Wednesday, April 16, 2014

Is it foolish to act locally on global problems?

I'm late and out-of-order on my blog posting activities, in part because I've been blogging a little on energy in a different forum (a new schtick for me).  Anyhow, that experience has me thinking more broadly about climate change and policy.  Since I don't have any great new statistics to report, I'm going to change gears and scratch an uncomfortable itch on our climate problem.

Economists see that this is a global problem and typically argue that solving it requires global action.  The whole developed world can go carbon neutral, but this means little if China and India don't follow suit. Yet we have little apparent ability to act on even a national scale, let alone a global one.

Instead, in fits and starts, we're seeing states like California and Hawai'i, and the EU, take action, seemingly despite themselves.  Yesterday I heard Barbara Boxer talk about California's cap and trade program and strict new fuel economy standards.  Hawai'i has the most ambitious clean energy goals in the country, goals we are nevertheless likely to exceed, perhaps by a wide margin.  But what California (and certainly Hawai'i) does or doesn't do to reduce greenhouse gas emissions is simply trivial.

These countries and states enact policies to reduce greenhouse gas emissions, some of which may be costly, even though local actions will have little bearing on our global problem.  Worse, some states, by acting locally, might put their regions at a competitive disadvantage economically.  So, acting locally appears to be all cost and no benefit.

How foolish is it to act locally on what is truly a global problem?  Quite, might say some respected economics.

I'm a little less cynical and increasingly believe that local actions might make a difference, and possibly thrive by taking unilateral action.  Here are four five reasons why:

(1) Acting locally can demonstrate proof of concept.  Curbing greenhouse gas emissions really shouldn't be that costly.  But while IPCC and CBO reports are nice, showing it can really be done without killing an economy is a lot more compelling.  A state, even a tiny one like Hawaii, can do this, which will lower the costs for others to follow suit.

(2) Local successes can be leveraged to provide moral, social and political pressure to invoke action on a larger scale. Prices can motivate behavior.  But positive examples can too.

(3) Early adopters may even gain economically in the short run.  Even if we don't have national or global policies today, we may expect them in the future.  New technologies and businesses need to be developed, and environmental entrepreneurs and startups may gravitate toward places on the cutting edge of going green.  This kind of thing is happening here in Hawaii.  It's small in scale, but could grow.  And these companies, and economies where they sit, could then be positioned to boom when larger scale policies are put in place.

(4) Spillover effects from technological development could be tremendous.  Local economies may not gain directly as ideas developed locally are replicated.  But they do gain indirectly by reduced greenhouse gas emissions.  Green technology is not necessarily the intellectual property we want to protect.

(5) For a tourist economy like Hawaii, Green branding might have an advertising benefit.

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