Saturday, November 17, 2012

Opinion: Climate Change: Lessons From Ronald Reagan

THE re-election of President Obama, preceded by the extraordinary damage done by Hurricane Sandy, raises a critical question: In the coming years, might it be possible for the United States to take significant steps to reduce the risks associated with climate change?

Ronald Reagan Library

President Reagan, who favored cost-benefit analysis, in 1984 at his western White House.

A crucial decision during Ronald Reagan?s second term suggests that the answer may well be yes. The Reagan administration was generally skeptical about costly environmental rules, but with respect to protection of the ozone layer, Reagan was an environmentalist hero. Under his leadership, the United States became the prime mover behind the Montreal Protocol, which required the phasing out of ozone-depleting chemicals.

There is a real irony here. Republicans and conservatives had ridiculed scientists who expressed concern about the destruction of the ozone layer. How did Ronald Reagan, of all people, come to favor aggressive regulatory steps and lead the world toward a strong and historic international agreement?

A large part of the answer lies in a tool disliked by many progressives but embraced by Reagan (and Mr. Obama): cost-benefit analysis. Reagan?s economists found that the costs of phasing out ozone-depleting chemicals were a lot lower than the costs of not doing so ? largely measured in terms of avoiding cancers that would otherwise occur. Presented with that analysis, Reagan decided that the issue was pretty clear.

Much the same can be said about climate change. Recent reports suggest that the economic cost of Hurricane Sandy could reach $50 billion and that in the current quarter, the hurricane could remove as much as half a percentage point from the nation?s economic growth. The cost of that single hurricane may well be more than five times greater than that of a usual?full year?s worth of the most expensive regulations, which ordinarily cost well under $10 billion annually. True, scientists cannot attribute any particular hurricane to greenhouse gas emissions, but climate change is increasing the risk of costly harm from hurricanes and other natural disasters. Economists of diverse viewpoints concur that if the international community entered into a sensible agreement to reduce greenhouse gas emissions, the economic benefits would greatly outweigh the costs.

Skeptics have rightly observed that even aggressive regulatory steps by the United States cannot stop climate change. Greenhouse gases stay in the atmosphere for decades, and many nations, especially in the developing world, are contributing growing levels of emissions. For this reason, the unilateral actions of any country will not do what must be done to reduce anticipated warming and the resulting harms. Nonetheless, cost-effective reductions from the United States would help, both in themselves and because they should spur technological changes and regulatory initiatives from other nations.

For the United States, some of the best recent steps serve to save money, promote energy security and reduce air pollution. A good model is provided by rules from the Department of Transportation and the Environmental Protection Agency, widely supported by the automobile industry, which will increase the fuel economy of cars to more than 54 miles per gallon by 2025.

The fuel economy rules will eventually save consumers more than $1.7 trillion, cut United States oil consumption by 12 billion barrels and reduce greenhouse gas emissions by six billion metric tons ? more than the total amount of carbon dioxide emitted by the United States in 2010. The monetary benefits of these rules exceed the monetary costs by billions of dollars annually.

In a similar vein, recent rules from the Department of Energy are requiring greater energy efficiency from appliances like refrigerators, washing machines and small motors. For these rules as well, the monetary benefits dwarf the costs, and they include large savings to consumers as well as pollution reductions. There is a lot more to achieve in the area of energy efficiency, especially as technologies advance and continue to transform the once-impossible into the eminently doable.

The electricity sector is responsible for more than a third of greenhouse gas emissions in the United States. In this domain, any regulations must be carefully devised, as they were in the case of fuel economy, to ensure that they do not impose unjustified costs, especially in an economically difficult period. But just as in that case, it should be possible to work with affected companies to identify flexible and cost-conscious approaches, producing reductions while minimizing regulatory burdens.

As in the case of the Montreal Protocol, an effective response to climate change requires many nations to act. China is the biggest greenhouse gas emitter on the planet, and it must become a leader in international negotiations, not an obstacle. But smart initiatives from the United States may well be an indispensable precondition for international efforts.

For those who seek to reduce the risks associated with climate change, it is ironic but true that the best precedent comes from a conservative icon. The big question now is whether today?s Republicans will follow Reagan?s example.

Cass R. Sunstein is a professor at Harvard Law School and a former administrator of the White House Office of Information and Regulatory Affairs.

Source: http://www.nytimes.com/2012/11/11/opinion/sunday/climate-change-lessons-from-ronald-reagan.html?partner=rss&emc=rss

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