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In this June 21, 2013 file photo, Fire Chief Rodney Schaefer stops to take a photo of a downed tree on a home and antique tractor in Rockville, Minn. after a strong overnight storm caused damage over much of central Minnesota.

Kimm Anderson, Dml - Associated Press - Ap

The world can't risk a rotten climate

  • Article by: K. BRIAN NOWAK
  • October 20, 2013 - 5:59 PM

Michael Gerson gets it right with his argument that science alone can’t turn the tide for climate change (“On climate, the politics are frozen,” Oct. 14). Gerson contends that “the magnitude of future disruption is a matter of scientific debate … but … uncertainty is not a good justification for complacency. Which explains the existence of the insurance industry.” He concludes that the facts around climate leads to “justified … skepticism … about the ability of political institutions to respond prudently to scientific risk when there is little political reward.”

Gerson leaves the reader in a hopeless place. If the past few weeks have taught us anything, it’s that Congress will go to ridiculous lengths to pursue ideological goals around money and freedom. If it won’t act on science, it will respond to the public concern over taxpayers’ dollars being wasted. The reward is being a “money hero” not a “climate hero.”

Currently, politicians think that it will cost their constituents money to “fix climate change.” The truth is that taxpayers spend huge sums to deal with the damage of climate change every year. Take disaster relief. Most Americans think that the insurance industry pays for that, right? Wrong. Last year, 2012, was the second-most-costly year for climate disasters; the Natural Resources Defense Council reported in May that the cost of disaster relief was $139 billion and that private insurance paid only $33 billion, about 25 percent. Taxpayers covered $96 billion in losses — more than they spent on 12 other non­defense line items on the U.S. budget.

One might contend that 2005 or 2012 disasters were flukes, that science can’t prove with 100 percent certainty that climate change is the cause. But when we’re talking budgets, it’s risk management that wins the day. As Gerson says, the absolute science is “irrelevant.” Politicians need to look elsewhere to solve this budget problem caused by climate.

Politicians use economic constructs to justify their money policies; economists have more street cred in Congress than do scientists. Actuaries are economists who assess risk for the insurance industry; if their math doesn’t work, their companies don’t make money. Insurance companies make a lot of money, so it turns out that actuaries do a great job. The brightest actuaries work for the companies that insure the insurance industry itself; they’re called reinsurance companies. They understand the risk of climate change and natural disasters. Here’s what Munich-RE has to say: “North America’s weather related losses increased by five times over the last three decades. Climate change caused by human actions is a big factor, nature is also partly responsible.”

It’s all about risk management.

Doing nothing about climate is not politically viable as problems grow. If the political will to act comes from the growing awareness of the public cost of climate change catastrophes, how do politicians become money heroes and mitigate the cost of public disaster payments?

In the current political arena, climate solutions need to be revenue-neutral and not grow government. Solutions need to directly go to the primary cause of the problem for the money to solve the problem. If politicians trust economists more than scientists, the solution that has been proposed is a carbon tax that increases over time. It’s a free-­market solution that lets private industry sort out the technology to get us off fossil fuel and will give consumers a choice. A payment back to taxpayers from the revenue collected is what makes it “revenue-neutral.”

This is not a new idea; it has been brought forth repeatedly, not by progressives but by conservative economists like George Schultz, Art Laffer and Greg Mankiw.

We can’t do a tax, you say? Where do you think the money comes from to pay for disaster relief? A tax on fossil fuel will kill jobs, you say? British Columbia has had a carbon tax since 2008, and its economy has done better than the rest of Canada.

If people name the problem, the cost and the loss of freedom from a reliance on a single source of energy, the political will to solve the problem of climate change will rise up.

K. Brian Nowak is chair of education and outreach at MN350.

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