Cutting emissions. A group task

The CEO of NRG Energy says his company is willing to reduce emissions, but only if all the other power companies do the same, else they’d take a financial risk for doing so – which seems a Capitalist Dilemma indeed – cooperation and altruism are what’s needed, but are not traits that capitalism rewards.

Paul Krugman riffs on this in the NY Times

It’s in the interest of most people (and especially their descendants) that somebody do something to reduce emissions of carbon dioxide and other greenhouse gases, but each individual would like that somebody to be somebody else. Leave it up to the free market, and in a few generations Florida will be underwater.

The solution to such conflicts between self-interest and the common good is to provide individuals with an incentive to do the right thing. In this case, people have to be given a reason to cut back on greenhouse gas emissions.

He says taxes on emissions and emission permits have been successfully used to lower sulfur emissions, but that international agreements are needed to stop global warming. True, but we also need to give people a positive reason to change (a reward) rather a punishment (taxes and permits) if they don’t. The carrot always works better than the stick.

One comment

  1. What we have in place now are tax credits for upgading to energy-efficient equipment and property. That’s not a bad start. But it’s offset because energy costs are artifically low– specifically, the actual cost to the nation is not reflected in the price, making it more cost-effective to burn coal than to upgrade to solar.

    Thee capitalist dilemma is real: if CA, for example, taxes or caps emissions and TX doesn’t, guess where the factories will go? It’s true to a more limited extent on the international scene, too, where certain poor countries could become to dirty industry what the Caymens are to banking. But because of the limits of distribution and skilled labor, you can’t build coal power plants in Africa to supply NYC.

    The first governmental step, as I see it, is to raise energy costs to an appropriate level. That alone will trigger not only clean investment but new technology. Additional steps, like research grants, will probably be needed. But nothing happens as long as it’s cheaper to pollute than change.

    We don’t have any leaders with the cajones to tell the American public that they’re going to have to pay more at the pump. And none are currently running for office. Unless something changes, the only way this will happen is if we the people (or at least a signifiant and vocal minority) demand it. That means organizing and educating.

    But so far, Krugman appears to be right: we all want to let someone else do it.

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