I’m preparing a course on climate change ethics and as a part of this I am reading again John Broome’s fascinating Climate Matters – Ethics in a Warming World book. One thing Broome does in this book is to offer a new third alternative in addition to the familiar options of doing nothing and bearing the costs of climate change mitigation and adaptation. He claims that this alternative is not morally ideal, but it is possible and perhaps more likely to gain political support for the efforts that are needed for avoiding catastrophic climate change outcomes. Here I want to quickly explain all of this and then ask a question about this possibility.
In the chapter 3 on the economics of climate change, Broome explains the familiar idea of how the greenhouse gas emissions are externalities. This means that these emissions harm some people and that compensating for this harm is not included in the price of the activities that cause the emissions. As a consequence, the benefit the emitter gets from the emission is less than the harm suffered by the receivers.
Externalities entail waste. That is, in this situation, some people can be made better off without making anyone worse off. If the emitter does not emit the relevant units of greenhouse gases, the receivers can compensate her for this in full and yet be better off than they would have been with the emission. This means that without the emission no one will be worse off and some people will be better off than in the emission scenario.
So, it looks like the business as usual model in which emissions continue is inefficient. It’s also unjust in many ways – the emitters continue to harm the receivers and this harm is serious, non-accidental, uncompensated for, done for one’s own benefit, there is no reciprocity and so on.
At this point, Broome offers two better alternatives to which we could move: a) efficiency with sacrifice and b) efficiency without sacrifice. Efficiency with sacrifice is one of the situations situation in which the full social cost of emissions is built into the price of the emission activities, which is to say that the benefit you get from emissions will equal the amount of harm the emission causes. This would mean that the activities that cause greenhouse gas emissions would be much more costly for us and that we would need to bear those costs in full. As a consequence, we – as the current generation – would have to make a significant sacrifice for the sake of the future generations being better off (because of less climate change and more adaptation). This model is the ideal that is pursued (often unsuccessfully) in the current global political process through the cap and trade mechanism.
However, Broome also offers a third alternative, which he calls ‘efficiency without sacrifice’. Under this alternative, we again build the full social cost of carbon into the price of the emission activities. This will create a significant cost for us. However, we then also transfer resources from the future generations to us in order to compensate ourselves for the initial cost. If this is possible, under this alternative we will end up being just as well off as we would be with the emissions and the future generation will still end up better off than if we emitted.
How is this possible? Here’s the full quote from Broome (p. 44-45):
“As things stand, the current generation will leave a lot of resources to people who are not yet born. We shall leave artificial resources in the form of economic capital: buildings, machinery, cultivated land, irrigation systems, and so on. We shall also leave natural resources, since we shall not use up all the natural resources that are in the ground. If we make the sacrifice by emitting less greenhouse gas, we can fully compensate ourselves by using more of those artificial and natural resources ourselves. We can consume more and invest less for the future. We shall leave less of those resources to future generations, but those generations will end up better off on balance because they will suffer less from the greenhouse gas we leave in the air.”
Broome admits that this alternative is worse than the efficiency with sacrifice scenario. It means less investment which means less well-being in total given that those investments could continue as sources of well-being for a long time. It also means that we, the current generation, are compensated for not committing a serious injustice on the future generations by harming them. But, from the perspective of the future generations, this is like paying the mob protection money so that the mob itself doesn’t harm you.
Despite this, Broome thinks that the efficiency without sacrifice option is the next best thing and also the alternative which may be the best option we can reach in practice. It doesn’t seem like there is enough political will to pursue efficiency with sacrifice. However, politicians and people generally might be much more willing to act against climate change if they had to make no sacrifices for doing so.
Here’s my question (and I accept that not understanding something isn’t really an objection): I am still not quite certain about how the efficiency without sacrifice is possible. We are told that we are compensated for the costs of emitting less greenhouse gases – for the ways in which this makes our lives worse. This compensation comes in the form of artificial and natural resources that we can use to improve our lives. These resources would have been saved for the future generations but now we are allowed to consume them as a compensation for fewer greenhouse emissions.
So, what I don’t get is how we can consume more of these artificial and natural resources and at the same time emit fewer greenhouse gases. Doesn’t consuming more artificial and natural resources in itself constitute additional greenhouse gas emissions? How does this work in practice? What are the goods and benefits we could give to ourselves to compensate for the fact that we are not allowed to drive, fly, heat our houses, leave lights on, eat meat, have huge TVs and so on? I can think of some concrete examples: you could, for example, use some of the money you are saving for your child’s education for insulating your house or putting up solar panels. But, such examples, seem too small scale to compensate for all the changes we have to make to our lives.
In principle, things look easier. Various estimates put the mitigation and adaptation costs at around 1-3% of GDP. Presumably we save and invest more yearly to help the future generations to have better lives. So, there should be enough resources. However, in practice, I am just less sure what the concrete ways are in which we can compensate ourselves for the seemingly radical changes we have to make to our lives that would not themselves cause greenhouse gas emissions. How can we improve our lives back to the level we start from if we take the necessary actions such that emissions are still radically cut? How can we consume more resources to improve our lives and yet cut emissions? This is something I’d like to see more detail on. Otherwise, it seems like we do have to make sacrifices to reach efficiency (which I think we should, personally) and that Broome’s third alternative is merely a theoretical possibility. I do hope that there is a simple answer to these questions – I hope I am missing something.