Re: [asa] Subglacial Water System Moving Faster Than Previously Thought

On Feb 19, 2007, at 10:47 AM, David Opderbeck wrote:

> Rich, I think one issue with some of the "skeptical" economists is
> what assumptions should be made about the growth of technology to
> solve problems caused by warming. Again, the "population bomb"
> issue of the early 70's is instructive here. Many economists
> maintained that increasing population would not cause an apocalypse
> because technology for food production, distribution and
> communcation would also improve -- and they were right, in spades.
> Likewise, many economists reject apocalyptic scenarios on the
> assumption that markets will develop technological solutions to the
> problems caused by warming as the demand for such solutions
> increases. The rational response today, taking this assumption
> into account, is to focus on incentives for new technologies rather
> than primarily focusing on disincentives for the old (fossil fuel)
> technologies.
>

Then they should make the proposals and not just some vague "oh let
technology take care of it". Technology does those things if there is
a good economic incentive for it. If you make fossil fuel expensive
then the technological solutions will come naturally out of the free
market. What the government should not do is pick the winners, e.g.
see how much more successful the Prius was over the EV-1. Government
should pick the loser, namely fossil fuel. The market does a better
job of finding the best technological replacement than the government
could ever hope for. The best incentive for new technology is to make
the old alternative relatively expensive to the early versions of the
alternatives. These early versions will be expensive and then us
engineers cost reduce them from there. We need to subsidize the early
adopters to allow for this cost reduction at which point the subsidy
goes away. Yet, we need to subsidize in the right way. The reason why
we should be disinsentivizing fossil fuels over insentivizing
alternatives is that higher costs reduce usage of fossil fuels for
those who chose not to adopt the new technology. You get a double
effect that way. Tax credits could be given to poorer people for the
burden that this approach would place on them.

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Received on Mon Feb 19 13:13:35 2007