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At the same time, access to emergency food, water and medical care has dramatically improved over the past half century in most—but not all—countries. And the primary reason for that is the removal of barriers to trade, which has both enabled people to escape from poverty and ensures that when crisis occurs, entrepreneurs and philanthropists are able to deliver goods and services to those who need them. Matt Ridley notes that “In 2007 Hurricane Dean, a Category 5 storm, struck the Yucatan in capitalist, middle-income Mexico, but the country was well prepared and not a single person died. A year later a storm of similar ferocity hit impoverished, authoritarian Burma and killed about 200,000 people.”
Moreover, and contrary to claims that tropical cyclones are causing increasing economic damage, Roger Pielke Jr and colleagues have shown that “normalized damage” (i.e. the implied damage at equivalent levels of economic development) from tropical cyclones has not increased as a percentage of GDP since at least 1900 in the US or globally since 1970 (the earliest date for which globally comparable data is available) (for updated numbers, see Pielke’s Senate Testimony here).
The implications are clear. The best way to reduce the impact of future tropical cyclones is through a combination of good governance and economic freedom. Good governance (by which I mean government that is responsive, accountable and subject to the rule of law) is necessary to ensure that suitable sea defenses, early warning systems and transportation infrastructure (roads, airports, etc.) are established. Economic freedom (especially the ability to own property and engage in trade without undue bureaucratic interference) leads to enterprise, innovation and economic development, ensuring that individuals are better able to withstand the impact of a cyclone.
Sadly, while the Philippines had early warnings of Haiyan (NASA had forecast that it would hit the central Philippines two days before it made landfall), it generally lacks either good governance or economic freedom: it currently ranks 105 (of 174) on Transparency International’s Corruption Perception Index (a measure of governance) and 97 (of 161) on the Heritage/Wall Street Journal Index of Economic Freedom and is classified as “mostly unfree”. That’s why attempts to evacuate people ahead of Haiyan were mostly a chaotic failure and why even now, a week after the storm hit, supplies of food, water and medicine are not reaching people who need them.
It makes sense to implement policies that would reduce carbon emissions if so doing increases economic freedom. Examples include removing unnecessary barriers to natural gas and other energy projects, eliminating subsidies to energy and flood insurance, scrapping undue restrictions on biotechnology and nanotechnology. Unfortunately, attempts to reduce greenhouse gas emissions beyond these “no regrets” policies would likely be counterproductive.
In the U.S., renewable energy mandates have imposed enormous costs on producers and consumers, harming especially the poorest. Many other interventions ostensibly aimed at reducing emissions of greenhouse gases impose even greater costs per unit of carbon dioxide reduced. Future regulations on emissions of greenhouse gases from coal-fired power stations will likely exacerbate these problems by forcing the early and wasteful closure of existing facilities, necessitating the construction of new (mostly gas-fired) plants before they would otherwise have been built—thereby diverting resources to energy production that otherwise might have been invested in other, more innovative technologies. Adding a carbon tax on top of all these regulations would add insult to injury.
Political leaders have begun to realize that attempting to regulate carbon dioxide emissions is both economically and politically damaging. On Tuesday, Australia’s newly elected Prime Minister, Tony Abbott, introduced legislation to repeal the country’s carbon tax. Canada’s Prime Minister, Stephen Harper, reportedly praised the action. In the U.K., the non-partisan Commons Energy and Climate Change Committee has urged a reduction in energy taxes.
Leaders in India, China, Brazil and South Africa made the same realization some time ago, which is why they have refused to agree to any restrictions on emissions unless they receive large amounts of compensation – on the premise that climate change cause by emissions from rich countries is causing loss and damage.
But if voters in rich countries are already balking at higher energy costs due to carbon controls, they’re hardly going to sanction the payment of bribes to foreign nations so that everyone can suffer even higher energy costs! That’s why in an October 22 speech in London full of hubristic talk of a global agreement, the U.S. chief climate negotiator, Todd Stern, made the following telling comment:
“Now the hard reality: no step change in overall levels of public funding from developed countries is likely to come anytime soon. The fiscal reality of the United States and other developed countries is not going to allow it. This is not just a matter of the recent financial crisis; it is structural, based on the huge obligations we face from aging populations and other pressing needs for infrastructure, education, health care and the like. We must and will strive to keep increasing our climate finance, but it is important that all of us see the world as it is.”
So, to reiterate, forecasts of cyclonic doom should be consumed with a heaped tablespoon of sea salt. And policies should be framed accordingly. Instead of trekking to Warsaw for another pointless gabfest, energy and environment ministers should stay at home to sort out the ridiculous messes they and their predecessors have created, often in the name of saving the planet. They should focus, to begin with, on scrapping the plethora of subsidies and regulations that are weighing down our economies and preventing us from adapting to change.