THE United States government is being criticized for not taking the problem of global warming more seriously. Many critics are disappointed that this country has not agreed to a specific international timetable for reducing carbon dioxide emissions by a fixed amount. Before succumbing to unwarranted guilt, let us examine the very limited scientific and economic support for taking drastic action right now.
How good is the evidence that the planet is warming? Scientists say that the greatest temperature increase occurred before the major rise in greenhouse gas concentration, the focus of the current debate. That rise in yearly temperature was followed by a 35-year-long decrease during the period 1940-1975.
Subsequently, there was a measurable increase in average yearly temperatures during a five-year period 1975-80. But apparently, in spite of record increases in greenhouse gases during the 1980s, average temperatures have not risen since 1980.
Moreover, it is hard to find evidence of bad effects of the modest increase in temperature which has occurred. Patrick Michaels of the University of Virginia reports such benign results as a longer growing season and fewer frosts. Politeness should not prevent us from reminding the current critics that, during the 1970s, the alarmists were warning the world about the great dangers of global cooling. When climate cooling was a public issue, a study by the US Department of Transportation calculated a huge national cost associated with such cooling.
Physicist S. Fred Singer points out that earlier historical periods of climate cooling caused large agricultural losses and even famines. He also notes that year-to-year changes at any specific location are far greater and more rapid than what might be expected from greenhouse warming. Nature, crops, and people have already adapted to such large short-term swings.
Professor Robert Bailing Jr., director of the Office of Climatology at Arizona State University, reports a growing consensus within the scientific community that the actual temperature rise due to global warming will be less than one degree celsius over the next century. That is down very considerably from earlier estimates.
In view of the uncertainties about the degree of warming and even greater uncertainty about its possible impact, what should we do? Prudence dictates that we pursue policies and actions that make sense even if the enhanced greenhouse effect does not exist. Improving energy efficiency comes to mind.
Here is an area where good macroeconomic policy dovetails with good microeconomic policy. Macro policymakers are concerned about the low overall level of investment in the American economy, a key cause of our sluggish growth rate. One suggested remedial measures is to restore the investment tax credit eliminated in 1986.
Under present circumstances, bringing back the tax credit would generate a double whammy. On one hand it would help quicken the growth rate. A higher level of economic output both increases living standards and generates the resources to deal with environmental problems.
Also, the added incentive to new formation would encourage the replacement of old, less efficient and often more polluting capital equipment. The result would be more efficient power plants and machinery and other key energy users.
The high road of incentives is in sharp contrast to the common suggestion for dealing with global warming by enacting a stiff carbon tax. The effects of the new tax on income and employment in the US would be substantially negative. The downward impact would hit the economy before much of the offsetting "recycling" of the revenues could occur.
The impacts of a carbon tax on specific regions and industries would be severe. The electric power industry and the many manufacturing companies that use electricity would be hardest hit. Increasing the production cost of key industrial sectors of the American economy would harm national productivity in an increasingly competitive global marketplace.