The green paradox : a supply-side approach to global warming

286 Pages·2012·5.883 MB·English

by  Sinn, Hans-Werner

The Green Paradox

The Green Paradox
A Supply-Side Approach to Global Warming
Hans-Werner Sinn
The MIT Press
Cambridge, Massachusetts
London, England
© 2012 Massachusetts Institute of Technology
All rights reserved. No part of this book may be reproduced in any form by any
electronic or mechanical means (including photocopying, recording, or information
storage and retrieval) without permission in writing from the publisher.
For information on quantity discounts, email [email protected].
Set in Sabon by Toppan Best-set Premedia Limited. Printed and bound in the United
States of America.
Library of Congress Cataloging-in-Publication Data
Sinn, Hans-Werner.
The green paradox : a supply-side approach to global warming / Hans-Werner Sinn.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-262-01668-0 (hardcover : alk. paper) 1. Carbon offsetting. 2. Supply-side
economics. 3. Global warming. I. Title.
HC79.P55S574 2012
363.738'746— dc23
2011020801
10 9 8 7 6 5 4 3 2 1
for Hans Heinrich Nachtkamp, who taught me intertemporal
economics

Contents

Preface xi
1 Why the Earth Is Getting Warmer 1
Just a tiny little bit 1
The greenhouse effect 3
Why it all comes down to carbon dioxide 6
Other greenhouse gases 9
The human influence 12
One more degree already 14
The past 800,000 years 17
Correlation and causality: A solvable puzzle 21
On to the North Pole 24
How warm will it get? 25
What is so bad about it? 29
2 Reshaping the World’ s Energy Matrix 33
The first climate accords 33
The Kyoto Protocol 35
The climate sinners 38
The world ’ s energy matrix 40
“ Green ” electricity 44
The nuclear alternative 48
Storing fossil-fuel waste and nuclear waste 53
Space or waste? 61
How long will the fossil and nuclear fuels last? 65
Cheap and expensive ways to reduce the emission of CO 70
2
The law of one price and the European emissions
trading system 72
viii Contents
Feed-in tariffs, instrumental goals, and European
policy chaos 79
3 Table or Tank? 85
Capturing the sun 85
What is bioenergy? 88
“ Green ” gasoline 91
More than electricity 93
A dubious eco-balance sheet 96
The BtL hope 99
Slash and burn 100
One hectare for me! 102
Farmers to OPEC! 107
The Tortilla Crisis 113
The Ratchet Effect 115
A tale of carbon and man 117
4 The Neglected Supply Side 125
Reckoning without one’ s host 125
The missing regulating screw 130
Supply and demand 132
How “ green ” policies shift the demand curve 136
Rembrandts vs. cars: The carbon supply 140
Carbon leakage: Grabbing from the collection box 143
Nature ’ s supply 148
How much stays in the air? 149
At the mercy of the sheikhs 157
What drives the resource owners? 159
Greed and sustainability 163
Nirvana ethics 165
Wrong expectations 166
The social norm 167
Why extracting more slowly makes the cake bigger 172
Why carbon deposits should not be sealed off 175
The fear of a coup 178
5 Fighting the Green Paradox 183
The impotence of politics 183
The Green Paradox 188
A bit of theory 192
Contents ix
The Green Paradox and carbon leakage 196
Will production costs and replacement technologies
stop extraction? 201
Temporary and permanent price changes 207
Paling green 208
Super-Kyoto 209
Leading by example? 213
Source taxes: A supply-side policy 216
Carbon tax terrors 220
More forests 227
Instruments and goals 229
Notes 235
Index 261