What is the case for government funding of mitigation research?

I ended a recent post by suggesting that serious consideration should be given to Bjorn Lomborg’s view that mitigation of climate change is likely to require a substantial increase in government funding of relevant research.

   

That position is somewhat at odds with a view that I have held for a long time that governments should stay out of the business of trying to pick technological winners by funding research and development. I acknowledge the case for public funding of basic research on grounds that it is a public good that would not be adequately supplied via the normal operation of market forces. If someone suggests, however, that governments should become heavily involved in funding of research into alternative energy because the world is running out of cheap sources of fossil fuels, I would regard that as a fairly silly idea. When the world does start running out of cheap sources of fossil fuels the prices of those resources can be expected to rise, providing a strong market incentive for private sector investment in research into alternative energy sources.

So, what grounds are there to argue that carbon taxes and emissions trading schemes that impose a cost on carbon emissions will not have a similar effect on research incentives? I don’t see any. In both cases, as the production of energy through conventional use of fossil fuels becomes more expensive the market should provide adequate incentives for research.

The case for substantial government involvement in funding of research directed toward mitigation of climate change cannot rest on arguments that apply to equally to many other forms of research, even though some eminent economists may think it does. For example, Ross Garnaut argues (in Chapter 9 of his 2011 climate change report) that ‘the carbon price alone will not lead to adequate investment in research, development and commercialisation of new technologies, because the private investor can capture only part of the benefits’. Similar externalities apply, of course, to a wide range of research, development and commercialization activities throughout the economy. Perhaps the existence of such externalities warrants some government assistance to industry, such as allowing capital spending on research and innovation to be treated for tax purposes as a current rather than capital expenditure.  It might also warrant some government involvement in funding of development rather than just basic research, particularly since it is often difficult to draw a line between R and D. But it would be difficult to justify the large increase in tax – and associated economic costs – which would be required to embark on a major program of government funding of research, development and commercialization of new technologies in all sectors of the economy.

It seems to me that the case for substantial government involvement in funding of research directed toward mitigation of climate change must rest on a form of government failure (the difficulty of obtaining international agreement for concerted action) rather than on market failure (or externalities). If governments were able to agree to an appropriate carbon price the case for additional government funding of research would disappear.

Bjorn Lomborg seems to be on strong grounds in arguing that international agreements to invest in research and development are likely to have a greater chance of success than carbon-reduction negotiations. Wealthy countries are less likely to object to making greater research contributions. Agreements to fund more research may also be seen as likely to make it easier to negotiate future carbon reductions by reducing the cost margin between existing fossil fuel technologies and less polluting technologies.

However, there is potential for gradual mitigation to continue to occur even in the absence of international agreements. Governments of countries with high per capita emissions will continue to come under political pressure – from internal and external sources - to reduce greenhouse gas emissions. Perhaps the most likely outcome is that the world will stumble on toward a reduction in greenhouse gas emissions, relative to what would otherwise occur. The climate will nevertheless continue to change. This may impose high costs on some people (those faced with high adaptation costs relative to their current income levels) and benefits to some others. But the general story might be one of successful adaptation.

If that is the most likely scenario, it would make sense to view increased government involvement in research to mitigate climate change as a precautionary measure. It is probably worth doing even though it will, hopefully, not be necessary. Imagine a scenario where climate change accelerates and costs of adaptation begin to rise steeply. My guess is that in that situation, international agreement would be reached fairly quickly by the United States, China and Europe to cut emissions of greenhouse gases drastically and take steps to ensure that other countries do likewise. The economic cost of such reductions in emissions will be very high if there is still a substantial cost margin between energy generated using conventional fossil fuel technologies and cleaner technologies.

So, it seems to me that the case for substantial government involvement in funding of research to mitigate climate change is largely precautionary. It is in our interests to reduce the risk that will be posed to our standard of living if we have to make sharp reductions in greenhouse gas emissions at some later stage.

Can cyberbullying lead to mental health problems?

This is a guest post by Emily Isenberger.  Emily is associated with a website which provides resources for people interested in counselling, with a particular focus on how bullying and mental illness have been exacerbated by the Internet.

Sticks and stones may break my bones, but words can leave lasting scars. Once a fact of childhood, playground bullying has taken to the internet and social media networks. For a new generation, the advent of cyberbullying means that home, once a safe haven from a school environment, is just as dangerous, if not more so. Because cyberbullying can reach larger groups, be performed anonymously, and comments can last forever, those bullied have no escape hatch and school administrators have little power to punish perpetrators. This can lead to serious mental health consequences. 

Across the board, victims of cyberbullying demonstrate higher rates of depression, anxiety disorders, and withdrawal from school and other activities than their peers. Studies have shown that people who are bullied develop abnormalities in brain maturation. Specifically the corpus callosum, which binds the hemispheres of the brain together, lacks myelin when under stress, and therefore lessens the ability of the individual to deal with vision and memory. In other words, short-term bullying can have long-term effects on brain development.

Girls who are bullied produce less cortisol than girls who were not bullied; boys who are bullied produce more cortisol than boys who were not bullied. Because cortisol is the hormone secreted to help deal with stress, girls have a tendency towards shutting down completely, without the tools to process further stress. On the opposite hand, the fight or flight mechanism in boys triggers the former response, and boys have a tendency towards lashing out against their aggressors. Cortisol changes like this also depress the immune system, meaning that bullied students are likely to get sick more often than their classmates. 

Bullying affects more than just the victim. Families and other bystanders have higher incidence of depression, absence, and substance abuse addiction. Even the aggressors have a greater likelihood of domestic abuse, criminal violation, and alcoholism down the line. 

Cyberbullying can affect people of any age, race, or class, but if you want to study and research cyberbullying, Australian teenagers may unfortunately be the ideal subjects. Australian teenagers took the number one spot in Ipsos testing across 24 countries, and the results are in, just short of 90% of families in Australia have been affected by bullying. 

To prevent or overcome bullying, take the opportunity to talk to your children about their internet usage. If they’re feeling threatened by someone over the web, they do not have to sit quietly. Go over their options for privacy settings and talk about how to handle negative interactions with people over the internet. Currently, only one in three families use Internet-filtering software, and 40% restrict Internet usage to common areas. By putting blocks in place and monitoring how long your child can be on the web, you reduce not only his or her chance at being bullied, you reduce the chance that he or she will be the bully. 

Let your children know that you’re there to talk if they need you, but don’t push for more information than they’re willing to give. Above all, stay aware of changes in your child’s behavior. For more resources on counteracting cyberbullying, you may turn to the Jed Foundation’s website, which focuses on preventing suicide in bullied college students, but has information applicable to all age groups. 

Does it make sense to view human progress as a risk to the environment?

I don’t think so, for two reasons. First, human progress is about ‘leaving the world a better place’. That sounds a bit like motherhood, but motherhood statements are probably appropriate on Mother’s day. I particularly like the context in which Ralph Waldo Emerson used the phrase:

‘To laugh often and much; to win the respect of intelligent people and the affection of children...to leave the world a better place...to know even one life has breathed easier because you have lived. This is to have succeeded.’ [It would have been more accurate to attribute the phrase to Bessie A Stanley. Please see  Postscript 2 below for further explanation.]

Second, the environment adapts to whatever we do to it. I like the way Mark Dangerfield makes that point in his little book, ‘Environmental Issues for Real’ (2012):

‘Our debate has been about how the environment is hurting, that we are to blame and only we can do something about it. Only the environment does not hurt, it just responds. Evolution has come about in spite of all the disturbances, atmospheric upheavals and changing climate. And evolution will be ongoing with or without us and the environment will always be there doing its thing’.

Mark makes the point that real environmental issues are about us. They are about ‘how we will cope with the notion that perhaps we are reaching the limit’. Environmental change will obviously be a problem for us if it means that our lifestyles are compromised. As I see it, values are also involved. I think most humans think that it is good to share the planet with a diverse range of other species. We see the lives of most other species as having value.

The idea that environmental issues are about us is consistent with the view that about 8000 years ago Earth entered into the Anthropocene – the new age of humans. This corresponds to the period in which humans have affected the environment through the development of agriculture and animal husbandry, urban centres and industrial activities. The Anthropocene coincides largely with the Holocene (the last 12,000 years).

Some people argue that we should be aiming to bring environmental conditions on Earth back to where they were at the beginning of the Holocene - on the grounds that the further the Earth’s systems get from those conditions the more likely we are to reach some kind of tipping point. The most common nightmare scenario is runaway global warming, ending up with and crocodiles in Greenland (if not a climate like that on Venus).

Few argue that such outcomes are likely any time soon, but they may not be beyond the bounds of possibility. The following view, in The Economist in May last year, seems to me to have merit:

‘In general, the goal of staying at or returning close to Holocene conditions seems judicious. It remains to be seen if it is practical. The Holocene never supported a civilisation of 10 billion reasonably rich people, as the Anthropocene must seek to do, and there is no proof that such a population can fit into a planetary pot so circumscribed. So it may be that a “good Anthropocene”, stable and productive for humans and other species they rely on, is one in which some aspects of the Earth system’s behaviour are lastingly changed’.

So, how much would we have to modify our view of human progress in order to ensure that we continue to have a good Anthropocene? Is a good Anthropocene consistent with ongoing expansion of economic opportunities? The Environmental Performance Index (EPI) - the result of a major collaborative project of research agencies associated with Yale and Colombia universities – does not seem to me to provide much support for rejection of the view that human progress can involve ongoing expansion of economic opportunities. In general, high income countries – those which have had most economic growth in the past – have higher EPI scores than low-income countries. Over the past decade, there have been substantial improvements in average scores (population weighted) for Environmental health objectives (i.e. environmental factors affecting human health) and even some improvement for Ecosystem vitality.  Most countries with poor performance on environmental health have improved substantially over the last decade. The performance in relation to ecosystem vitality has been mixed. There has been further decline among the worst performers, but some other relatively poor performers (e.g. USA and Singapore) have improved.

We need to take account of the possibility that the future may differ substantially from the recent past. Some physical resources will probably become scarcer. This is unlikely to stop economic growth, however, because the real story of economic growth is largely about productivity growth and technological progress rather than electricity generation and steel production.

What about the precautionary principle? I am usually in favour of taking precautions, but the use some people make of the precautionary principle is highly questionable. Jeff Bennett has discussed the issues in his recently published book, ‘Little Green Lies’.  He agrees with the general proposition that we should be careful in making decisions where future outcomes of those decisions are uncertain and potentially catastrophic.  He points out, however, that the way the precautionary principle is advocated often ignores the costs associated with protecting the environment and risks hobbling society in its request for improvement.

The most quoted statement of the precautionary principle is in the 1992 Rio Declaration. If I have correctly found my way through the double negatives in that definition, it is suggesting that ‘cost effective action’ to reduce greenhouse gas emissions should not be postponed just because we don’t have ‘full scientific certainty’ that greenhouse gas emissions are likely to cause ‘serious or irreversible damage’ to the environment.  

As a general proposition that seems to me to have some merit, but it raises the question of what actions are cost effective. The only kinds of policies to reduce greenhouse gas emissions that can possibly be cost effective for a small country acting alone are ‘no regret’ policies. In that context, I have previously argued that a carbon tax would have merit if the revenue was used to get rid of less efficient taxes. Unfortunately, those conditions don’t apply to the carbon tax currently being introduced in Australia.

Jeff Bennett applies the precautionary principle to climate change as follows:

‘Climate change poses a risk to society. That risk may or may not be due to human action, but it is a risk nonetheless. When confronted with the risk of a catastrophic outcome in the future, it is always worth contemplating taking out an insurance policy. In the climate context that can involve the adoption of adaptation policies. Essentially, those policies involve taking actions now that will protect society’s interests in the event of climate change causing a threat’.

Adaptation policies seem to be sensible for any single country acting alone. The problem is that adaptation would be massively expensive under the nightmare scenarios. In that context the issue arises of what international strategies have best prospects of success in actually addressing climate change. It seems to me that Bjorn Lomborg is correct in arguing that international agreements to invest in research and development are likely to have a greater chance of success than carbon-reduction negotiations.  Lomborg writes:

‘If we continue implementing policies to reduce emissions in the short term without any focus on developing the technology to achieve this, there is only one possible outcome: virtually no climate impact, but a significant dent in global economic growth, with more people in poverty, and the planet in a worse place than it could be’.

A lot of people seem to get upset whenever Lomborg’s name is mentioned. The question we need to address, however, is whether his diagnosis of the issues is right or wrong. If Lomborg is wrong, why is he wrong?

Postscript 1: 
The discussion of these issues is continued in a later post on the case for government funding of mitigation research.
Postscript 2:
Ooops! The quoted passage that I attributed to Emerson is actually not by Emerson. The original was apparently written by Bessie A Stanley. She wrote: 'He has achieved success ... who has left the world better than he found it ...'.The story is here. I am indebted to Howard DeLong for pointing out the error.

Will the 'better angels' keep winning?

When about half way through reading Steven Pinker’s book, ‘The Better Angels of Our Nature’ (2011) I wrote something supportive of his view that Enlightenment humanism is a coherent world view. Since I have now finished reading the book I can now take a broader view of it. However, I don’t propose to attempt more that a one sentence summary of the line of argument in the book. Peter Singer’s review seems to me to provide a good summary.

Pinker argues that our ‘better angels’ are winning because violence has declined over the centuries. His book is full of evidence supporting this proposition, most of which I find persuasive. My lingering doubts centre around the spread of nuclear and biological weapons. There seems to me to be potential for crazy political leaders to destroy a higher proportion of humanity in future wars than in past wars.

Some reviewers have raised more fundamental doubts about Pinker’s view of moral progress. For example, John Gray suggests that if Darwin’s theory is right there is no rational basis for expecting any revolution in human behaviour. In my view Gray misses the point. Pinker’s view of moral progress seems to be based primarily on cultural evolution – the evolution of social norms – rather than biological evolution.

However, Pinker suggests that we should not expect our explanation of the evolution of norms opposed to violence ‘to fall out of a grand unified theory’:

‘The declines we seek to explain unfolded over vastly different scales of time and damage: the taming of chronic raiding and feuding, the reduction of vicious interpersonal violence such as cutting off of noses, the elimination of cruel practices like human sacrifice, torture-executions and flogging, the abolition of institutions such as slavery and debt-bondage, the falling out of fashion of blood sports and duelling, the eroding of political murder and despotism, the recent decline of wars, pogroms and genocides, the reduction of violence against women, the decriminalization of homosexuality, the protection of children and animals’.

The historical forces that Pinker views as leading to a reduction in violence are: the emergence of government with a monopoly on the use of force; the growth of commerce i.e. mutually beneficial exchange; growth in the power of women; an expansion in the circle of sympathy to encompass people in other communities and other countries; and what he refers to as ‘the escalator of reason’. The escalator of reason involves ascending to the vantage point of an impartial spectator (i.e. detaching oneself from a parochial viewpoint). Pinker argues:

‘A humanistic value system, which privileges human flourishing as the ultimate good, is a product of reason because it can be justified: it can be mutually agreed upon by any community of thinkers who value their own interests and are engaged in reasoned negotiation, whereas communal and authoritarian values are parochial to a tribe or hierarchy’.

The main distinction between the expanding circle and the escalator of reason is that whereas the escalator of reason requires the vantage point of impartiality, the expanding circle requires a capacity to see things from the vantage point of other people. Pinker explains that the expansion in literacy and greater reading of fiction from the Enlightenment onwards is one of reasons for an expansion in the circle of people for whom we feel sympathy. Australian blogger, Legal Eagle, helps make this point by combining a review of Pinker’s book with a review of Suzanne Collins’ series ‘The Hunger Games’. Legal Eagle suggests: ‘If, in popular fiction, we explore with the ideas of how various utopian designs of society can go wrong, and feel sympathy for the victims, hopefully we can guard against being swayed by such visions’.

Even though Pinker argues that we should not expect our explanation for the decline in violence to fall out of a unified theory of cultural evolution, it seems to me that he is actually not far away from developing such a theory. His linking of growing skills in abstract reasoning (the so-called Flynn effect) with Adam Smith’s concept of the impartial spectator is a major contribution.  As I have argued previously, however, the extent to which we develop impartial spectators that influence our behaviour must depend on the context of social interactions that reward particular behaviours and penalize others. The prisoner’s dilemma model and the concept of moral progress as positive sum game, which Pinker uses in his final chapter, seem to me to be on the right track toward development of a unified theory of cultural evolution.

It seems to me that a theory of cultural evolution should have four central ingredients:  a vision of ethical behaviour promulgated by the major world religions; the sense of personal identity of individuals in different communities and cultures; the incentives individuals have to change the way they perceive themselves and the way others perceive them; and the incentives of groups to change the rules of the game that determine individual incentives.

The golden rule of treating others as one would like to be treated oneself qualifies as the vision of ethical behaviour. A person who perceives himself or herself as the kind of person who acts in accordance with the golden rule is likely to obtain satisfaction from acting in accordance with this ideal. The extent to which individuals perceive themselves in this way will depend on their perception of the incentives in their environment. If they perceive that people outside their family group or tribe are not to be trusted they will not risk attempting to engage with them in cooperative ventures or mutually beneficial exchange. If they perceive that the incentives in their environment favour predatory behaviour they will tend to adopt a sense of personal identity that enables them to feel comfortable with such behaviour. Since societies that adopt rules of the game which discourage predation will tend to be more successful in enabling individuals to flourish, there is an incentive to adopt similar rules of the game in other societies.

This model suggests that moral progress depends heavily on the extent to which individuals perceive that others can be trusted. This is supported by research, some reported on this blog, which has shown that the countries in which community values are most strongly supported tend to be those with relatively high levels of social trust. An implication of the importance of trust, however, is that moral progress of societies may tend to be somewhat fragile.

Postscript:
I keep referring to 'The Better Angels ...', particularly the 'escalator of reason'. There are references here and here.

In my view 'The Better Angels of our Nature' is one of those books that people will still be referring to in 50 years time.