The World Uncertainty Index, co-created by SIEPR Senior Fellow Nicholas Bloom, is the broadest assessment tool yet to measure global uncertainty, which is now approaching a record high.
While we can’t turn back the clock, there are ways to help shape the future when it comes to combating climate change and mitigating its social costs.
Ultimately, however, the biggest hurdle will be political.
That was the broad agreement expressed by panelists who spoke Wednesday at a policy forum co-hosted by the Stanford Institute for Economic Policy Research (SIEPR) and The Hamilton Project at the Brookings Institution.
The event, held at Stanford, explored the pros and cons of a range of economic policy innovations — from a federal carbon tax and stricter emission standards to investment increases of R&D into energy alternatives and recycling carbon dioxide. An analysis detailing how policy inaction will lead to substantial economic harm, including damage to mortality rates and agricultural productivity, was also released.
Mary Nichols, chair of the California Air Resources Board — and a key player in the state’s path-breaking climate programs — delivered the forum keynote, saying climate change “is the existential issue of our time.” Her remarks mixed optimism with realities.
Nichols discussed the success of California’s cap-and-trade program and emission targets, and how the state’s comprehensive climate plan provides a framework for others to follow.
“Despite the progress we’ve made, we’re losing the battle,” she said.
Given the rate of global warming, cutting greenhouse gas emissions is not enough. We need to find ways to take carbon out of the air, she said. And “success over the long term means we have to enlist the private sector's ingenuity and their ability to innovate, to bring technologies to the table.”
What’s more, California can’t act alone.
“We need partners,” she said. “We can’t stop the march toward an uninhabitable planet with just 1 percent of the planet that California is directly responsible for.”
Leadership at the federal level is needed, Nichols continued. And even though the Trump administration “has decided to leave the field” of fighting climate change, that doesn’t mean California should stop steering environmental efforts and collaborating with other states and countries on that front, she said. For instance, two dozen states have since joined California in a bipartisan climate alliance.
As if on cue — illustrating the point of political obstacles — the U.S. Department of Justice filed a lawsuit against California on the same day of the policy forum, firing the latest salvo in a string of challenges to the state’s climate initiatives. The suit claims the California’s cap-and-trade pact with Canada is unconstitutional.
Nichols said “there is absolutely no legal basis” to the lawsuit, and the state “isn’t worried” about it.
In opening remarks for the event, Robert Rubin, former U.S. Treasury Secretary and a co-founder of The Hamilton Project, recalled one of his conversations with Al Gore in the White House from 25 years ago.
At that time, there was still a great deal of uncertainty about whether rising global temperatures was a threat. But Gore forewarned, “We could not afford to be wrong because if it turns out climate change is real, it would be irreversible and the effects could well be disastrous,” Rubin said.
Fast forward to today — with most climate scientists in agreement on the risks of global warming. And though polls show that two-thirds of the American population believe in climate change, Rubin said behaviors at the individual level have yet to materialize enough to have made a large-scale difference.
“Until the politics change, or the internalization becomes more widespread, it’s going to be very difficult to do what we need to do politically,” he said.
Nichols’ keynote — along with remarks by Rubin and Kathryn Moler, Stanford’s Vice Provost and Dean of Research — can be watched on SIEPR’s YouTube channel.
The forum also featured three roundtable discussions, which can also be viewed on YouTube:
Panelists were Carolyn Fischer, a senior fellow at Resources for the Future; Lawrence Goulder, a SIEPR senior fellow and the Shuzo Nishihara Professor of Environmental and Resource Economics at Stanford; Nathaniel Keohane, senior vice president of climate at the Environmental Defense Fund; and Nancy Sutley, chief sustainability officer at the Los Angeles Department of Water and Power.
If lawmakers develop climate legislation at the state or federal level, they will need to create a level playing field, Fischer said.
And whether it’s a carbon tax or a cap-and-trade program, an important thing to consider is that revenues gained should be used to compensate those who will be most adversely affected, Goulder said.
Panelists were Etosha Cave, co-founder and chief scientific officer of Opus 12, a startup that recycles carbon dioxide; Chris Field, the Perry L. McCarty Director of the Stanford Woods Institute for the Environment; Lucas Davis, the Jeffrey A. Jacobs Distinguished Professor in Business and Technology at the Haas School of Business, University of California, Berkeley; and Ryan Nunn, policy director at The Hamilton Project.
Instead of reducing R&D, invest more and invest now, Davis said. You never know where the technology will lead. Government-funded research into radar before World War II, for instance, eventually led to aviation advances and the microwave oven.
But let’s not steer away from near-term progress, Field said. “I say, let’s put a price on carbon and do lots of R&D for upstream technologies.”
Panelists were Abigail Dillen, president of Earthjustice; Christy Goldfuss, senior vice president of energy and environmental policy at Center for American Progress; Jerry Taylor, president of the Niskanen Center; and Roberton C. Williams III, a University of Maryland professor and chief economist at the Climate Leadership Council.
Putting a price on carbon is important, but we’re going to need all the tools in the toolbox, Goldfuss said. Regulations will need to target areas where the carbon tax doesn’t reach.
A concluding comment from Williams: “As long as it’s better than the status quo, it’s a step in the right direction.”