Is global warming really a chicken and egg problem?
Posted by Rich Sweeney on October 2, 2007
Today on the Business of Green James Kanter describes the current impasse on how to address climate change as a chicken or the egg problem. The impasse in question is whether to bind the global community’s GHG emissions now, or invest in technologies that will reduce emissions in the future. Is this really a “which comes first dilemma”? With the chicken or the egg, there really is no rational answer, as the causality is completely circular. With the policy decision in question, however, it seems a bit clearer. Restricting carbon emissions (which will tie the decision to emit with the cost of emission in some way) will create an incentive for the market to develop cleaner technologies. Furthermore, a portion of any government revenue gained in the process could be spent on R&D. On the other hand, simply throwing money at R&D without changing the economics facing decision-makers in the market puts an enormous amount of pressure on the scientific community to fundamentally alter the competitive landscape. It also relies upon non-market forces to gauge demand and efficiently allocate investments, always a risky decision.
Seems to me like this is more an issue of push vs. pull than chicken or the egg. I know that there are examples where push works best, but pull seems to be the safer bet when it comes to global warming. Any one else have any thoughts on this?