Approximately 5’ minutes reading time
Excellent articles by The New York Times on the Climate Issue of April 9, 2019.
- The Problem With Putting a Price on the End of the World
- Climate Change Could Destroy His Home in Peru. So He Sued an Energy Company in Germany.
The first one is about economics and policy in relation to climate change. The second is about law, ethics and capitalism.
I found them both fascinating, especially the second one. In an alternate universe, I practice law as an attorney and have a background in philosophy.
Here are my takeaways. Market economics like “Price elasticity of demand” might make sense in theory, but in practice may not work as expected. Even more so when used in an effort to bring social change.
When a product becomes more expensive, people use less of it. Carbon pricing is an elegant mechanism by which market economics can work on behalf of the climate rather than against it. But if the idea’s straightforwardness is its great economic advantage, it has also proved to be its political flaw. Energy, for utilities and transportation, is a major cost of living. And across the industrialized world, the middle class and the poor have been struggling with slow income growth.
The Yellow vests movement, still ongoing, is a prime example of social unrest in response to carbon tax. In a financially strained society, people perceived the carbon tax as unjust rather than being persuaded to look for cheaper alternatives to warm their house and drive their cars.
The question is whether any policy is both big enough to matter and popular enough to happen.
Arizona, Michigan and Nevada tried to rally people behind clean energy while at the same time putting the responsibility squarely on energy companies. The goal was to incentivise people to opt for clean energy while at the same time making renewables more profitable for businesses through the use of performance standards. Keep the last part in mind; off to Peru.
On Dec. 13, 1941, a piece broke off a hanging glacier and fell into Palcacocha, creating a great wave that overwhelmed a natural dam and sent a flood surging toward Huaraz, a provincial capital in the Peruvian Andes, about 14 miles below. A third of the city was destroyed and at least 1,800 people were killed.
Since then, the government has posted guardians to watch the lake, measuring water levels, reporting on avalanches etc. due to the risk of flooding. In the meantime, local farmers that depend on the lake have concerns over the diminishing clean water.
“I depend, in every sense, on the mountain,” he told me. “It is everything.”
A man named Saúl Luciano Lliuya, “who had never left his country”, took it upon himself to travel to Germany and file a lawsuit against an energy company for sharing some of the responsibility. The “crazy” thing is that this German energy company does not operate in Peru nor there is evidence that is directly responsible for the ice melting. Still, the lawsuit is about the impact its operations have on the climate on a global scale!
Beginning in the 1990s, courts began to find tobacco companies liable for the health effects of cigarette smoking, even though smokers used their products willingly and even though the first 800 or so lawsuits against the companies failed.
Back then, the tobacco industry in its defence claimed that people made a choice to smoke hence it can’t be held responsible. Eventually, a subpoena to turn over internal documents proved that companies knew smoking was harmful. In an effort to maximise profits, appease shareholders and stay afloat, individuals practiced the art of deceit.
Today, this is one of the arguments energy companies are making too. People choose how to warm their homes and drive their cars. But do they, when income inequality is so prevalent in societies today?
And when New York City filed suit against BP and others, the companies responded that the city, because of its use of the oil industry’s products in its own police cars and garbage trucks and so on, shouldn’t be able to sue because it had what’s known as “unclean hands.” If everyone is at fault, the argument goes, no one can be held responsible.
The same argument you’ll hear from a kid caught eating a cookie from the jar, pointing the finger back at you exclaiming “You made them!”
But the parallels aren’t perfect. Unlike tobacco, energy companies have argued, the existence of the fossil-fuel economy has provided considerable advantages to society.
Except when energy companies lobby for coal, crude oil, fracking in an effort to keep existing profits, unless compelled by law to do otherwise. Think back to the campaign on clean energy and regulation based on performance standards.
That companies actively prevented the development of alternative energy sources and the regulation of carbon-intensive ones, thus politically and economically propping up a polluting system. “It’s incorrect to say that there’s a strong public demand for fossil fuels,” Sher, the plaintiffs’ lawyer, told me. “What we have is a desire for energy.”
Markets may decide on the price of goods and services. Individuals may act out of self-interest causing harm and resulting in people’s death but as long as morals guide us and justice prevails, I am hopeful for the future. “The arc of the moral universe is long, but it bends toward justice.”