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2010 Peder Sather Symposium: After Copenhagen: What Can Be Done to Meet the Economic and Environmental Challenges?

AudioL Download After Copenhagen- Peder Sather Symposium (04.15.2010 05-54-19 PM)

After Copenhagen: 2010 Peder Sather Symposium | IIS:

AFTER COPENHAGEN: What Can Be Done to Meet the Economic and Environmental Challenges?

4 p.m., Goldman Theater, David Brower Center, 2150 Allston Way at Fulton St., Westside of UCB Campus, Berkeley, CA 94704

The Peder Sather Symposium represents an ongoing collaboration between the governments of Norway and Sweden and UC Berkeley. The goal of the symposium is to promote the understanding of political, economic, and cultural issues. The event is designed to foster interdisciplinary discussion among scholars and policymakers from Europe and the U.S. on global and national issues of mutual concern.

About Peder Sather: Peder Sather was born in Norway in 1810. He emigrated to New York and then to California, where he founded the banking firm of Sather and Church. Peder Sather was one of the early trustees of the College of California and an active participant in aiding the institution that has become the University of California. Upon his death, the Sather and Church banking firm was absorbed by the Bank of California. Although it was Peder Sather who had accumulated the wealth and resources that helped fund education in California, it was the work of his wife, Jane Krom Sather, a native of New York State, who made the Sather name part of UC Berkeley's history. Through her generous endowments to the University's teaching resources and beautification effort (notably Sather Gate, which was the main entrance to the UC campus), the Sather name has come to symbolize a legacy of collaboration between Norway and the University of California. With the Sather legacy in mind, the University of California and the Royal Norwegian Consulate General of San Francisco inaugurated the first Peder Sather Symposium in 1991.

After Copenhagen, What?

J. Bradford DeLong
Professor of Economics, U.C. Berkeley
Research Associate, NBER

April 15, 2010


We have just experienced the hottest twelve-month period in at least the past thousand years.

Media personalities and freakeconomists claim that in recent years there has been global cooling. They lie.

If global temperatures continue to rise at the rate that they have risen for the past generation, then the world of 2100 will see a world 2.3C—4.1F—hotter than the world of the 1970s. If global warming accelerates, as industrializing China, India, and other countries pour more carbon dioxide and other greenhouse gases into the atmosphere, and as Indonesia, Brazil, and other countries cut and burn their forests. We are looking at a world that by 2100 will be 5C—9F—hotter than the world of the 1970s. If we are lucky, we might discover that there are powerful carbon-sink processes and reflective cooling processes that have not yet swung into action, and we might discover magical new non-greenhouse gas emitting technologies that can be deployed more cheaply than our current open carbon-cycle technologies, and we might wind up with a world in 2100 that is little warmer than the world of the 1970s. We can hope.

But hope is not a plan. We can hope. We should also plan.

The world was supposed to plan at Kyoto, and then again at Copenhagen. It did not.

So what do we do now? I think we should do four things:

  • Pour money like water into research into closed-carbon and non-carbon energy technologies in order to maximize the chance that we will get lucky—on energy technologies at least, if not on climate sensitivity.
  • Beg the rulers of China and India to properly understand their long-term interests
  • Nationalize the energy industry in the United States.
  • Restrict future climate negotiations to a group of seven—the U.S., the E.U., Japan, China, India, Indonesia, and Brazil—and enforce their agreement by substantial and painful trade sanctions on countries that do not accept their place in the resulting negotiated system.

Let me briefly outline the reasons for these four things we should be doing:

Research. Into closed-carbon energy technologies, into non-carbon energy technologies, into geoengineering. It would be really nice to find a technological magic bullet. It would mean that all kinds of painful and difficult political negotations would not have to be carried through and we could devote the energy to all kinds of things. And it would mean that all kinds of investments economizing on energy use would no longer have to be carried through and we could spend the wealth on other things. Plus it would be cool to watch the gigantic 8000-mile in diameter sunshade being moved into its position at the appropriate Lagrange point for the Earth’s orbit. And it would be fun to watch the giant cannons throwing dust into the atmosphere—and to watch the beautiful sunsets that would result (if such a world would not be a Blade Runner-esque world in which our oceans were turning into acid soda water).

Beg the Rulers of China and India. Unless the North Atlantic Conveyor shuts down and Europe returns to the climate of the Younger Dryas Era, global warming is not a huge deal for the North Atlantic economies for a century. We mourn the losses of our glaciers and our snowpacks. We lament the extinction of the polar bears, the coral reefs, and the giant sequoias. We welcome the extra sunny days to go to the beach. We move a few miles north, relocate economic activity to get out of the paths of hurricanes and droughts, turn down our heaters, turn up our air conditioners, and live our lives. It would be expensive for us to simply adapt—more expensive I believe than dealing with the problem—but we could do so.

But China and India will soon have, along with their neighbors, three billion farming peasants in the great river valleys of Asia. They depend on the regular monsoon rains and the river flows of the Indus, the Ganges, the Mekong, the Yangtze, and the Yellow Rivers. Global warming means the climate will change. There will either be much more precipitation in the valleys and feeding the rivers, or much less. If there is much less, hundreds of millions will die in famine and drought. If there is much more, millions will die in floods and the dwelling and working places of hundreds of millions will be washed away. The peasant-farming populations are not rich enough to simply adapt.

So we need to beg the rulers of China and India to understand their long-term interest: The welfare of their countries over the next four generations depends on rapidly controlling global warming. Their own personal survival—unless they want mobs descending on their homes when they are in retirement, dragging them and their descendants out into the street, and carrying their heads on pikes—depends on rapidly controlling global warming. And because one of either China or India is going to be the globe’s dominant superpower in a century, pleasing that future superpower now is in every country’s interest. So we need to beg the rulers of China and India to recognize their personal and their countries’ long-term interest, and to use their power as future global superpowers to help us get this climate-control party started.

I hereby do so. Rulers of China and India: I beg you. Get on board. Please.

Nationalize the American Energy Industry. In the 1960s it became very clear that the price of oil in the United States needed to be higher: Because of powerful congestion and pollution externalities, we were overinvesting in the automobile civilization. A larger tax on oil would nudge the economy closer to the social optimum. In the 1970s it became very clear that the price of oil in the United States needed to be even higher: Because of instability in the Middle East, unacceptable geopolitical risks were being generated by our dependence on the Middle East as a source of energy. A larger tax on oil would nudge the economy into a configuration in which this geopolitical danger would be lessened. And at the start of the 1990s it became very clear that the price of carbon energy needed to be higher: global warming.
 Yet it never happened. It never happened because of what Lloyd Bentsen’s aides used to call the “ullengaz” industry—“oil and gas.” Powerful enough to block desirable public policy regulation and adjustment for nearly fifty years now. In general I am opposed to state-run nationalized industries: that is definitely the private sector’s place, not the government. But the interaction of rent-seeking politics with the flaws of America’s political system have made me willing to make an exception in the case of America’s oil industry: the increased allocative inefficiency that will flow from government ownership and management is, in my judgement, likely to be much less than the increased political efficiency that will flow from no longer having the energy industry able to purchase enough Representatives and Senators to block needed policy moves that it fears will be adverse to its interests. So nationalize—not to expropriate or to penalize the shareholders, but to get this particular selfish and destructive political voice out of American governance.

Restrict Future Climate Negotiations to a Group of Seven. When the United Nations was founded, key decision-making power was restricted to a group of five important countries that had been the victorious allies of World War II: The U.S., Britain, France, Russia, and China—those are the five Security Council veto powers. One of the things that Copenhagen has, I think, demonstrated is that climate-control negotiations are too complex and too fraught for them to be successfully achieved via grand multilateral processes. So allow everybody to kibbitz. But require only the agreement of a Climate Council of Seven in order to implement a treaty. And let those seven be the seven who have the biggest power to influence the climate and the most at stake: U.S., the E.U., Japan, China, India, Indonesia, and Brazil. Then enforce the treaty by using aggressive and substantial trade sanctions against outsider countries that do not want to live up to their responsibilities according to whatever plan is negotated by the Climate Council of Seven.

You may think—and you may even say—that these four proposals of mine are all unattainable and radical. You may think—and you may even say—that we should continue to walk down the road we have been walking, even though every time we do we seem to run into and bruise our noses against the same stone wall. We should, you may think, try again to walk the same road, and hope that this time it turns out differently.

But hope is not a plan.

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