Has Francis Got It Right?

Now that the pope's climate encyclical has had a few days to settle, we can see another value to it: it has stimulated (alongside some incredibly dismissive conservative reactions) a healthy debate on many sides, including in the New York Times, which has not been a steady contributor to that debate. Perhaps the most interesting of these was the op-ed by philosopher Joseph Heath, who respectfully challenges Francis's critique of carbon exchange markets. The encyclical roundly decries speculation in these markets, and deployment of market forces in general. Francis advocates instead a morality of austerity and sacrifice, a refusal of consumerism and limitless growth in the material sphere--themes that have inspired this pope and most of his modern predecessors in contexts quite distinct from environmental crises.

I must admit to a certain hostility to consumerism myself, an attraction to frugality, and a desire that Americans and other profligates would reduce their consumption of fossil fuels and other stuff as well. But could this be policy? For all the moral clarity of his critique, I'm not sure Pope Francis in these passages is leading us to a useful set of solutions. As Heath and many others have noted, the consensus among economists that only carbon market adjustments can reduce greenhouse gas emissions is just as strong as the climate change hypothesis among earth scientists. Even the pope should be wary of cherry picking his science.

But is the confidence in carbon exchange markets well placed? The subject is very technical, but I'm not at all convinced. First there is the justice problem: would the accrued wealth of developed nations be translated into continued high levels of carbon emission, while the gap in energy consumption between them and the poorer nations remains unaltered? More pragmatically, at what price are carbon allowances to be traded? If the price is too low--as seems to have happened in Europe--traders trade without particularly encouraging any reduction in carbon or transfer to renewable sources. Some experts in California claim their carbon exchange has been more effective, but I'd need to see a lot more evidence--not market theory--before I was convinced.

And that brings us back to the larger scope of Francis's critique: his language is deeply suspicious of capitalist market forces, because he can see how corrosive they are of communal goals such as the shared stewardship of the earth. Can such means be directed toward a very different, collectively beneficial end? History is not encouraging, and neither is the behavior of the largest players, the energy companies. As these corporations become advocates for carbon markets, are they anticipating reductions in profit, or a new set of market manipulations that will leave us on the same road to catastrophe? Francis suspects the latter; so do I. Maybe we're both just ignorant of economics, and saturated in left-wing hatred of so-called free markets. I frankly don't see how to translate that anti-market (anti-liberal in Heath's terms) ideology into viable climate policy. But if international carbon markets are established at the Paris conference or in its aftermath, we should all be concerned that market forces might simply reconfigure the status quo without driving the huge energy transformation we need.