10/08/2021
Been having lots of discussions about climate change in some Econ circles in the lead-up to the new massive, worse-than-anticipated, UN report: https://apnews.com/article/asia-pacific-latin-america-middle-east-africa-europe-1d89d5183583718ad4ad311fa2ee7d83?utm_source=morning_brew
Economists fall into one of two philosophical camps: The first are the Malthusians who believe that it is highly irrational for humanity to live and govern as though there are no natural limits, or catastrophic negative externalities, to the exponential growth we've experienced over the last two centuries.
The second, larger group are the Boserups who believe that technological advancements have and will allow humanity to eternally avoid the negative externalities created by our growth and resource consumption. These people believe things like green energy and carbon capture will save us before irreversible global climate change catastrophe occurs.
I tend to fall into the former camp. The problem with the latter is that there really isn't any data to support it. In regards to human history, capitalism in its current form is only a couple hundred years old. And the human population has only reached a size able to inflict planetary altering consequences very recently (the last two centuries). The only thing that Boserups have to point to is that technological advancements allowed us to avoid the global famine/food shortages threat that originally inspired the Malthus philosophy.
But learning how to use a growing population/labor force and technological advancements to produce enough food to sustain that population is NOT the same as reversing the power producing/consuming habits that have become synonymous with human culture in the developed parts of the world AND then walking back all the negatives to the biome we've already inflicted and are already feeling. It becomes all the harder when all the incentives built into the very fabric of our capitalistic cultures are fighting against doing that in a timely manner.
The thing about relying on The Invisible Hand, aka market forces, to save us from the poor behaviors threatening our continued prosperity is that those market forces only react after catastrophic failure occurs.
We, as Americans, could've let our financial sector fail in the crash of 2008. The fallout would've destroyed us economically, as well as our global geopolitical footing, for an entire generation. Millions of Americans would've lost everything. The Invisible Hand approach would've let that happen because it relies on forcing negative behaviors to experience the negative consequences they elicit so that new, better systems can be put in place.
Obviously we didn't allow that to happen as we all have a vested interest in not spending a generation rebuilding from financial ruin, a la Germany after WWI. So we bailed the financial sector out (an investment that's already paid for itself due to low inflation, low interest rates, and economic growth). And implemented new stress-test regulations to prevent a similar crash from occurring - which held up well during their first real test, the pandemic shutdowns.
Back to the current climate threat. Relying on The Invisible Hand to react to climate change means first letting our current behaviors and trends cross that same metaphorical threshold of no return to ecological ruination, because only then will the incentivation to change our ways be strong enough to override centuries-old norms.
But who is to say once that ruination occurs, that it will even be theoretically possible to undo it, let alone that we'll have the technological ability to even try? Some things can be undone - a destroyed city or building can be rebuilt, sure. But other times, there's no putting the toothpaste back in the tube. Once ocean currents and glacial ice shelfs are changed, there's no guarantee they can be unchanged without waiting millennia. And those things affect our entire global climate and the flora/fauna it can support. So it's kind of important.
Is that a risk we as a people are willing to take? My favorite hot-take about the topic in the tweet below suggests it is. And my hunch is that the humans alive hundreds of years from now will condemn us, and our culture for it. Because they'll likely still be living with and cleaning up from the after-effects of our mess.
