Category Archives: climate change and markets

The Ethics of Carbon Cap and Trade Continued: Going Deeper On Our Original Analysis

Posted on by

I. Introduction.

This post continues exploration of ethical issues raised by the numerous carbon cap and trade regimes that have arisen or are under consideration around the world.

One of the happy surprises of publishing ClimateEthics is that occasionally we get comments on our entries that raise very important and thought-provoking questions about our initial ethical analysis. This is a response to helpful comments by Robert Sullivan on our recent entry on the Ethics of Carbon Trading. This post originally appeared at: http://rockblogs.psu.edu/climate/2010/06/ethical-issues-raised-by-carbon-cap-and-trade-regimes.html. The section numbers referenced below refer to sections in the original article. In that article, ClimateEthics examined ethical questions that arise in cap and trade programs. These ethical questions fell into the following categories: (a) Justice of the Cap, (b) Creating Property Rights in the Atmosphere, (c) Environmental Effectiveness, (d) Distributive Justice, and (e) Procedural Justice

In the last post, ClimateEthics explained that the purpose of the analysis was not to resolve all the many ethical issues raised by cap and trade but to encourage further exploration of these ethical issues. Thanks to the comments of Robert Sullivan, this post attempts to go deeper on some of the issues raised in the earlier post with the goal of continuing the exploration of the ethics of cap and trade regimes.

II. Specific Issues

1: Justice Of The Cap

In the original post, ClimateEthics argued that if the total society-wide cap, before it is allocated among emitters within the jurisdiction of the government allocating the cap, is less than the government’s fair share of safe global emissions, then the cap is not environmentally just particularly to those who are vulnerable to harsh climate change impacts. We also claimed that most existing cap and trade regimes could be accused of being insufficient as a matter of justice.

A. Comment -Mr. Sullivan says:

The first issue is justice of the cap. I agree with you that the world is not doing nearly enough to even put us on a pathway to avoiding catastrophic climate change let alone following that path. However, I don’t see a failure of caps being strict enough as an indication of the inherently unethical or unjust nature of cap and trade or emissions trading per se. Without having read any of the references you include on countries’ obligations, I am not sure I agree with the statement “many cap and trade regimes do not derive the quantity of the cap from these international obligations”. There is an international obligation under Article 2 of the UNFCCC to prevent “dangerous anthropogenic interference with the climate system”, and this is further articulated in the QELRCs set out in the Kyoto Protocol (see the first part of Art 2 of the UNFCCC which links into the KP, and also note the clarifying text at the end of Art 2 around also ensuring sustainable development). While I agree that the Kyoto caps are insufficient to meet Art 2 of the UNFCCC over the long term, the Kyoto caps do indeed reflect the most detailed set of international obligations with respect to GHG caps to date. I would argue these are the dominant obligations of countries under public international law, and the cap and trade system set up by the Kyoto Protocol complies with these obligations as does the European Emissions Trading Scheme. However, I also acknowledge that here you may be drawing a distinction between a countries legal obligations under public international law and some other sort of other (ethical?) obligations premised on cuts that are needed to avoid catastrophic climate change and some means of allocating these cuts amongst countries.

Whether or not a cap and trade represents a “fair share” is another issue. The caps are the result of political negotiations, and if there was no cap and trade there may still be emission reduction commitments and targets but I don’t think they would necessarily be any fairer simply because they were not linked to cap and trade. If anything developed countries would be less willing to assume steeper cuts, making cap and trade an ethical imperative as the most likely means of achieving the steepest global reductions.

B. Our Response

Mr. Sullivan probes appropriately about elements of our claim that if the cap is unjust the entire cap and trade regime may be unjust. It appears to us that there are several different questions Mr. Sullivan raises.

First, Mr. Sullivan asks what is the basis for our claim that many caps do not meet a nation’s fair share of safe global emissions.
Answer, there is a growing scientific consensus that to prevent dangerous climate change the world most likely needs to reduce global emissions by between 25 to 40 per cent by 2020.

A rich literature on this issue exists. In citing this literature it is important to acknowledge that because there is uncertainty about climate sensitivity, that is we don’t know for sure how much warming will be experienced at equilibrium from different concentrations of CO 2 equivalent in the atmosphere, various emissions reductions targets are recommended to give different levels of confidence that warming will be limited to additional warming targets such as 1.5 0C or 2 0C. We must also acknowledge that there is great controversy about whether 20C.should be the global warming limit target or 1.50C or even lower temperature should be the target. In addition, it should be recognized that there is no ethically neutral way of making this decision because of the inherent uncertainty in the climate sensitivity coupled with uncertainty about at what temperatures the Earth will experience rapid non-linear responses of the climate system. For this reason, determining a global target raises a host of ethical questions which are beyond the scope of this post. These ethical questions include who should have the burden of proof about what temperature levels are safe and what quantity of proof should satisfy the burden of proof. Nevertheless, there appears to be a growing scientific consensus that 20C should be, at the very minimum. a global warming temperature limit target that should be the goal of the UNFCCC.. However, as we will see, we don’t have to decide this to conclude that current caps are ethically problematic (see below). For a discussion of what reductions are needed to achieve a 20C, see.

See for example,

A. Emissions Cut Of 40% Below 1990 Levels By 2020 Needed For Industrial Countries For 2°C Limit, Potsdam Institute for Climate Research, http://www.pik-potsdam.de/news/press-releases/emissions-cut-of-40-below-1990-levels-by-2020-needed-for-industrial-countries-for-2b0c-limit

B. How To Avoid Dangerous Climate Change, Union of Concerned Scientists, http://www.ucsusa.org/assets/documents/global_warming/emissions-target-report.pdf

C. Climate targets ‘must be bolder’ a statement of one group of scientists on this issue: http://www.sciencealert.com.au/news/20091809-19778.html

However, given that global emissions most likely need to be reduced by at least 25% below 1990 levels by 2020 at the very minimum to give any reasonable confidence that the world will avoid rapid non-linear warming, one can conclude that national commitments made pursuant to the Copenhagen Accord will not achieve what is needed to achieve the 25% minimum reductions by 2020 because they just don’t add up to 25% reductions. A fortiori, individual high-emitting nations can be accused of not meeting their fair share of safe global emissions because fairness would require that high-emitting nations would have to achieve lower emissions than what is needed for the globe, yet no high emitting nations have made commitments at a levels which now appear to be necessary to achieve the 20C target for the entire world.

For this reason, a strong case can be made that existing caps on high-emitting countries do not achieve what justice would require of high-emitting nations to avoid dangerous climate change to others.
Second, Mr. Sullivan appropriately asks ClimateEthics whether given some of the caps that nations have agreed to are now legally recognized by international law such as the Kyoto Protocol, how can we say they are unethical.

We would argue that legal validity does not equal ethical sufficiency given that: (a) nations have never claimed that the emissions reductions commitments they have agreed to in accepting a cap represent their fair share of safe global emissions, (b) nations seem to base the legitimacy of their emissions reductions targets on national self-interest not international responsibility, and (c) nations have negotiated the cap that they have accepted on the basis of what was viewed by them to be politically viable. . We, therefore, don’t agree that legal commitments can be construed to satisfy ethical obligations.

One could of course argue, that making any legal commitments in a cap is better than no commitments. We would agree. However, ClimateEthics believes it is important to acknowledge that existing caps do not achieve what would be required of nations if they took their ethical responsibilities seriously to reduce their emissions to their fair share of safe global emissions.

Along this line, we believe it would be an improvement to require in international negotiations that each government be required to expressly articulate what atmospheric concentrations of ghg emissions their commitments are designed to achieve. No national target makes any sense unless it is seen implicitly as a position on a safe global atmospheric concentration target but nations are not asked to explain what global targets will be achieved by their voluntary targets and why their emissions commitments should be understood to constitute their fair share of total global emissions.

Third, we understand Mr. Sullivan to be asking once the cap is agreed in international negotiations, can we claim that the entire cap and trade regime is unjust.

We think this question raises interesting ethical issues not yet dealt with. Another way of stating this question is- if the world has agreed to caps in an international agreement, given the agreement how can we say the entire cap and trade regime is unjust. We believe the trade features of cap and trade could lead to seeing the entire scheme as unjust if the cap is unjust for the following reasons. If country A only agrees to a 10% reduction by 2020 when their fair share is 25% for instance, and they actually achieve 15% reduction they can sell the 5% excess tons to country B to be counted against country B’s target. This then creates two injustices. First country A has not achieved its fair target. Second it gets unjust revenues because the cap was set too low. This also gives the buying entity, country B a right to exceed its fair share of safe global emissions because it has bought credits from country A. From the standpoint of a country that is very vulnerable to climate change impacts, the trading scheme is unethical.

Continue reading →

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.

Posted on by

I. Introduction

This post is one of a series of entries that has looked at ethical problems with cost arguments made in opposition to the adoption of climate change legislation and policies.

As we have seen in prior ClimateEthics’ posts, with the possible exception of arguments that claim the science of climate change does not support action on climate change, by far the most common arguments against action on climate change are claims that proposed climate change policies should be opposed on grounds that they cost too much.

These arguments are of various types such as claims that climate change legislation will destroy jobs, reduce GDP, damage specific businesses such as the coal and petroleum industries, increase the cost of fuel, or simply that proposed climate change legislation can’t be afforded by the public. This post is one of a series that identifies ethical problems with these cost arguments made against the adoption of climate change policies and legislation.

In the entry entitled Ethical Problems With Cost Arguments Against Climate Change Policies: The Failure To Recognize Duties To Non-citizens, ClimateEthics explained how cost arguments were often deeply ethically problematic because they ignored duties, responsibilities, and obligations to others to reduce greenhouse gas emissions. That is, cost arguments usually appeal to matters of self-interest and ignore responsibilities to others including the tens of millions of poor people around the world that are already suffering from climate change impacts or are vulnerable to harsh climate change impacts in the future.

In an entry entitled Ethical Issues in the Use of Cost-Benefit Analysis of Climate Change Programs< ClimateEthics explained why cost arguments were also ethically flawed because they often:

(a) ignore the fact that costs would be imposed on those who are causing the problem yet the victims of climate change that would benefit from taking action are some of the poorest people around the world, and thereby are inconsistent with theories of distributive justice; and

(b) implicitly rely on “preference utilitarianism,” a justification for non-action on climate change that is ethically flawed when applied to climate change for several reasons.

In another recent post entitled recent post, ClimateEthics explained why costs arguments could not be made against climate change policies if greenhouse gas emissions led to human rights violations Climate Change Policies: Increased Costs May Not Justify Human Rights Violations,

This post now looks at how cost-benefit arguments made in opposition to climate change policies are also often ethically problematic because they fail to accurately identify the full damages of doing nothing on climate change.

The failure to adequately deal with the full costs of doing nothing stems from two problems with how the values of the benefits of taking action are calculated.

First cost arguments fail to fully identify all potential harms and damages from climate change.

Second cost arguments usually discount the values of future benefits to be experienced from climate change, an approach which raises numerous ethical problems.

This post looks at ethical issues that arise because of the failure to fully identify and appropriately value all potential damages and harms that will be avoided if climate change policies and programs are enacted. A later post will look at the problems of discounting future benefits.

Continue reading →

Are Ethical Arguments for Climate Change Action Weaker Than Self-Interest Based Arguments? Why Taking Ethical Arguments Off the Table Is Like A Soccer Team Unilaterally Taking The Goalie Out of the Net.

Posted on by

I. Introduction

Many commentators to ClimateEthics argue that since people are self-interested beings, it is more important to make arguments in support of climate change based upon self-interest rather than ethical arguments. Some go so far to assert that people don’t care about ethics and therefore only self-interest-based arguments should be used to convince people to enact domestic climate change legislation. In other words, they argue:”get real” only self-interest arguments matter.

This view has dominated much discussion of climate change policy in the United States. No U.S. politician known to ClimateEthics has been expressly making the ethical arguments that need to be made in response to objections to proposed climate change policies. As ClimateEthics has previously reported, this is not the case in at least a few other parts of the world. See, The Strong Scottish Moral Leadership On Climate Change Compared To The Absence Of Any Acknowledged Ethical Duty In The US Debate.

Almost all arguments in the United States in support of climate change policies have been different self-interest based arguments such as climate change policies will protect the United States against adverse climate caused damages in the United States, create good green jobs, or are necessary to prevent national security risks to the United States that might be created if millions of people become refugees fleeing diminished water supplies or droughts that are adversely affecting food supplies. There are no known politically visible arguments being made in the United States that argue that the United States should reduce its greenhouse gas emissions because it has duties, obligations, and responsibilities to others. In particular, there has been no coverage of the specific ethical arguments for climate change legislation in the mainstream media except with a very few infrequent exceptions.

More specifically, when opponents of climate change policies make self-interest based arguments against the adoption of policies such as cost to the United States, there are no follow-up questions asked by the press about whether those who argue against climate change policies on grounds of cost to the United States are denying that the United States has duties or responsibilities to those outside the United States to prevent harm to them
.
Now ClimateEthics agrees, of course, that if the consensus view of climate change science is correct, enlightened self-interest would support strong climate change policies. As an example, most economists now support action on climate change because they believe the costs of doing nothing are greater than the costs of taking action. In fact, there are many reasons why enlightened self-interest would support action on climate change. Yet what we explore here is not whether enlightened-self interest supports climate change policies, of course it does, but whether self-interest arguments are actually stronger than ethical arguments. Although the conclusions reached in this post are initially counter-intuitive, we here explain why ethical arguments are in some ways much stronger arguments than self-interest based arguments and the failure to look at climate change policies through an ethical lens has practical consequences. This, as we shall see, is particularly true of arguments made against climate change policies. And so ethical arguments may be no stronger then self-interest based arguments for some things, but they are actually indispensable for understanding what is wrong with certain arguments made against adopting climate change policies.
In fact, ClimateEthics believes that an appeal to self-interest alone on climate change, a tactic followed both by the Clinton and Obama administrations for understandable reasons, has been at least partially responsible for the failure of the United States to take climate change seriously. We have written about this in some detail at Climate Ethics in and entry entitled “Having We Been Asking the Wrong Questions Scientists.?”

We would like now to explain in greater detail why taking the ethical reasons for support of climate change policies off the table in the debate about climate change is tantamount to a soccer team unilaterally taking the goalie out of the net. In other words, a case can be made that the ethical arguments are actually much stronger than self-interest based arguments at least in some very important ways. Therefore the failure to make the ethical arguments for climate change policies should be a concern because such failure has practical consequences.

Continue reading →

What Needs To Be Done To Assure That Ethical Principles Guide Climate Change Policy Making: A Look At The Bridge at The End OF The World

Posted on by

I. Introduction.

Every once in a while a book is published that goes to heart of issues examined in ClimateEthics This is a review of such a book. This post reviews The Bridge At The End Of The World, Capitalism, the Environment, and Crossing From Crisis To Sustainability by James Gustave Speth. (Speth 2008)

Although this new book examines the causes of an unfolding failure to protect the environment on a matter of a number of global environmental issues, this book makes a major contribution to many issues that have been of interest to ClimateEthics. It is a provocative book, but in the best sense of the word. It is a compelling exhortation to look deeper and more critically at the institutions, dominant discourses, and reigning ideas structuring and defining global environmental controversies-matters that for the most part have gone unchallenged by civil society including environmental groups.
According to Speth, it is the current form of capitalism and its influence on governing institutions that it has that is most responsible for global environmental deterioration. If Speth is right, the dominant ideas shaping our environmental discourses must be confronted if there is any hope of moving away from the approaching environmental abyss.

Speth’s new book is a clearly written, exhaustively researched, courageous, and compelling description of why the global environment has continued to deteriorate despite forty years during which the modern environmental movement has risen. Seeing a huge failure to make progress on protecting the global environment after almost four decades, Speth explains that in this book he is attempting to go deeper than he has before to examine the root causes of the growing global environmental crisis.

Speth’s conclusions are remarkable coming from someone who has been called an “insider’s insider.” Speth was a co-founder of the Natural Resources Defense Council, member and chairman of the Council on Environmental Quality in the Executive Office of the President during the Carter administration, Professor of Law at Georgetown University Law Center, founder of the World Resources Institute, a senior adviser to President-elect Bill Clinton’s transition team, administrator of the United Nations Development Programme; dean of the Yale School of Forestry and Environmental Studies, and now a professor at Vermont Law School. There are few people in the United States that have been in a better position to diagnose the worlds environmental problems and their causes.

Because Speth so forcibly attributes the causes of the daunting global environmental crises to an out-of-control global capitalism, given his background as a very well connected Washington insider, the books conclusions are an astonishing lightening bolt that illuminates both the nature and causes of the environmental abyss the world is facing. That this book has come from the dean of the prestigious Yale School of Forestry and Environmental Studies with high-level ties to some of the most respected environmental institutions is astonishing.
The main idea of this book is that there is no hope of solving the world’s major growing environmental and social problems unless there is much more robust government intervention in global economic markets. Although Speth in the end is not completely anti-market-he is very strongly critical of market failures and the hegemony of market ideas. Speth wants to keep a place for markets, but believes governments must keep markets in their place.

Continue reading →

Ethical Issues in the Use of Cost-Benefit Analysis of Climate Change Programs

Posted on by

I. Introduction

Economic analysis of climate change issues can help policy makers in many ways including identification of the least costly methods to reduce greenhouse gas emissions and how to structure incentives to encourage society’s maximum reduction of carbon footprints. Without doubt, economic analyses of climate change reduction strategies are vital to finding the most efficient solutions to human-induced climate change’s immense threat. The more low-cost solutions to climate change are found, the more hope there is to reduce climate change’s immense menace. Yet there are ethical limits to the use of some economic arguments frequently made in opposition to proposed government action to reduce greenhouse gas emissions.Cost-benefit analysis (CBA) of some environmental regulatory programs can help identify proposed market regulatory interventions whose costs significantly outweigh environmental benefits. Yet CBA of some government environmental programs including climate change emissions reduction strategies often ignore serious ethical limitations on the use of this tool to guide climate change policy.

Continue reading →