Grant the Warming, Then Ask What Each Climate Policy Actually Buys

Here is a sentence that will annoy people on both sides of the climate fight: the planet has warmed, and that does not settle what we should do about it. The loud half of the debate treats those two claims as one. If you accept the first, they say, you owe them the second. If you reject the second, they say, you must be denying the first.

Both halves of that bargain are wrong, and conservatives lose the argument whenever they accept it. The better approach is to concede what the record shows and then ask the question that every other policy in American life has to answer: what does it buy, and what does it cost?

Define the terms. Climate science asks what is happening to temperatures, why, and what is likely to follow. Climate policy asks what we should do about it, and that is not a scientific question. It is an economic and moral one. It involves prices, tradeoffs, who bears the burden, and which problems we solve first. A physicist is no more qualified than a plumber to say how much a family should pay for a degree of future cooling, though the plumber at least would give you an estimate in writing. That belongs to voters and their representatives.

What a conservative can concede

Start with the concessions, and make them cheerfully, because they cost the argument nothing.

First, the global average surface temperature has risen over the last century and a half, by more than one degree Celsius, which is a bit over two degrees Fahrenheit, according to the major temperature records. Second, the carbon dioxide in the atmosphere has risen, mostly because people burn coal, oil and gas, and carbon dioxide traps heat. Third, more warming is likely if emissions continue to grow. None of that is a partisan claim. It is the working consensus of the research literature, and a conservative who builds his case on denying it has built it on sand.

Why concede it? Not to be agreeable. Conservatives have a long tradition of facing facts and then reasoning from them, and the first duty in any argument is to know where the disagreement actually is. The disagreement here is not about the thermometer. It is about the next three questions, which are where the real fight lives.

The three questions every policy must answer

Here is the structure, in numbered premises.

1. How much does this policy change future temperature? Not how much it reduces emissions in one country in one year, but how much cooler the world would be by a given date.
2. What does it cost, and who pays? In dollars, jobs, reliability and freedom of choice, counted honestly and not only for the quarter the ribbon is cut.
3. Is there a cheaper way to protect people from the harm? If the damage from a warmer world can be reduced by building seawalls, improving crop varieties, or making people wealthier, those options belong on the same ledger.

A serious climate policy has to answer all three. A great many fail the second and third, and nobody in power wants to talk about the first.

Why a single country's cuts are swamped

The first question is the awkward one. Climate is a global system. The carbon dioxide that a ton of coal puts in the air in Pennsylvania mixes with the atmosphere over Shanghai, and the reverse is true. The only number that matters for global temperature is the total, summed across the planet.

The United States has cut its emissions from their peak in the 2000s, in large part because cheap natural gas displaced coal in electric power, a story told in How America Went From Importing Natural Gas to Shipping It Worldwide. But global emissions have kept rising, because China and India, with a combined population of nearly three billion people, have been building power plants to lift their people out of poverty. China burns more coal than any other country by a wide margin, and has added coal capacity in the years since it signed climate agreements. India's energy use is growing from a low base as hundreds of millions of people gain electricity and appliances.

You do not need a model to follow the arithmetic of principle. Suppose the United States, by some heroic policy, cut its emissions to zero tomorrow. Global emissions would fall by the United States' share, which is a minority of the world total. The growth in other large economies over a few years could exceed that cut. This is not an argument that American cuts are meaningless. It is an argument that they cannot work alone, and that a policy asking American families to pay heavily for cuts that other countries' growth will overwhelm has to explain why the bargain is worth it.

That point was understood in the Senate nearly thirty years ago, when it voted 95 to 0 for a resolution warning against any climate treaty that left out developing countries or that would seriously harm the American economy. The story is in The Senate Voted 95 to 0 Against a Climate Treaty Before Kyoto Was Written. The structure of the problem has not changed. A treaty is only as strong as its largest emitter, and the largest emitters are not in the room making sacrifices.

The social cost of carbon and the discount-rate debate

The government's favorite tool for the second question is a number called the social cost of carbon. It is an estimate, in dollars, of the damage done by emitting one more ton of carbon dioxide, reaching decades into the future. Regulators use it to justify rules: if a rule cuts emissions, multiply the tons by the social cost, and count the product as a benefit.

The trouble is that the number depends heavily on one assumption: the discount rate. A discount rate is how much less we value a dollar of damage in 2100 than a dollar today. It is the same idea as interest. If you could invest a dollar today and have more than a dollar later, then a dollar of harm far in the future is worth less when measured against a dollar in hand now.

Here is how much that assumption matters. The Obama administration's interagency working group produced estimates in 2010 at several discount rates, and the figure for one common rate was in the low twenties of dollars per ton. In 2021 the Biden administration's interim figure was $51 per ton, using a 3 percent rate. In 2022 the Environmental Protection Agency proposed a figure near $190 per ton, using a much lower discount rate, in the neighborhood of 2 percent. Same pollutant, same science, a swing of nearly four times from the choice of one dial. If your grocery bill worked that way, you would call the manager. Longstanding federal guidance on regulatory analysis, OMB's Circular A-4 of 2003, recommended showing results at both 3 percent and 7 percent, and the lower the rate, the larger the number and the more rules it can justify.

That is not a scandal by itself. Choosing a discount rate is a hard problem, and honest economists disagree. But it should lower the confidence of anyone who treats the social cost of carbon as a fact of nature. It is a modelled estimate, and the output is mostly a product of assumptions that voters were never asked about. When a policy is justified by a number that can shift by a factor of four depending on a dial, the right response is to ask to see the dial.

Which brings us to the one economist who has taken the problem most seriously.

What Nordhaus found

In 2018 the Nobel committee awarded the Prize in Economic Sciences to William Nordhaus of Yale, jointly with Paul Romer, for integrating climate change into long-run economic analysis. Nordhaus built a model, known as DICE, that puts the costs of cutting emissions and the benefits of avoiding damage on the same ledger and asks what path of policy gives the best balance.

His conclusion has been summarized in different ways, so I will state it with care and leave the details for you to check in his own papers. Nordhaus argued that the right policy is a carbon price that rises gradually over time, applied globally, and that in his model runs the most aggressive temperature targets cost more than the damages they avoid. His writing was never a case for doing nothing. He thought a price on carbon was justified. But his work established the framework that a climate policy has to be judged against its costs, and that the cheapest ton to cut should be cut first.

A conservative can use that framework without embarrassment. It is the same logic as every other policy: do the things whose benefits exceed their costs, in order from the best deal to the worst. And the framework gives us a standard by which to judge the policies that actually get proposed.

Applying the test

Run a few familiar policies through the three questions.

A mandate on electric vehicles. What does it change in global temperature? Very little, by itself, since American cars are a fraction of world emissions and the battery supply chain brings its own emissions and dependencies. What does it cost? A great deal in dollars, in grid upgrades, and in choice, a point developed in The Electric Car Mandate Is a Choice Washington Makes for Your Driveway. Is there a cheaper way? Replacing coal with gas, as the market has done, cut more emissions at lower cost.

A subsidy for wind and solar. What does it buy? Some displaced fossil generation, at a price that the arithmetic of the credit shows can be high per ton avoided, and with side effects on grid reliability, as in The Wind Tax Credit Was Temporary in 1992 and Kept Coming Back for Decades. A subsidy is a poor tool if a more direct one exists, rather like paying a man to dig a hole so that he can afford to fill it in.

A carbon tax with offsetting tax cuts. A few conservative economists have argued for a revenue-neutral carbon tax, with the money returned through lower taxes elsewhere, as a cleaner alternative to the maze of mandates and credits. I do not endorse it here, and plenty of conservatives reject it as a new tax that will not stay neutral. I mention it because it passes the first test of a good policy: it is transparent about its price. If you believe the problem is serious, you owe the public a policy whose cost is visible, not hidden across ten thousand pages of regulations.

Adaptation. This is the policy that almost never gets a hearing. If a warmer world means stronger storms and higher seas, the cheapest protection may be stronger buildings, better drainage, and seawalls. The Dutch figured that out in 1953, as we saw in After the 1953 Flood the Dutch Built Their Way to Safety, a Lesson in Adaptation. Wealth is the most effective protection from the weather ever invented, and no ministry has yet managed to regulate a hurricane into a drizzle.

The strongest case for aggressive action

Fairness requires the best version of the other side.

The best case: The costs of warming are spread across the whole world and across generations, and the people who will bear the worst of it, in poor countries and in the future, are not at the table. Markets do not price the damage, so the usual argument that individuals know best does not apply to a shared atmosphere. The risks are uncertain, but some of the bad outcomes are severe and hard to reverse, and insurance against a catastrophe is worth paying for even if the odds are low. Waiting makes it more expensive to fix. And the technology to cut emissions is getting cheaper, so acting now is not as costly as the skeptics say.

Here is the answer in order.

1. The shared-atmosphere point is correct, and it is why a global price would beat a patchwork of national mandates. But a shared problem does not justify any policy at any price. The cost-benefit test applies to public goods too. The question of what a policy buys comes right back.
2. The tail-risk argument cuts both ways. Severe, irreversible outcomes can also come from policies that wreck an economy, such as a poor country denied cheap power, and the same insurance logic applies to those. A policy that makes a nation poorer makes it less able to handle any hazard. The moral side of that is developed in Hundreds of Millions Still Cook Over Wood, and That Is a Moral Question.
3. "Acting now is cheap because technology is cheap" proves too much. If clean energy is cheaper, it will win without a mandate. If it is not yet cheaper for the job at hand, the mandate is a tax by another name.
4. The future is not only a place that suffers. It is a place that is richer. On any reasonable economic growth assumption, our descendants will be wealthier than we are, and a policy that asks the poorer to subsidize the richer should be held to a high standard. That is one reason the discount rate matters.
5. Uncertainty is a reason for humility about the cure, too. The same models that carry wide error bars on temperature carry wide error bars on policy effects. The wise response to uncertainty is to favour policies that pay off in many futures, like cheap energy, resilient infrastructure and economic growth.

The Founders' test

The Declaration of Independence says governments are instituted "to secure these rights," and that they derive "their just powers from the consent of the governed." Consent is the operative word. A policy that costs families a significant share of their income ought to be put to their representatives in a bill with a number on it, and not slipped into an agency rule justified by a modelled estimate that moves by a factor of four with a dial. The Supreme Court's 2022 decision in West Virginia v. EPA made that principle concrete: when an agency claims the power to remake a major sector of the economy, it needs clear authorization from Congress.

That is not hostility to environmental protection. Theodore Roosevelt, whose conservation legacy conservatives rightly claim, is one of the heroes of Theodore Roosevelt Made Conservation a Conservative Cause, and It Still Is. His kind of conservation protected land, water and wildlife through law passed in the open. The question is not whether to care about the world we hand on. It is whether the people who will pay get a say.

The case in brief

1. A conservative can accept the measured warming of the last century and the role of carbon dioxide, and still ask what a given policy buys. Science tells us what is happening. Policy is an economic and moral choice.
2. Every policy must answer three questions: how much it changes future temperature, what it costs and who pays, and whether a cheaper protection exists.
3. A single country's cuts are swamped by growth elsewhere, which is why the 95 to 0 Senate vote asked that any treaty include the developing world.
4. The social cost of carbon swings from the low twenties to about $190 per ton depending on the discount rate, and Nordhaus's Nobel-winning work shows the right test is cost against benefit.
5. Adaptation, wealth and cheap energy deserve a place on the ledger next to emission cuts.

What you can do: read the Constitution's text on who holds legislative power in the Constitution, then ask your members of Congress whether a climate rule that costs your family money was voted on or written by an agency.