Energy and Environment

The road to increased carbon emissions is paved with good intentions

Christian antipathy towards Donald Trump in the hierarchy of the established church is easy to comprehend, although, given Democratic policies on certain issues in the moral-cultural sphere, the Archbishop of Canterbury’s remark that he cannot understand Christian support for Trump is a bit bemusing. The issues most Christians (including Pope Francis) tend to focus on when criticising Trump are the proposed “Wall” to keep out migrants and his opposition to joining international regulatory initiatives in relation to climate change (which critics compare unfavourably with the EU’s support).

With regard to the latter issue, this attitude is indicative of a worrying trend in institutionalised Christianity. The phrase “actions speak louder than words” seems to have been replaced by “regulation speaks louder than actions”.

Recent figures suggest that reductions in carbon emissions in the US have been greater than in any other developed country by quite a margin. Interestingly, the EU has increased its emissions hugely. Indeed, the increase in emissions in the EU more than cancels out the reduction in the US.

All the good work done by the US has been undone by the EU. It seems that signing treaties matters more to many Christians than actually doing something about carbon emissions.

This is not to say that Trump is taking the US to where it should be. In my view, there is a strong case for a carbon tax in the US that is applied uniformly to all carbon emissions and/or an emissions trading system.

The experience of the US does, though, demonstrate one point very effectively. Markets may not give rise to perfect solutions to economic problems. However, we cannot assume that regulation will correct the failings of markets. One imperfect group of people (regulators, bureaucrats and politicians) cannot be assumed to be able to perfect the results of other imperfect institutions (markets with people buying, selling and creating products governed by the rule of law). We are all carved out of the same stone.

Carbon emissions have fallen in the US because of the move from coal to fracked gas which has been market-driven. The EU, on the other hand, has labyrinthine and complex networks of regulation when it comes to energy policy which is lauded by climate change activists but much of which pulls in opposite directions. In 2017, the German government spent €2.7 billion subsidising coal production whilst ostensibly regulating markets in order to reduce carbon emissions. The total value of energy subsidies in the EU (estimated by the EU itself) is €113 billion excluding transport subsidies. This leads directly to increased emissions. And, as we see, the effect of the government interventions is the precise opposite of the declared intention.

We should not judge the results of government intervention by the intentions of those who wish to improve the world through such action. In a quotation often attributed to Otto Von Bismarck, the poet John Godfrey Saxe once said: ‘the man who wishes to keep his respect for sausages and laws should not see how either is made’. A bit more realism is called for. Government regulation arises as a result of a very human process. It is not always motivated by good intentions, but, even when it is, the results reflect the flawed nature of humanity. The EU failure to reduce carbon emissions illustrates this point very well.

Philip Booth is Senior Academic Fellow at the Institute of Economic Affairs. He is also Director of the Vinson Centre and Professor of Economics at the University of Buckingham and Professor of Finance, Public Policy and Ethics at St. Mary’s University, Twickenham. He also holds the position of (interim) Director of Catholic Mission at St. Mary’s having previously been Director of Research and Public Engagement and Dean of the Faculty of Education, Humanities and Social Sciences. From 2002-2016, Philip was Academic and Research Director (previously, Editorial and Programme Director) at the IEA. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. He is a Senior Research Fellow in the Centre for Federal Studies at the University of Kent and Adjunct Professor in the School of Law, University of Notre Dame, Australia. Previously, Philip Booth worked for the Bank of England as an adviser on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.

1 thought on “The road to increased carbon emissions is paved with good intentions”

  1. Posted 05/02/2019 at 19:46 | Permalink

    “Recent figures suggest that reductions in carbon emissions in the US have been greater than in any other developed country by quite a margin. Interestingly, the EU has increased its emissions hugely.”

    Hi! Can you link to a source please? Thanks!

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