Now that the IPCC’s report is being misunderstood to mean that we’ll all have to survive on a diet of mung beans we would of course expect George Monbiot to weigh in. Which, obviously, he does. But in an interesting and for him what is going to be an uncomfortable manner. Because he raises the subject of opportunity costs:
The problem is that it concentrates on just one of the two ways of counting the carbon costs of farming. The first way – the IPCC’s approach – could be described as farming’s current account. How much greenhouse gas does driving tractors, spreading fertiliser and raising livestock produce every year? According to the panel’s report, the answer is around 23% of the planet-heating gases we currently produce. But this fails miserably to capture the overall impact of food production.
The second accounting method is more important. This could be described as the capital account: how does farming compare to the natural ecosystems that would otherwise have occupied the land? A paper published in Nature last year, but not mentioned by the IPCC, sought to count this cost. Please read these figures carefully. They could change your life.
The official carbon footprint of people in the UK is 5.4 tonnes of carbon dioxide per person per year. But in addition to this, the Nature paper estimates that the total greenhouse gas cost – in terms of lost opportunities for storing carbon that the land would offer were it not being farmed – of an average northern European diet is 9 tonnes a year. In other words, if we counted the “carbon opportunity costs” of our diet, our total footprint would almost triple, to 14.4 tonnes.
Now it’s entirely correct that opportunity costs need to be included. The second great lesson of economics, there are always opportunity costs.
Great. But now apply opportunity costs to climate change itself. Current predictions – in fact the models we all use to talk about climate change in the first place – tell us that the world will be some 11 times richer in 2100 than it was in 1990. Assuming that we follow the capitalist, globalised, free market system (the A1 family in the SRES). If we power this with lots of fossil fuels we’ll have lots of climate change. If we power it without lots of fossil fuels we’ll not have lots of climate change (A1FI and A1T).
Well, OK. George rather tells us that we’ve just got to stop economic growth right now because climate change, the environment. But stopping climate change right now has a cost – that opportunity cost of not being 11 times richer in a century’s time. Which is rather the problem with opportunity costs. Once you decide to bring them into the debate then you need to bring them all in. Further, people get to decide for themselves too. What looks like a reasonable trade off to you or me might not to George.
Fortunately, we’ve even a method of dealing with this. Those externalities, put them into market prices. That makes the effect of our trade offs visible as we make a decision. The carbon tax at the social cost of carbon means that we all, individually, see the opportunity costs and then react to them.
So, why does George not support a carbon tax? Why does he support instead legislative action to ban stuff? Because he knows that humanity, on average, will react to those trade offs of opportunity costs differently than he would. Thus he seeks the law to impose his view rather than leaving others to get on as they desire.
Which is in fact the argument against a carbon tax. That it wouldn’t be enough to prevent climate change at all. Because very large numbers of people don’t give a bugger about climate change which is something the campaigners never want to have to acknowledge.