported a comprehensive climate law that would combine cap and trade, tax incentives for renewable energy and major investments in energy efficiency.

To be fair, the political spectrum in Europe skews left. But conservatives in more right-leaning countries are fighting climate change, too.

India’s hard-right Prime Minister Narendra Modi – leader of the world’s largest democracy – is a strong proponent of renewable energy. While his administration maintains support for the coal industry, solar production is set to increase five-fold in India by 2022.

And Chilean President Sebastian Piñera, who holds strong conservative views on many social issues, has nonetheless embraced some of the most stringent climate goals in Latin America.

According to the Climate Action Tracker, which monitors countries’ progress toward reducing carbon emissions, Chile will generate 65% of its electricity from renewable energy by 2035, and has imposed strict new energy efficiency standards on manufacturing, mining and transportation.

In Jamaica, the Labour Party – the island’s conservative party – has endorsed a new “climate accelerator.” Backed by billionaire Richard Branson and the Inter-American Development Bank, the initiative aims to make this vulnerable region more resilient by attracting financing to scale up renewable energy, build low-carbon infrastructure and increase investments in green technology.

Climate change is a market failure

I am an environmental economist, but it doesn’t require advanced training in economics to recognize the basic principles underlying all these conservative-backed environmental policies.

The first is conservative faith that financial markets can adapt and innovate to address today’s climate challenge.

There’s evidence for this belief. Renewable power – which was economically unviable just a decade ago – is so affordable now because governments and companies around the world have invested immensely in solar and wind. What is expensive today can be made cheap tomorrow if governments put the right incentives in place.

The second basis for the climate policies conservatives worldwide support is an understanding that, under certain circumstances, markets can and do fail.

Markets function properly only under certain conditions.

First, the harmful impacts of producing a given good – which economists call “negative externalities” – cannot hurt anyone other than the producers and consumers of that good. There must also be clear and enforceable property rights over every good in the marketplace.

When these bedrock principles are violated, market breakdown ensues.

Take air pollution, for example. When a chemical factory that produces a cleaning product releases toxic fumes, the cost of that pollution – the negative externality – is not borne exclusively by the buyer or seller of that product. Everyone who inhales the fumes suffers.

Yet because no one owns the “property rights” to the atmosphere, no one can hold the chemical factory or its clients legally responsible for contaminated air.

This is market failure. And in the environmental realm, it is the norm.

Every coal plant or natural gas field that emits the greenhouse gases that drives climate change free of charge is violating the fundamental principle of well-functioning markets.

Policies like Europe’s cap and trade system or Britain’s carbon tax, which will soon require companies pay a fee for every unit of pollution they emit, are designed to fix this problem.

Global outliers

Not all conservatives embrace market-based environmental policies, of course.

Republicans in the U.S. voted overwhelmingly against a proposed carbon tax in 2016. Then-House Majority Whip Steve Scalise said it would be “detrimental to American families and businesses.”

Australia’s conservative party, which won a surprise victory in May’s national election, is propelling the country backwards on climate. A few years ago, they repealed a 2010 carbon tax. Now the country’s new prime minister, Scott Morrison, is reducing the emission-reduction target Australia signed onto in the Paris climate accords and renewing his government’s commitment to the coal industry.

Brazil’s far-right President Jair Bolsonaro, too, has rolled back his country’s strict environmental regulations. That’s left the Amazon rainforest open to deforestation and fire.

The current governments of the United States, Australia and Brazil are global outliers who defy overwhelming basic economics and overwhelming scientific evidence that climate change is one of the gravest risks facing humanity.

From Jamaica to India, rightist leaders have shown confidence that with the right incentives companies can and will innovate to transform the economy in a more sustainable direction.

About The Author

Jason Scorse, Associate Professor, Chair, Director, Middlebury

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Related Books

Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming

by Paul Hawken and Tom Steyer
9780143130444In the face of widespread fear and apathy, an international coalition of researchers, professionals, and scientists have come together to offer a set of realistic and bold solutions to climate change. One hundred techniques and practices are described here—some are well known; some you may have never heard of. They range from clean energy to educating girls in lower-income countries to land use practices that pull carbon out of the air. The solutions exist, are economically viable, and communities throughout the world are currently enacting them with skill and determination. Available On Amazon

Designing Climate Solutions: A Policy Guide for Low-Carbon Energy

by Hal Harvey, Robbie Orvis, Jeffrey Rissman
1610919564With the effects of climate change already upon us, the need to cut global greenhouse gas emissions is nothing less than urgent. It’s a daunting challenge, but the technologies and strategies to meet it exist today. A small set of energy policies, designed and implemented well, can put us on the path to a low carbon future. Energy systems are large and complex, so energy policy must be focused and cost-effective. One-size-fits-all approaches simply won’t get the job done. Policymakers need a clear, comprehensive resource that outlines the energy policies that will have the biggest impact on our climate future, and describes how to design these policies well. Available On Amazon

This Changes Everything: Capitalism vs. The Climate

by Naomi Klein
1451697392In This Changes Everything Naomi Klein argues that climate change isn’t just another issue to be neatly filed between taxes and health care. It’s an alarm that calls us to fix an economic system that is already failing us in many ways. Klein meticulously builds the case for how massively reducing our greenhouse emissions is our best chance to simultaneously reduce gaping inequalities, re-imagine our broken democracies, and rebuild our gutted local economies. She exposes the ideological desperation of the climate-change deniers, the messianic delusions of the would-be geoengineers, and the tragic defeatism of too many mainstream green initiatives. And she demonstrates precisely why the market has not—and cannot—fix the climate crisis but will instead make things worse, with ever more extreme and ecologically damaging extraction methods, accompanied by rampant disaster capitalism. Available On Amazon

From The Publisher:
Purchases on Amazon go to defray the cost of bringing you InnerSelf.comelf.com, MightyNatural.com, and ClimateImpactNews.com at no cost and without advertisers that track your browsing habits. Even if you click on a link but don't buy these selected products, anything else you buy in that same visit on Amazon pays us a small commission. There is no additional cost to you, so please contribute to the effort. You can also use this link to use to Amazon at any time so you can help support our efforts.

 

follow InnerSelf on

facebook icontwitter iconyoutube iconinstagram iconpintrest iconrss icon

 Get The Latest By Email

Weekly Magazine Daily Inspiration

LATEST VIDEOS

The Great Climate Migration Has Begun
The Great Climate Migration Has Begun
by Super User
The climate crisis is forcing thousands around the world to flee as their homes become increasingly uninhabitable.
The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
The Last Ice Age Tells Us Why We Need To Care About A 2℃ Change In Temperature
by Alan N Williams, et al
The latest report from the Intergovernmental Panel on Climate Change (IPCC) states that without a substantial decrease…
Earth Has Stayed Habitable For Billions Of Years – Exactly How Lucky Did We Get?
Earth Has Stayed Habitable For Billions Of Years – Exactly How Lucky Did We Get?
by Toby Tyrrell
It took evolution 3 or 4 billion years to produce Homo sapiens. If the climate had completely failed just once in that…
How Mapping The Weather 12,000 Years Ago Can Help Predict Future Climate Change
How Mapping The Weather 12,000 Years Ago Can Help Predict Future Climate Change
by Brice Rea
The end of the last ice age, around 12,000 years ago, was characterised by a final cold phase called the Younger Dryas.…
The Caspian Sea Is Set To Fall By 9 Metres Or More This Century
The Caspian Sea Is Set To Fall By 9 Metres Or More This Century
by Frank Wesselingh and Matteo Lattuada
Imagine you are on the coast, looking out to sea. In front of you lies 100 metres of barren sand that looks like a…
Venus Was Once More Earth-like, But Climate Change Made It Uninhabitable
Venus Was Once More Earth-like, But Climate Change Made It Uninhabitable
by Richard Ernst
We can learn a lot about climate change from Venus, our sister planet. Venus currently has a surface temperature of…
Five Climate Disbeliefs: A Crash Course In Climate Misinformation
The Five Climate Disbeliefs: A Crash Course In Climate Misinformation
by John Cook
This video is a crash course in climate misinformation, summarizing the key arguments used to cast doubt on the reality…
The Arctic Hasn't Been This Warm For 3 Million Years and That Means Big Changes For The Planet
The Arctic Hasn't Been This Warm For 3 Million Years and That Means Big Changes For The Planet
by Julie Brigham-Grette and Steve Petsch
Every year, sea ice cover in the Arctic Ocean shrinks to a low point in mid-September. This year it measures just 1.44…

LATEST ARTICLES

trees to plant for climate2
Plant These Trees To Improve City Life
by Mike Williams-Rice
A new study establishes live oaks and American sycamores as champions among 17 “super trees” that will help make cities…
north sea sea bed
Why We Must Understand Seabed Geology To Harness The Winds
by Natasha Barlow, Associate Professor of Quaternary Environmental Change, University of Leeds
For any country blessed with easy access to the shallow and windy North Sea, offshore wind will be key to meeting net…
3 wildfire lessons for forest towns as Dixie Fire destroys historic Greenville, California
3 wildfire lessons for forest towns as Dixie Fire destroys historic Greenville, California
by Bart Johnson, Professor of Landscape Architecture, University of Oregon
A wildfire burning in hot, dry mountain forest swept through the Gold Rush town of Greenville, California, on Aug. 4,…
China Can Meet Energy and Climate Goals Capping Coal Power
China Can Meet Energy and Climate Goals Capping Coal Power
by Alvin Lin
At the Leader’s Climate Summit in April, Xi Jinping pledged that China will “strictly control coal-fired power…
Blue water surrounded by dead white grass
Map tracks 30 years of extreme snowmelt across US
by Mikayla Mace-Arizona
A new map of extreme snowmelt events over the last 30 years clarifies the processes that drive rapid melting.
A plane drops red fire retardant on to a forest fire as firefighters parked along a road look up into the orange sky
Model predicts 10-year burst of wildfire, then gradual decline
by Hannah Hickey-U. Washington
A look at the long-term future of wildfires predicts an initial roughly decade-long burst of wildfire activity,…
White sea ice in blue water with the sun setting reflected in the water
Earth’s frozen areas are shrinking 33K square miles a year
by Texas A&M University
The Earth’s cryosphere is shrinking by 33,000 square miles (87,000 square kilometers) per year.
A row of male and female speakers at microphones
234 scientists read 14,000+ research papers to write the upcoming IPCC climate report
by Stephanie Spera, Assistant Professor of Geography and the Environment, University of Richmond
This week, hundreds of scientists from around the world are finalizing a report that assesses the state of the global…

 Get The Latest By Email

Weekly Magazine Daily Inspiration

New Attitudes - New Possibilities

InnerSelf.comClimateImpactNews.com | InnerPower.net
MightyNatural.com | WholisticPolitics.com | InnerSelf Market
Copyright ©1985 - 2021 InnerSelf Publications. All Rights Reserved.