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Breaking An Environmental Law

Jan 21, 2012 • Behavioral Economics, Demand, Supply, and Markets, Developing Economies, Environment, Government, Households, Innovation, Macroeconomic Measurement, Regulation, Thinking Economically • 112 Views    No Comments

Asked by the Pew Center for the People and the Press to rank 21 issues in terms of their significance, global warming was #21. Similarly pessimistic about climate change initiatives, one researcher asked, “How can one seriously suggest that the village kid in India should give up her hopes of prosperity, education, and health care today, in order to prevent rising ocean levels many years down the road?”

What can an environmentalist do?

Maybe… connect current economic benefit to future climate results. Then, the iron law of climate policy is no longer an obstacle.

Described in the NY Times, a recent Science article suggests 14 policies that would have a beneficial economic impact now and also diminish the future global warming that the paper’s authors predict. One proposal would involve farmers in developing nations draining rice paddies more frequently to increase their yield while simultaneously reducing methane emissions.

Described in “Climate Pragmatism,” climate and health care concerns converged in a 2009 Congressional proposal for reducing black carbon soot. Two of the bill’s sponsors were environmentalists while a third sponsor questioned climate change but wanted the health benefits of cleaner air. 

The Economic Lesson

Edwin Mansfield, a University of Pennsylvania economist (1930-1967) who studied the impact of innovation concluded that smaller innovations such as new industrial thread had a much greater social rate of return than products and processes that sound more dramatic. Recent suggestions to mitigate global warming also imply that “less is more.”

An Economic Question: How might rice paddy drainage be comparable to the smaller innovations that Dr. Manfield said were so effective?

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