Combating Climate Change with Robert Stavins

Fifteen Minutes sat down with Professor Robert N. Stavins, Director of the Harvard Environmental Economics Program, to talk about cap-and-trade, the Peace Corps, and what individuals can do to combat climate change.

Practically every surface in Robert N. Stavins’ office, including the door, is covered with one of three keepsakes — mementos from places he has visited and conferences he has attended, pictures of his family, or magnets with schedules of the Red Sox or Harvard sports teams. Stavins is the Director of the Harvard Environmental Economics Program at the Kennedy School, where he studies and teaches about the impact of resource use on the environment. Today, he is considered one of the world’s leading environmental economists. He has had a monumental influence on global climate policy, participating in many of the most significant discussions on climate change over the past thirty years, including the United Nations Intergovernmental Panel on Climate Change and the UN Conference of the Parties, which produced the Paris Climate Agreement in 2015.

Fifteen Minutes sat down with Professor Stavins to talk about cap-and-trade, the Peace Corps, and what individuals can do to combat climate change. This interview has been edited for length and clarity.

FM: How did you first become interested in the field of environmental economics?

RS: I started out interested in the environment and then went to economics. Whereas I think most environmental economists were economists and then they got interested in environment. For me, it started when I was in the Peace Corps. After I graduated from college I went to Sierra Leone, in West Africa, with the Peace Corps. I was there for about four and a half years. I was working in the development of lowland rice — paddy rice growing — and that's where I experienced for the first time the tradeoff between economic development and environmental quality.

FM: You've written a lot about international linkage [economic cooperation between different countries] as a way to solve climate problems, specifically the approach of cap-and-trade [a system that sets an international requirement for emissions reductions and then allows countries that exceed the requirement to sell excess emissions to countries that haven’t reduced their emissions enough]. What are your views on cap-and-trade specifically and the idea of international linkage more generally?

RS: Cap-and-trade is by no means appropriate for all environmental problems, but [it is] for certain environmental problems, namely those for which it doesn't matter where the emissions come from and what matters is the aggregate amount of the total. That's how we got leaded gasoline out of the market during the Reagan administration in the 1980s. And then it's how we cut acid rain by half in the George H.W. Bush administration with the Clean Air Act Amendments in 1990. These were very good applications. Climate change is also an excellent application, the reason being that greenhouse gases mix in the atmosphere, so it doesn't matter if a ton of carbon dioxide comes from Cambridge, Massachusetts, Beijing, China, or London, England — it's going to have the exact same effect. The result is that the overall target is achieved at the lowest possible cost in total, and that's the merit of these approaches. It's very pragmatic.

FM: You mentioned that your inspiration to become an environmental economist came from the time that you spent in Sierra Leone. What role do you think developing countries should play in the overall international goal of reducing the impact of climate change? How do they fit into the equation?

RS: This is the most important question and the greatest challenge addressing climate change because economists often look at efficiency and cost effectiveness. But distributional equity — fairness — is extremely important in the case of global climate change, and that's because countries have very different wealth. Some countries are wealthier than others, and some countries have contributed more than others to the accumulated stock of greenhouse gases in the atmosphere. It's a principle of distributional equity.

There's a very important role for developing countries, but I would separate them into two groups. One is the large emerging economies: China, India, Brazil, Korea, South Africa, Mexico, and Indonesia. Those countries are very large, with relatively rapid rates of economic growth compared to the industrialized world. The emissions from the industrialized world are flat or declining, so it's impossible to reduce emissions without those countries. The second group is the small, poor developing countries, but their emissions are trivial [relative to the large emerging economies]. The reason the Paris Climate Agreement was a partial success was that it brought the large emerging economies and the industrialized countries all on board, in particular, two countries: China and the United States.

FM: Is it feasible for economics alone to fix the problem of climate change? Is it feasible for clean energy alone to fix the problem? What is the relationship between the two?

RS: In general, it's ludicrous to think that any single policy is going to be able to do the job. Now, having said that, I think that it's going to have to involve market forces, either carbon taxes or cap-and-trade certainly in the industrialized countries and in large, complex economies.

It would be impossible to reduce emissions through individual performance standards or technology standards because it's not just electricity generation. It's every commercial facility, it's every residence, it's every motor vehicle, it’s every backyard barbecue grill, it’s every lawn mower. So the only way to solve that is by sending signals through the economy. Now, that's for the short term, but for the long term, it's certainly true that a huge amount of technological change is going to be required in order to do the job. With existing technologies, it would both be very costly and virtually impossible to reduce emissions to zero, which eventually is going to be what's necessary. For that, a great deal of technological change is going to be required.

Carbon pricing is necessary, but not sufficient. Technology policies that subsidize technology development or research — those kinds of policies are also necessary, but not sufficient. We need both.

FM: There's been a lot of discussion lately on the national level about the Green New Deal. What is your take on the Green New Deal? Is it feasible — politically or economically?

RS: The Green New Deal is a set of aspirations — very inspirational aspirations for a lot of people. But there is nothing that specifies what the policy instruments would be to achieve those aspirations. They are extremely ambitious. It's over my pay grade to say whether or not having extremely ambitious aspirations inspires action or whether they're so ambitious that people throw up their hands. Some people would point out that the Green New Deal may be one of the elements of the Democratic platform that will help to re-elect Donald Trump, because they are a set of essentially infeasible targets that are easily characterized in negative ways, which Republicans have already started to do.

FM: What is the responsibility of the average individual in confronting the issue of climate change?

RS: I've been bipartisan, working with both parties in the White House and with members of Congress on both sides of the aisle, but my honest answer is that if you live in the United States and you want to do something about climate change, the most important thing that you as an individual can do is to get involved in the next campaign. Make sure your friends get out and vote, because that's the way you can most affect things at this point.

Beyond that, though, there's a lot one can do. One can be doing very progressive work vis-a-vis climate change within private industry, one can be doing it within academia, or one could be doing it within non-governmental organizations. There's no particular sector that's cornered the market on wisdom or ability in this area.