An Interview With Thomas Schelling, Part Two

This is the second part of my interview with Nobel Prize-winning economist Thomas Schelling. Part one is here. In this part we talk very generally about climate change: Why it matters, and whether or not it's possible to reach an international agreement on the issue. My questions are in bold.

I wanted to go back to the international climate-change negotiation process. So assuming we had a perfect U.S. bill -- written by you or by 15 experts working on this full time -- how would the international negotiation process work? It's not obvious that averting global climate change is in the rational self-interest of anyone that is alive today. The serious consequences probably won't occur until 2080 or 2100 or thereafter. That's one problem. Another problem is that those consequences are going to be distributed in a radically uneven way. The northwest of the United States might actually benefit. So how does a negotiation process work? How does a generation today negotiate on behalf of future generations? And how do we negotiate when the costs are distributed so unevenly?

Well I do think that one of the difficulties is that most of the beneficiaries aren't yet born. More than that: Most of the beneficiaries will be born in what we now call the developing world. By 2080 or 2100 five-sixths of the population, at least, will be in places like China, India, Indonesia, Africa and so forth. And what I don't know is whether Americans are really willing to understand that and do anything for the benefit of the unborn Chinese.

It's a tough sell. And probably you have to find ways to exaggerate the threat. And you can in fact find ways to make the threat serious. I think there's a significant likelihood of a kind of a runaway release of carbon and methane from permafrost, and from huge offshore deposits of methane all around the world. If you begin to get methane leaking on a large scale -- even though methane doesn't stay in the atmosphere very long -- it might warm things up fast enough that it will induce further methane release, which will warm things up more, which will release more. And that will create a huge multiplier effect, and it could become very serious.

And you mean serious for everyone, including the United States?

Yes, for almost anybody.

And when you say, "exaggerate the costs" do you mean, American politicians should exaggerate the costs to the American public, to get American support for a bill that will overwhelmingly benefit the developing world?

[Laughs] It's very hard to get honest people.

Well, part of me sympathizes with the case for disingenuousness! I mean, it seems to me that there is a strong moral case for helping unborn Bangladeshi citizens. But I don't know how you sell that. It's not in anyone's rational interest, at least in the US, to legislate on that basis.

That's a problem. The standard of living in the United States will almost certainly be higher in 80 years than it is now.

And do you think that's true of India?

No! I think the best hope for India is to grow its economy as fast as it can in order to outgrow its vulnerability to climate change. Most of the vulnerability is agriculture. And I think the impact on agriculture is especially worrying in areas that are dependent on snowpack in the high mountains. That's true of China, India, Burma, Bangladesh, Pakistan, Peru, Chile and Argentina. It's even true of California! One of the worst effects is going to be, that what would have been snow falls as rain. Or what would have been thawing the late spring becomes thawing the early spring, and what these nations depend on for irrigation will have run into the ocean before they can use it -- unless there are huge efforts to build water storage and transport units. Which require an immense process of building dams and so forth, which I don't think anyone is willing to face up to yet.

If I were to come clean to the American public I would say that, except for a very low probability of a very bad result -- which is the disintegration of the West Antarctic ice sheet, which would put Washington DC under water -- we are probably going to outgrow any vulnerability we have to climate change. And in case we'll be able to afford to buy food or import it is necessary. You know, very little of the US economy is susceptible to climate. All of agriculture is less than 3% of our gross product. Forestry may be endangered. Fisheries may be endangered. But recreation might actually benefit!

So if we can double our GDP in the next 70 or 80 years, even if we lose some of our GDP from climate change -- even if we lose 10% of our GDP from climate change -- we're still ahead so much that the effect of climate change wouldn't be noticed. But it would be pretty disastrous in a lot of the less developed parts of the world. And that's why I think it's crucially important not to demand anything of China, India and so forth that will significantly impede their economic progress.

And there's sort of a cruel paradox there. On the one hand, it does seem like you want to say to India and China, "Grow your economies so that you have a greater capacity to adapt to climate change." On the other hand, it seems like that growth will also exacerbate the effects of the climate change. It seems like the growth that creates adaptive capacity is racing against the growth that is aggravating what the adaptive capacity is needed to protect against.

Yeah, except that if the developed countries -- the OECD or something like that, plus Japan -- if they are really serious, they'll tell India and China and Brazil, "we're going to provide enormous assistance to help reduce your dependence on fossil fuels. And we don't expect you to pay for it yourselves. We will pay for it because we're rich and you're not." But once we get whatever we're going to get -- you know, our own Waxman-Markey kind of thing, and some of the European countries have that too -- then I think we have to decide which developing countries participate, to what extent and so forth. We're going to have to find some institutions that determine which developing countries get the assistance, and how much. And we're going to have to have some intermediate organization to administer the funds and ensure that they are used for what they are intended for. This will have to be something at least on the scale of the old Marshall Plan.

But while people talk about this -- the need for aid from the developed countries -- nobody that I know of is thinking about how in the world you organize so that the rich countries can agree what you do with the poor. You need to know who divides the money, and who monitors is. We're going to need a whole new set of institutions, beyond the Copenhagen kind of institutions, where the rich countries decide what they're going to do about their own emissions.

Occasionally you see from people who are critical of Waxman-Markey -- or any mechanism for pricing carbon today -- you see the argument that the developing world will be best served by ignoring a pricing system altogether, and having the world grow as fast as possible, and having the kind of massive redistribution scheme you described above. So is it necessary to price carbon at all, if you assume that in the future some institutions will emerge that do the kind of redistribution you describe?

That's a hard thing to talk about -- this notion that we're going to commit ourselves to massive redistribution long after you and I are dead. I think it makes more sense early on to display some kind of sacrifice.

The rich counties -- especially the United States -- do so little in the way of foreign aid right now. The newspaper reports this morning that the rich world will devote an additional $20 billion over the next few years for food in Africa. Well, these are piddling amounts.

It's very hard to get Americans to engage in what they think will be suffering not just for the polar bears but for the poor around the world who will indeed suffer if they can't outgrow their vulnerability to climate change. I think there is reason for everyone to worry if temperatures go up six or eight degrees. As could happen.

But that is not likely to happen for a long time, is it?

Well, I think it could happen as we enter the 22nd century. But the great uncertainty, again, has to do with these huge quantities of methane: these deposits warm up, and the methane begins to be released, and then you have a runaway release.

The other problem with this is in poor countries like Mexico and China. Almost all of them have methane deposits on the continental shelves, not too deep. And one of the difficulties with methane is that when you burn it, it releases only half the carbon dioxide per calorie as coal. But if you release methane, and it leaks into the atmosphere as a gas, it's 25 times or 30 times as potent as carbon dioxide. My worry is that when developing countries decide to go after these methane deposits, they aren't going to worry about 2 or 3 or 5 percent leakage, or worry about these deposits that break open spontaneously. And I think it's going to be important for the rich countries -- who can afford it -- to develop the technology to tap that methane in a way that doesn't cause leaks to the atmosphere. If you get methane leaks, you can have that runaway situation.

I wanted to ask one more question, to go back to the moral issue here. It does seem to me that the strongest case for mitigating the effects of global climate change is a moral one. It is based not on our own interest but on the interests of people in the developing world who don't yet exist. But it also seems to me that -- while I don't know much about game theory -- collective bargaining theories generally assume the participants are rational and self-interested. So how does one go about making sense of an arrangement where we must set our self-interest aside? How does one make the moral case in a situation like this? Or is my description of collective bargaining just totally idiotic?

Well, I think you have to realize that most people have very strong moral feelings. I think in a lot of cases they're misdirected. I wish moral feelings about a two-month old fetus were attached to hungry children in Africa. But I think people have very strong moral feelings. In fact, I'm always amazed by the number of people who at least pretend they're worried about the polar bears.

And one thing that I think ought to help but doesn't is that -- and my impression is that maybe this is slightly changing -- the organized churches in American don't take seriously preserving the heritage that God gave us. I've heard congressmen confess to being devote Episcopalians say that what god gave us ought to be preserved. But I get no impression that Protestants and Catholics are sermonizing on the importance of preserving the bounty of the earth, the richness of the species, or preserving the planet as we would like to know it. And I think that if someone could mobilize the church to be interested...

I spent a long time concerned with smoking behavior. And when I was a boy the churches were very adamant about smoking. And my grandfather, who was sort of devout, he wouldn't hire a boy to mow the lawn if he knew the boy smoked. And we know how potent the churches can be, because nobody smokes on campus at the University of Utah. And nobody smokes among the Seventh-Day Adventists or the Jehovah's Witnesses. And the Mormons aren't supposed to drink coke and coffee, let alone smoke.

And I think the churches don't realize that they could have a potent effect in not letting so much of gods legacy -- in terms of flora and fauna -- be destroyed by climate change.

But I tend to be rather pessimistic. I sometimes wish that we could have, over the next five or ten years, a lot of horrid things happening -- you know, like tornadoes in the Midwest and so forth -- that would get people very concerned about climate change. But I don't think that's going to happen.