Geoscience Reference
In-Depth Information
percent, but the batteries and other systems might add $3,000 to the
cost. Similarly, energy consumption for heating and cooling buildings
can be reduced with better insulation, but that requires some up-front
investment for materials and installation. I discuss these issues in Part
III, but the basic point is that reducing emissions will require sacrifi cing
valuable goods and services today in order to reduce future climate
damages.
A third and related point is more subtle. Sensible global warming
policies will require some balancing of costs and benefi ts. This means
that an economically desirable policy is one that reduces emissions in
an optimal fashion—to a level beyond which further reductions in dam-
ages are not worth the additional abatement costs. This point is actually
quite intuitive if we look at the extreme options. We could stop global
warming in its tracks by banning all fossil fuels today. No one advocates
this policy because it would be extraordinarily expensive (the “wreck the
economy” approach). At the other pole, we could do nothing at all, for-
ever, or at least for a long time. Some people actually do take this posi-
tion, but that proposal appears to me to be a reckless gamble (the “wreck
the world” approach).
By thinking of these extremes, we see that good policies must lie
somewhere between wrecking the economy and wrecking the world.
Current ideas about how to weigh the competing demands of econom-
ics and the environment are discussed later in this topic, but for now,
the basic point is that some kind of balancing is required.
The fi nal consideration is whether, after we have balanced costs and
benefi ts in a careful manner, a precise target for policy will emerge. I call
this a “focal policy” because it would be an obvious policy that people
can agree and focus on. Some areas have natural focal policies, such as
eliminating AIDS, smallpox, fi nancial collapses, or nuclear wars.
For climate change, there is a great temptation to fi nd focal policy
targets because that tremendously simplifi es analysis and policy. Set-
ting a fi rm target is sensible if there is a threshold beyond which impor-
tant dangerous effects appear. Our review of tipping points in Chapter 5
suggests that serious tipping points will be encountered when global
temperature increase passes 3°C. On the other hand, international meet-
