A Surprising Conclusion about the Environment

If you have not read the best-selling “Freakonomics” books, the series was vaulted to fame by providing a purely economic analysis of various subjects not normally thought of in economic terms. For example, what should people name their babies if they want them to succeed in life, or what are the career prospects in prostitution?

Most decisions we make in life, even within a business, are not made solely on economic terms. Most of us, for example, do not seek out the richest possible spouse — although the term gold digger exists for a reason. Usually, there are factors that we value more than the economic output of a decision. We might pay more for an identical home that has a better view. We might buy more Girl Scout cookies from the girl next door than from a girl we don’t know.

Let’s analyze some aspects of global climate change purely from an economic standpoint. First, it’s worth noting that part of the popularity of “Freakonomics” is that the conclusions are often surprising. For example, we have a national movement against drunk driving, but “Freakonomics” concluded that a drunk person and anyone he or she encounters is eight times more likely to die from drunk walking. Another conclusion from the series is that the best doctors in a field often have the highest patient death rates.

Today’s surprising economic analysis in the area of global climate change is that if you believe strongly that the world must reduce its CO2 and other greenhouse gas emissions, you should be an ardent advocate for hydraulic fracturing or “fracking” to increase the use of natural gases for energy rather than our current dependence on coal. There are many more variables than can be included here, including leaks of natural gas into the atmosphere, and deaths of coal miners, but in general, natural gas produces only half of the CO2 compared with coal when burned.

The World Health Organization estimates the most polluted city in China is Xingtai with an air quality reading of 155.2. The most polluted North American city is Bakersfield, Calif., at 18.2. China presently puts out twice the carbon emissions of the United States and that figure is growing rapidly, while it is remaining level, or declining, in the United States. Nearly all of China’s electricity plants are coal-fired and they have already planned 30 percent more coal-fired plants.

For those who want to reduce carbon emissions, nearly all of the leverage is in China. What can an American environmental activist do to reduce carbon emissions in China? Very little, directly.

Indirectly, though, an activist can try to reduce electricity needs in China by increasing them in the United States. This means making the cost of production of goods in United States cheaper so that rational business people don’t move production overseas. The pollution generated by manufacturing a table in China, for example, is far higher than manufacturing the same table in the United States.

We should certainly pursue all of the renewable energy sources we can. At the same time, no one believes that renewable sources can completely replace fossil fuels any time soon. No energy is derived without environmental effect.

Even solar panels contain silicon tetrachloride, cadmium, selenium, and sulfur hexafluoride — a potent greenhouse gas. Very few solar panels have had to be disposed of yet, but they pose a serious environmental challenge in the future.

Fracking may have hurt the quality of ground water. The effects of black lung disease and mine collapses are visible signs of the cost of extracting coal. I am certainly not claiming that each side effect is equal. At the same time, based on what we know today about environmental effect, if we want to reduce carbon emissions, we should trade natural gas for coal.

If we make the cost of manufacturing inputs more expensive in the United States, we are driving the production to other countries, mostly China. We haven’t even considered the pollution generated in transporting finished goods from China to the United States. So, if you truly care about the environment — and not just political power — start making your poster for the next fracking rally.


One thought on “A Surprising Conclusion about the Environment

  1. Another great one Eric. Sorry we missed last Saturdays project- has he set a second date yet? We will try to make the second one.

    Greg ________________________________________

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