Cass Sunstein

People must pay to slow climate change

Any serious effort to lower greenhouse gas emissions is certainly going to raise prices on petrol or electricity. -- PHOTO: REUTERS
Any serious effort to lower greenhouse gas emissions is certainly going to raise prices on petrol or electricity. -- PHOTO: REUTERS

Are Americans worried about climate change? Do they want their government to regulate greenhouse gases? A recent survey - by Stanford University, The New York Times and Resources For The Future - has found strong majorities saying "yes" to both questions.

But there is a big catch, which is not getting the attention it deserves: A strong majority is also opposed to higher taxes on petrol or electricity in order to fight climate change.

That's important, because any serious effort to lower emissions is going to raise prices (certainly in the short run).

The pattern of responses is essentially the same as it was in the late 1990s, when the United States was debating whether to ratify the Kyoto Protocol to limit greenhouse gas emissions worldwide.

In one poll at the time, 59 per cent of Americans favoured ratification. Indeed, a strong majority agreed with this extraordinary statement: "Protecting the environment is so important that requirements and standards cannot be too high and continuing environmental improvements must be made regardless of cost."

At the same time, a majority would oppose the Kyoto Protocol if it would cost them personally US$50 per month. When that hypothetical monthly cost was raised to US$100, almost 90 per cent said they would oppose it.

How can most Americans be unwilling to pay to reduce a problem they believe (as they indicated in the recent poll) will damage them personally?

One answer is that many people believe companies can reduce emissions on their own, and without imposing costs on consumers. (Unfortunately, that is highly unrealistic.)

Another is that, in polls, most people express an immediate and strong aversion to higher taxes as the solution to climate change (or almost any other problem).

If the second answer is the right one, then there may be an opening for an adult conversation about the topic.

If we are worried about climate change, surely we would be willing to pay something - at least if it is not a lot - to reduce the risk. According to some estimates, the United States could do a lot to reduce greenhouse gases if the average American paid a monthly energy tax, targeted to such emissions, of US$10 (S$13.55), along with an equivalent petrol tax.

It would be interesting to ask people if they would be willing to pay such sums - or how much they might be willing to pay.

The recent survey does provide a clear lesson for national political campaigns: Candidates will have trouble if they decline to acknowledge climate change or say they don't want to address it. At the same time, they have to be wary of favouring initiatives that would impose significant costs on American consumers.

It is much more effective to stress the potential benefits of new forms of clean, American- made energy - and to celebrate the money-saving advantages of fuel-efficient cars and energy-efficient appliances.

But effective campaigning is one thing; adult conversations are another, and they cannot avoid the question of cost.

BLOOMBERG