I am among the semi-irregular contributers to the REConHub; a new blog from the Norwegian School of Economics. I recently posted a review of the book ‘But Will the Planet Notice?’ by Gernot Wagner. Here goes:
But Will the Planet Notice? is a book about climate change and economic tools and mechanisms designed to help. But Wagner ranges far and wide, discussing issues like deforestation, DDT and heavy metals pollution, overfishing, endangered species, the collapse of the Easter Island civilization, and geoengineering. In the process, he reviews work by people like Martin Weitzman, Robert Stavins, Elinor Ostrom (as one would expect, I might add), and a long list of other prominent people. Most of the issues relate to the commons problem, a well-known problem in economics: If property-rights to a resource like a fish stock or clean air are un- or ill-defined, there is usually a commons problem. Overexploitation of the resource is the typical result. On the contrary, when property-rights are in place, resource-users will have to compensate the holder of the property-right for their usage, and (economic) overexploitation will probably not happen. The climate problem is a classic commons problem, as atmospheric property-rights does not exist.
In the eyes of (the economist) Wagner, economists are at the center of the climate change problem:
Scientists can tell us how bad it will get. Activists can make us pay attention to the ensuing instabilities and make politicians take note. When the task comes to formulating policy, only economists can help guide us out of this morass and save the planet (p. 11, first edition).
Let me add that the subtitle of Wagner’s book is How Smart Economics Can Save The World. Save the world, no less. Now, the short answer to insufficient property rights is to establish sufficient property rights. If one is interested in the long answer, it quickly becomes complicated. Coase taught us that it matters who owns property rights and how they are traded. Wagner does not get into this, or the other ideas and concepts he touches upon, to any serious degree. I think it is unfortunate. A deeper and more detailed discussion, with fewer detours to discuss related issues, would be more interesting and valuable. Wagner’s idea of a solution to the climate problem is to cap carbon dioxide emissions and make the emissions rights tradable. Exactly how and why this would work, is not left much space.
An important message for Wagner, one which even inspired the title of his book, is that small, individual, and uncoordinated adjustments to deal with the climate problem will not help. In order to drive the message home, he uses a very odd, rhetorical trick: He gives the planet, the physical planet, and other parts of the physical world, an opinion, and asks: Will the planet notice our individual adjustments? Does the atmosphere care? (It does not, according to Wagner. If anyone used me as a sewage, one of Wagner’s metaphors for how the atmosphere gets treated, I would certainly care for even the smallest adjustment.) While the personification of things environment might be a great idea (how would I know?), I have my doubts. I find it annoying. Nevertheless, despite the lack of impact , we should still make small (or large), voluntary adjustments to reduce our personal carbon footprint, Wagner says. It is the moral thing to do.
There’s simply no way to go about tackling this problem other than taking seriously the incentives all of us face. Getting several billion of us to behave differently-to behave morally-means guiding market forces in the right direction, making it in our interest to do the right thing. It’s the only way to make the planet notice (p. 216).
Here, Wagner passes upon the opportunity to discuss the ethics of climate change, which I think would have been interesting. (Not even a reference-laden footnote, if I remember correctly.) I am not so sure the casual reader or layperson would feel compelled to make voluntary lifestyle adjustments just because he ought to, when it has no impact, the atmosphere does not care, and no weight is put on why he still should.
Wagner got his economics training from great places, and is well-read. It shines through. He cites most of the canoncial resource and environmental economics literature, but also a lot of stuff I was unaware of, stuff I probably should know already. (Note to self: Read up.) He also refers to much interesting main stream writings. Unfortunately, Wagner does not provide a list of references. I find it odd, as the type of book usually provides a reference list. Keeping track and finding back to the references of interest require more effort than what it would otherwise.
In conclusion, I cannot recommend Wagner’s book. (And I apologize; I always think reviews should be written by someone enthusiastic about the work. It makes for more interesting reviews.) He brings little, if anything, new to the climate change discussion. While the book could have been a must-have for students and even some professionals, the missing reference list makes it not so. The weird personification of the planet, the atmosphere, and other physical, dead, unconscious things downgrades the book further on my part.