Ethical Issues Entailed By Economic Arguments Against Climate Change Policies.

Preface: Most arguments against climate change policies are short-term economic arguments of various types that almost always raise serious ethical problems. The following article by guest blogger Nicholas Krause is one in a series of ClimateEthics posts that look at ethical issues raised by economic arguments againts climate change policies. This post looks at three specific economic arguments that are frequently made against climate change policies and identifies ethical isues raised by these arguments. These arguments are climate change policies should be opposed because they: (a) increase fuel costs, (b) decrease GDP, and (c) destroy jobs. Other ClimateEthics articles on this topic include:

Ethical Problems With Cost Arguments Made In Opposition to Climate Change Policies: The Failure To Value The Harms That Will Be Caused by Doing Nothing.
Ethical Problems With Cost Arguments Against Climate Change Policies: Increased Costs May Not Justify Human Rights Violations
Ethical Problems With Cost Arguments Against Climate Change Policies: The Failure To Recognize Duties To Non-citizens.

I. Introduction
Ethical issues are everywhere. Perhaps the greatest ethical issue of the time arrives as a problem that has the power to change the planet. Climate Change is a grave issue that is facing the world today. This can be seen from evidence stated by the UNFCCC.

“The frequency of heavy precipitation events has increased over most land areas. Significantly increased precipitation has been observed in eastern parts of North and South America, northern Europe and northern and central Asia. There is also observational evidence for an increase of intense tropical cyclones in the North Atlantic since about 1970. Drying has also been observed over large regions, i.e. the Sahel, the Mediterranean, southern Africa, and parts of southern Asia.” (UNFCCC)

It is not a future problem to deal with; it is affecting people now and needs to be dealt with accordingly. There are several arguments that oppose action to limit the effects of climate change but perhaps none are more publicized (or argued) than those based on economic reasoning. This post will focus on the ethical issues of three economic arguments opposing climate change policy. These are ethical questions because they imply that there should be no action taken because of economic and cost arguments. The three economic arguments are increased energy prices, decrease of global GDP, and significant loss of jobs.

II. Three Economic Arguments

A. Increased Fuel Costs

The first argument of increased energy prices is being made by oil companies. The oil companies claim that due to the lack of cheap alternative fuels, the cost of energy will increase.

“Oil companies and industry -backed groups argue there aren’t good alternatives to gasoline. Efforts to lower carbon dioxide emissions from fuel use in the Northeast won’t have impact on global emissions and could raise oil prices.” (Snyder, 2010)

The oil companies have the most to lose if climate change policies are adopted. They profit from fuel for nearly every industry imaginable. The downfall of oil companies are the amounts of carbon dioxide being emitted from their product. The only concern oil companies have is the amount of profits they will lose if climate change polices are put into action.

“The Big Oil and Dirty Coal lobbies are working hard to stop reforms so that they can protect their enormous profits.” (Weiss, 2010)
These arguments are not based on factual statements. The oil companies are consumed by greed so make statements based on their best interest without regard to the consequences they will have on others. This brings up the issue of ethics within the decisions of the oil companies to reject climate change policies. The oil companies are making their arguments on utilitarian grounds meaning that the most favorable decision is the one in which happiness is experienced by the most people. However, even within this argument are violations of utilitarian principles. This boils down to being a simple calculation without regard to keeping anything sacred. They are making the statement that the benefits of using oil (keeping energy costs “low”) outweigh the costs that consumption will have. In this, they are saying that allowing warming to continue and have devastating effects on the planet and its inhabitants is an acceptable cost of keeping oil as the main source of energy. This is ultimately taking life without consent. The oil companies are benefiting from loss of human life. This may seem indirect but it is exactly what is happening. Michael Sandel comments that the right thing to do is not simply a matter of calculating consequences by using cost and benefit analysis. He suggests that morality has a greater meaning. It pertains to the proper way human beings are to treat each other (Sandel, 2009). The oil companies are implicitly suggesting that a proper way to treat other humans is destroying their lives for the singular purpose of gaining profit. This is not how people are meant to be treated. All people deserve a greater respect than to be abused by companies with motives that disregard human life. Sandel suggests that the biggest weakness of utilitarianism logic it that it fails to respect the individual rights (Sandel, 2009). The case of climate change is a perfect example of this weakness. The oil companies are disregarding individual rights by continuing to fight policy regarding carbon dioxide emissions based on the argument of increasing energy costs.

Individual rights may seem like a loose term but there is a document known as the Universal Declaration of Human Rights which outlines rights of all persons.

“All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.” (Article 1)
“Everyone has the right to life, liberty, and security of person.” (Article 3)

These rights are being violated by the oil company’s rising price argument. They are using people as a means to and end thereby violating Immanuel Kant’s theory of rights. Sandel writes about Kant’s philosophy that morality is not about maximizing happiness or some other end, such as increased profit. Morality requires that persons are to be treated as ends in themselves.

“For Kant, respecting human dignity means treating persons as ends in themselves. This is why it is wrong to use people for the sake of the general welfare, as utilitarianism does.” (Sandel, 2009)

Kant makes the argument that we are not to use people for personal gain. The oil companies are using the argument of rising energy costs as a way of convincing people that climate change policy is not a good idea. They are completely rejecting scientific literature and using public ignorance of the subject in order to maintain a high level of profits. This method is a complete failure to acknowledge Kant’s ideals of not using people as a means to an end.

Thus, the economic argument of rising energy costs brings up several ethical issues. First, it brings up the issue of the proper way to treat other people. Next it violates the idea of individual rights based upon the Universal Declaration of Human Rights. Finally, it contests Kant’s principle of not using people as a means to an end. Instead persons should be treated as ends in themselves because everyone deserves at least that much.

B. GDP Arguments

The next economic argument opposing climate change policy is based on cost in terms of global Gross Domestic Product (GDP).

“The IPCC’s worst case scenario sees a roughly 4oC warming over the next century, explains Manzi, which would cost about 3 percent of global GDP. By contrast, using less energy, “substitute[ing] higher-cost sources of energy for fossil fuels, “and paying for offsets would cost about 6 percent of world GDP. Thus, “the expected economic benefits of emissions mitigation do not cover its realistically expected costs.” (Horn, 2010)

The argument being made here is that there should not be action on climate change because the cost of action regarding percent of GDP will exceed the cost (GDP) of inaction. This claim is not only debatable on factual grounds but on ethical ones as well. Some models have the climate warming as much as 9oC over the next century. This would surely affect the cost in terms of global GDP.

Thus uncertainty questions are brought into light within the model. It is known how temperature increases can affect the planet but some questions arise in the degree of change that will be experienced and on what time scale this will happen. The harms being identified in the argument are only economic harms. They are not taking into account the other dangers that will appear. It is still the moral responsibility of persons to counter uncertain ends because of the devastation that could be caused. This brings up the question of rights. Human rights are being violated because there are greater harms at risk than those identified in the argument. People are therefore not given the opportunity to determine what’s right for them. Kant writes that all persons are capable of reasoning. By practicing this reasoning, people can learn morality (Sandel, 2009).

The GDP argument is not giving all the facts so it is impossible to use reasoning as a guide to a moral decision. Is it moral to allow a possible catastrophic event when something could have been done to prevent it?

The outcomes of allowing the climate to continue warming could prove disastrous. As stated in the opening paragraph, the effects are already being felt around the world. These effects are not being made known in the argument. Horn is implying that the effects of climate change are not worth the amount of money that will be saved by allowing them to take place. To what degree does this extend?

Maybe the changes must be of a certain proportion/disaster in order to be allotted sufficient funds to fight the problem of global warming. Sandel shares in his book Justice:

“Any morally defensible policy toward smoking would have to consider not only the fiscal effects but also the consequences for public health and human well-being.” (Sandel, 2009)

This same idea can be brought up in regards to climate change. Those posing the GDP argument have the fiscal effects figured out (at least in their minds) but have failed to take into account (accidentally or purposefully) the consequences of public health and human well-being. These two factors will be altered with the climate continuing to change as it has and has been predicted.

The GDP argument is also in question because it is utilitarian in nature and is therefore under the subjection of all utilitarian market flaws. Utilitarian theory states that the free market must promote the general welfare meaning, that both parties participating must increase utility without harming anyone. In the case of oil, the buying and selling of oil is harming people and therefore not promoting the general welfare. The emissions from gasoline and other oil products are harming the Earth system and thereby affecting the public in extreme and dangerous ways. Free choice may also be in question in the free market. Sandel poses the concept of tainted consent saying that choices made in the free market may be due to pressures being applied form unforeseen circumstances. These pressures lead to choices that are not “free”.

The idea of higher goods is also called into question in the free market system. An example of this is emissions trading. This is the buying and selling of carbon credits to be able to release emissions into the atmosphere. This implicitly outlines the buying and selling of atmosphere. The atmosphere is being made into a commodity. This is one example of a higher good that is being sold in the market that should not be. The atmosphere is not owned by one person and can’t be bought and sold like a piece of property as if it has an owner. It is of a higher norm and should therefore not be considered utility.
The principle of distributive justice also comes up in the free market.

Following the emissions trading example, the countries and companies with the most money are going to buy the most carbon credits. This still leaves the poor countries poor and the rich countries will still be able to emit large amounts of carbon because they have the money to buy all of the credits. Distributive justice calls for a fairness of credit allotment. Without this rich countries will continue to emit mass amounts of carbon.

The distribution of harms is also a large issue in this topic. Countries like the United States are responsible for a high percent of carbon output but are not feeling the effects the same way as countries in Africa. These countries are experiencing horrific droughts and do not have the resources to cope with these harsh climate changes.

It is now clear that the economic argument of cost increases (in terms of GDP) has ethical repercussions. The first of them deals with the issue of uncertainty and what should be done in the face of it. The next issue deals with the shortcomings of the free market based on utilitarian ideals. Each of these outlines ethical issues of the GDP argument and why it is not a sound approach to oppose climate change policy.

C. The Job Loss Argument

The final economic argument opposing climate change deals with job losses that would take place if certain regulations were to be passed.

“The National Association of Manufacturers says that the price tag to implement cap-and-tax could be upwards of 2.4 million lost jobs by 2030.” (Sensenbrenner, 2009)

Many of these jobs would be lost in the coal and other energy industries because of the acts to control and regulate emissions and also move to clean energy technology. However, by making the switch to clean energy technology many jobs would be created. In a brief by Goodstein on Climate Policy and Jobs, he states that environmental spending would offset the losses by creating new jobs (Goodstein, 1997). He later states that the one industry that would be greatly affected would be the coal mining industry. So, besides having factual problems, this argument also brings up ethical questions.

The first ethical issue is concerns the duties and obligations to other people. The claim of the manufacturers is concerned only with job loss and not looking at the big picture of human welfare. It also fails to recognize human rights when making this claim. Referring to the Universal Declaration of Human Rights, it is easy to see that many of these are being violated by the job loss argument. All people have a right to life and this argument fails to acknowledge this right. It does so by ignoring the harms and costs to society that will be imposed if climate change is allowed to continue at the present rate.

III. Conclusion

In conclusion, the economic arguments of increased energy prices, decreased global GDP, and loss of jobs all have ethical issues associated with them. The energy price argument brings up violation of human rights. The decreased global GDP argument calls upon ethical issues of the free-market flaws, human rights and uncertainty. The loss of jobs dilemma is countered by using similar arguments from the first two arguments. Examining all of these cost arguments, it can be seen that they ignore human rights and duties and obligations to others. Thus, all of these arguments have ethical issues. It is because of this that the debate is so sensitive. In order to make correct and educated decisions that affect billions of people, the factual as well as the ethical issues must be examined at all angles. This is the only way a proper and ethical decision concerning climate change policies can reached.


Nicholas Krause
Meteorology Student
The Pennsylvania State University

IV. References

“Current Evidence of Climate Change.” United Nations Framework Convention on Climate Change. Web. 22 Feb. 2011.

Goodstein, Eban. “20 Environmental Regulations Create Jobs and Make American Corporations More Competitive.” Project Censored. May 1997. Web. 22 Feb. 2011.

Horn, Heather. “Climate Change: Cheaper to Deal with It Later?” Web log post. The Atlantic Wire. 06 July 2010. Web. 21 Feb. 2011.

Sandel, Michael J. Justice: What’s the Right Thing to Do? New York: Farrar, Straus and Giroux, 2009. Print.

Sensenbrenner, Jim. “Climate Costs Would Add to Mounting U.S. Debt.” Web log post.Copenhagen Insider. 17 Dec. 2009. Web. 21 Feb. 2011.

Snyder, Jim. “Energy Companies Face Individual States Taking Action on Climate Change.” Web log post. The Hill. 04 Jan. 2010. Web. 23 Feb. 2011.

“The Universal Declaration of Human Rights.” 31 Jan. 2011. General Assembly of the United Nations.

Weiss, Daniel J. “Oil Companies and Special Interests Spend Millions to Oppose Climate Change.” Grist. 27 Sept. 2010. Web. 22 Feb. 2011.