Monday, June 25, 2018

Repugnance towards carbon emissions trading

Here's a report of an experiment motivated by a desire to understand the repugnance felt in some quarters towards emissions trading as a way to reduce greenhouse gas emissions and other pollutants.

Clean up your own mess: An experimental study of moral responsibility and efficiency
Michael Jakob, DorotheaK├╝bler, Jan ChristophSteckel, and Roelvan Veldhuizen
Journal of Public Economics, 155, November 2017,  138-146

It begins with a gripping account of some of this repugnance (which it uses to motivate an experiment of a more abstract sort):

"emissions trading schemes, have repeatedly faced criticism from various sides. In economics, such criticism has pointed out that emissions trading schemes are likely to face real-world constraints (e.g. related to monitoring requirements and the definition of baselines on how emissions would evolve in the absence of the scheme) that may lower their environmental effectiveness (Wara, 2007; Schneider and Kollmuss, 2015) and economic efficiency (Michaelowa and Jotzo, 2005; Krey, 2005). More fundamental criticisms have been raised by philosophers, climate scientists, environmental activists, and the Church (see for example Caney, 2010 and Page, 2011 for discussions of such criticisms). These types of criticisms often rely on a moral critique equating the trading of emission permits with the medieval practice of paying money to be cleared from one's sins, as put succinctly in the Earth Island Journal (Smith, 2009):
‘Congress's new cap-and-trade scam would put the Church's indulgence scheme to shame.’

In his book ‘Storms of my Grandchildren’, the prominent climate scientist Hansen (2010) expresses a similar concern:
‘A successful new policy cannot include any offsets.[i.e., emissions trading] […] The public must be firm and unwavering in demanding “no offsets”, because this sort of monkey business is exactly the type of thing that politicians love and will try to keep. Offsets are like the indulgences that were sold by the church in the Middle Ages’.

A related argument sees carbon offsets that are used to compensate for greenhouse gas emissions as a way to ease one's conscience without changing behavior. As George Monbiot (2006) writes in “The Guardian”:
Our guilty consciences appeased, we continue to fill up our SUVs and fly round the world without the least concern about our impact on the planet … it's like pushing the food around on your plate to create the impression that you have eaten it’.

The Catholic Church has also taken a critical stance on emissions trading, most notably in Francis's (2015) widely discussed encyclical ‘Laudato Si’:
‘The strategy of buying and selling “carbon credits” can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors’. (Para. 171)

These statements capture the two types of criticisms of emissions trading established by Page (2011). First, emissions trading may fail to bring about long-term behavioral change required for successful climate change mitigation and undermine intrinsic incentives for environmentally friendly behavior. Second, it may violate non-consequential objectives of justice and fairness (see also Caney, 2010).
Hence, there appears to be a strong presumption that monetarily compensating for an environmental externality is not morally equivalent to changing one's behavior to avoid the externality, even if both courses of action result in identical outcomes. This raises the question of why people object to such compensation-based mechanisms. In this study, we hypothesize that people may have a preference to ‘clean up their own mess,’ that is, prefer to personally eliminate environmental externalities they are responsible for."

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