The Future Is at Stake

An orange or a green planet? That is the question.

I like my politics. A lot. Usually, election time is my favorite time of every other year. I became a US citizen in 2008 and recall casting my first vote for president with our newborn baby boy strapped to my chest. This year, however, I would like for someone to knock me out and wake me up when it’s over.

The spectacular implosion of the Republican Party over the past six years comes at a precarious point in our planet’s history. And this has grave consequences for energy and environmental policy locally, nationally and globally. Tomorrow’s choice for president is portrayed in many places as win-or-lose choice by both sides. I would argue that the environment is likely going to lose no matter who wins the presidential race. The question is how bad things are going to get.


Let’s back up for a second. The past eight years of the Obama presidency have brought monumental change for the better in the environmental and energy arena. We have made significant progress on fuel economy standards, emissions standards for power plants, the introduction of a real social cost of carbon into federal rulemaking, the rapidly increasing penetration of renewables on people’s roofs and on the people’s plains and in their valleys. President Obama will go into the history books as the first African American president. I would argue that he will be remembered by many future generations as the Greenest president this country has ever had.

Many of the recent regulations are being passed in the form of command and control with significant flexibility built in. Still, these are not the economists’ preferred choice. Yet, team Obama got it done. He had great counsel during his eight years in office, helping design programs that built in flexibility where possible. Joe Aldy, Ann Wolverton,  Nat Keohane, Billy Pizer, Michael Greenstone, Arik Levinson, Matt Kotchen, Glenn Sheriff, Sheila Olmstead, Gilbert Metcalf, and Kenny Gillingham are just a few of the brilliant environmental economists that spent time in the White House and at Treasury helping design and implement smarter and more efficient policies. I do note a curious absence of Berkeley environmental economists, but maybe Secretary Clinton will deck the halls with Berkeley folks if elected. We’re here for you Madam Secretary.

Maybe the most significant achievement and point of departure is the signing of the Paris accord. No previous administration has managed to credibly commit the US to meaningful greenhouse gas emissions reductions. Clinton (Bill, President) signed the Kyoto agreement, knowing full well that Congress would never ratify it. Under Obama, we signed an agreement that does not need to be ratified by Congress as the reductions can be achieved through agency actions. And this is where the trouble begins.


If Tuesday results in a Trump presidency, we would probably get Dennis Rodman as Secretary of Energy, Tila Tequila as EPA Administrator and Peter Thiel as Secretary of Treasury. Ted Nugent at Interior would be another obvious appointment. All jokes aside, a Trump administration could significantly harm federal regulation by simply gutting the agencies in charge of implementing and enforcing them. I am not a lawyer, but the amount of damage that could be done to regulations, which are only a first step in themselves towards “solving” the climate problem, could be massive under a Trump presidency. I doubt that the majority of Americans could identify the EPA administrator or Secretary of Energy, but a lot is riding on these four shoulders.

But all will not be fine if Secretary Clinton becomes President Elect Clinton on Tuesday. If the obstructionist behavior on the Supreme Court nomination is any indication, there is a good chance that the opposition in Congress will lay down thorns on the path to a greener least cost regulatory path to solving our energy and environmental problems. The Republican Party, which embraced Milton Friedman’s ideals of markets, through obstruction would leave President Clinton little choice other than pursuing command and control regulations in the same way president Obama has. This is going to be costly. Marginal abatement cost curves are upward sloping, meaning that some approaches to abatement will cost a lot more than others.   It is critical that the world find the lowest-cost ways to reduce greenhouse gas emissions so that all economies, especially those in the developing world, can continue to grow.

The climate folks tell us that we have to head into a largely carbon free future fast: 80% emissions reductions in a bit over 30 years. That is a revolution not an evolution of the energy system. Doing this via command and control is economically reckless and irresponsible, in the same way that doing nothing about the problem is.

I realize that academic economists know as much about passing and implementing actual environmental policies as Albert Einstein knew about running a large Hadron Collider. It takes a village of lawyers, policy wonks and coalition builders to get things done. But there is no arguing with the basics: price-based policies are the least cost way of reducing pollution. Your political views are as relevant to that statement as they are to whether gravity exists. This is science, not faith.

So, where do we go? If the GOP is smart in a Clinton presidency, it reinvents itself and reclaims its territory, which should be market-based regulation. Once one accepts that environmental and climate regulation is here to stay, their push should be on efficiency. Continuing to obstruct at the federal level will surely amplify the polarization of the American people. In order to solve the significant problems facing us, which are broader than those at the heart of this blog, we need smart federal action. Leaving environmental policy up to the states will be costly (see Lucas’ blog on the fate of market based policies on the west coast), deeply flawed (recognizing that all regulation is imperfect), and wholly inadequate for addressing global problems like climate change.

This economist is worried about what happens on Tuesday. We have much work to do to solve the problems facing us. And we can only do it if we come together and engage in a smart, civil and engaged fashion.


About Maximilian Auffhammer

Maximilian Auffhammer is the George Pardee Professor of International Sustainable Development at the University of California Berkeley. His fields of expertise are environmental and energy economics, with a specific focus on the impacts and regulation of climate change and air pollution.
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6 Responses to The Future Is at Stake

  1. SRK says:

    Actually, the Republican Party is in the best position since 1920 in terms of the elected officials in the Senate, House, governorships and state legislatures.

    It is fair to say Trump has divided the party. In the unlikely event Trump should win, the Republican party may split. If he loses, well, differences probably get papered over, with much depending on how a Clinton presidency evolves.

  2. What do you think about the possibility of a thoroughly disorganized Schumpeter-style end-run by decentralized, ultra-low-carbon energy technologies, backed by storage (perhaps in a large scale commercial form), and grid defection mechanisms like, or Sonnen Community? (I’m not championing the latter companies specifically, but, rather, the engineering patterns of their ideas.) This would leave a chunk of the population tied to an ever more expensive grid, unfortunately probably including low income people and many cities, as people defected in their need for energies from it. The regulatory capture which utilities and energy companies have managed seemingly works best against large scale zero carbon projects, like community solar+storage for multifamily and low income. Relatively wealthy people can put up their own capital, and there are entrepreneurs and technologists who are seemingly interested in going after that market.

    Eventually, I see the main grid changing itself to the decentralized version it needs to become, but this will be much slower than it could be if utilities with willing partners in state governments dig in. Even Massachusetts, despite its reputation as being supportive of decentralized energy, is sitting on a knife edge, with the possibility of making a 50+ year commitment to natural gas looming over the next couple of years. If it does, that will kill its Global Warming Solutions Act, or have to, since after 2030, to comply, natural gas infrastructure needs to begin to be retired to meet the GWSA limits, even if it hasn’t achieved its depreciation life.

  3. pbradyus says:

    It remains a complete mystery that Haas Energy Institute members seem to have their heads in the sand regarding the new warming and climate data now available. The new measurements make their pieces out-of-date, to put it kindly, and needlessly alarmist!
    To begin with, three independent analyses [1] of the Satellite data show very moderate temperature rises in the atmosphere and down to the Earth’s surface – an average of 0.11 degrees C per decade over the past 37 years of increasing [2.1%/yr] CO2 emissions! At this rate the GW climate-crisis temperature of 2.0 C above preindustrial values would be reached in 100 years of such CO2 emissions. [We are now close to 0.9 C above preindustrial values.]
    2.1%/yr is a factor of 330 in 100 years, much beyond estimated possible oil and gas reserves, and also much beyond economical oil and gas as renewables gradually replace them. A GW climate-crisis is very unlikely!
    Mr Auffhammer notes that “The climate folks tell us that we have to head into a largely carbon-free future fast: 80% emissions reductions in a bit over 30 years. That is a revolution not an evolution of the energy system.” It is also nonsense! Has he not read the latest IPCC Climate Change 2014 Report? It asserts that about 60% of annual CO2 emissions are taken up by our greening Earth and the oceans. So it is much easier than what he claims: something like a 50-60% reduction taking something like 50-60 years, and we begin taking CO2 out of the atmosphere and begin cooling. We have plenty of time to do that. We do not need carbon taxes, etc. Economics with take us there with little pain to most citizens.

    • mcubedecon says:

      pbradyus: Two problems with your analysis. First you assume a linear relationship between CO2 emissions and temperature. Given that the warming appears to be accelerating, linear would represent the lower bound on potential warming. (And this ignores other GHG emissions such as methane.)

      Second, the climate scientists have been very clear that there is probably a limit on CO2 absorption capacity of the oceans and plant life. And that says nothing about the other GHG gasses (again). So we can’t assume that will go on indefinitely.

      • Paul Brady says:

        Mcubedecon: This may be a bit terse and erratic as the IT from Puerto Vallarta can be that way! Please try to access the IPCC AR5 report “Climate Change 2014 – Synthesis Report”. On page 3 are 4 plots – most from around 1850 to 2011. You can see that temperature and CO2 are not linearly related or even highly correlated. EG: from about 1945-75 T is falling slightly while CO2 is increasing. Then they rise together until 1998. T has flattened since then, at least until 2016 when the global warming from El Nino popped T about 40 times expected CO2 warming!

        So warming has not been accelerating. Very recent data suggests that Chinese emissions may have plateaued, and are expected to decline next decade. India remains a problem, but Pakistan is getting Chinese assistance to reduce emissions.

        As noted above surface warming is about 0,12 C per decade; the atmosphere from satellites a little less; ocean buoys give 0.11, but have a shorter history.

        We have a greening planet, but I agree this has limits, as does the ocean as a CO2 sink as its surface warms. We must replace emission sources with renewables, and are doing so apace!
        I remain optimistic!

        Best wishes,

        Paul Brady

  4. pbradyus says:

    I thought the latest IPCC Climate Change 2014 Report – attached – presented a promising outlook.. The data shows a moderate warming rate, and about 60% sequestration of CO2 in Natural sinks. And more recent data [2014-2016] show the growth of global emissions has moderated.
    The US and EU are doing their share by reducing carbon emissions 1-2%/yr over the past decade. China is pivoting from manufacturing to a more consumer -driven economy, and also, under pressure from citizens and Asian neighbors, has been switching from coal to natural gas [pipelines to Russia and LNG terminals], nuclear, solar, etc. CO2 output there has declined slightly in the past couple of years.
    This has helped reduce the most recent global growth of emissions from an average of 2%/yr to less that 0.5%/yr according to the Global Carbon Project. In Pakistan China has just finished a large nuclear plant and is building NG pipelines there.
    If India follows China, global emissions could peak and begin to decline in a decade or two.
    On page 3 the IPCC Report presents – top panel – their “globally averaged combined land and ocean surface temperatures”. These show an increase of about 0.12 degrees Celsius per decade from about 1960-2013 when carbon emissions, mainly CO2, increased rapidly – see bottom panel d.
    There have been questions about the relatively sparse land-surface stations, and corrections for heat-island effects, etc. However, the above IPCC data have been corroborated, within uncertainties, by three independent analyses of satellite data, which have been available only since the end of 1978.
    For example, the UAH analysis found 0.11 C per decade up to early 2015 [preprint] but the [recent] subsequent strong El Nino raised the global average to 0.12 in the article recently accepted for publication! The El Nino warming that year was about 40 times that from carbon!
    Continuing moderate warming rates would push the GW climate-crisis marker of 2.0 C to almost a century away. This gives us time to take reasonable measures with minimum impact on our economy. The predictions of most climate models over-warm the Earth on average by factors of ~ 2-3.
    In the Climate Change 2014 Report, page 4, it is noted that since 1750 only about 40% of CO2 emissions have remained in the atmosphere. Lloyd helped me verify this for historic and for more recent, 1950+ emissions, – compare panels c and d on page 3. So about 60% of emissions is sequestered in CO2 sinks on land [in greenery, etc.] and in the oceans.
    This helps make the path to cooling easier and quicker, and which should be achieved long before the end of this century.
    Panel b on page 3 shows average sea-level rise of 2-3 cm per decade. The large GW of 8-10 C which ended the last glacial ice age 10-15,000 years ago is responsible for a large part of this rise. So, unfortunately, the melting, etc., will not stop with global cooling. [Historically, CO2 declines have been associated with the beginning of glacial ice ages!]

    Can’t attach: but on web: Climate Change 2014 – Synthesis Report – Summary, etc.

    This by the UN’s IPCC, the climate merchants, if you like, who promote as much as possible an alarmist view dupporting their vested interests, fame and fortune, even if the data says the opposite – wierd! Also, they never compare the model predictions against the data. The models ever-warm the globe by factors of about 2-3!

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