Gernot Wagner on The Futility of Going Green and the Economics of What Really Matters (Podcast)

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If bringing your canvas bags to the grocery store, carpooling, and forgoing double cheeseburgers makes you feel good about yourself, terrific. But don't expect the planet to notice. What the world needs, says Environmental Defense Fund economist Gernot Wagner in his new book, is for us to put a price on carbon. Then things start to get interesting. After his clever hook is out of the way (Wagner himself is a car-less vegetarian), "But Will the Planet Notice?: How Smart Economics Can Save the World," is an astonishingly clever and engaging introduction to the mathematics of climate change and the inner workings of cap and trade. Your old economics teacher would be proud, and it might just save us all.

Full text after the jump.TreeHugger: Can you really look the TreeHugger audience in the eyes and tell them that all of the stuff they are doing to reduce their environmental footprint is worth nothing?

Gernot Wagner: Let me put a slightly different spin on this. Keep recycling. Keep bringing your canvas bags to the store. Keep biking to work. Keep doing all these things. But in addition to that, and that's the key point, make sure that you work on getting real policy change.

It's not that all these individual actions don't matter at all. Of course they matter to you. They matter greatly to you. It's that if you really look at the size of the problem, we know that we need to do more than that. It's simply not enough to make the planet notice just through recycling. We need to look to policy to drive real change.

TH: Close to the beginning of the book you mention "no impact man," AKA Collin Beavan. You say that he had exactly the intended effect: no impact. What does this mean for you in your own life? Do you continue with low impact living, or are these things irrelevant to you?

Wagner: Actually, I am probably fairly close to no impact man in the sense of the way he lives. I don't have a driver's license, for example. I've never driven in my life. I'm a vegetarian. I don't have a stroller for my six month old. If anything, I don't live the advice I give in the book. Once again, that's not really the message that comes out of the book. The message is that you need to ask yourself the question: "is that enough?"

That's also why no impact man has been a fairly good straw man for this exercise. At the end of the day, if it's only him making the difference here, he doesn't have an impact on the planet. It's about policy change. It is about larger market forces than any one of us individually can affect with whatever you do.

TH: So self-sacrifice is all well and good, but tapping into people's self interest via the mechanisms of the market is the way to go. There are so many bumper stickers out there with the Gandhi quote "be the change you wish to see in the world". Do you have an alternative sticker that sums up your economic policies?

Wagner: Good question. I probably should have. It is, essentially, "make policy change happen." And frankly, Gandhi was pretty successful in doing that. He did it differently. He built a movement from the bottom up and got people together who followed his advice. Not everyone who followed Gandhi took the exact same actions and went on hunger strikes and so on, but at the end of the day it was policy change that truly made the difference.

We can talk among friends here. This is TreeHugger radio and everyone here is convinced this is the right thing to do. And all of us are doing the right thing for the most part, or striving to. And many times that works against our self interest. And that's really unfortunate.

Outside of Berkley, Boulder, Brooklyn, and Boston it might be very tough to get a billion people or seven billion people at this point to do the exact same thing, to work against their self-interest and try to do the right thing. Instead, what we need to do is to get to a stage where you can do well by doing good. Maybe that's the bumper sticker right there.

TH: In "But Will the Planet Notice" you condense some heavy economic principles into pretty digestible form. One that you touch on is the ten-foot-woman principle. Can you walk us through what that means for climate data?

Wagner: Essentially what it means is that extreme events dwarf everything. So this is your black swan. This is your surprise around the corner, the events that you never thought possible. A ten-foot-woman is a symbol of something that simply doesn't happen.

The average woman is something like 5'4" in this country. If you see someone who is six feet, that is a rarity already. If you see someone who is seven or eight feet, they are probably in the Guinness Book of World Records. There is simply no woman (or man for that matter) who has ever grown to be ten feet.

In the book I draw the connection between extreme climate events and the financial crisis we have lived through over the last two or three years. We see these ten-foot women all the time. And they drive the result. Every single time we are surprised again: "Oh my God, this couldn't possibly happen." But it does happen.

When you look at stock market movements, for example, it's not the tiny little daily movements that matter. It's these black swan, ten-foot women events that drive everything. Going from financial statistics to climate signs, it's fairly similar here. Average is already bad enough. Average predictions are very bad already. But really what should scare you is the ten-foot woman, the extreme event that either no one has thought of, or putting in their models and saying "the chance of that happening is pretty small, let's not worry about it."

But really it's a one-in-twenty chance of a 10-degree warming this century. That's probably not a risk we should take. Certainly not worth taking when you're talking about the entire planet, when you simply can't have a bailout like for the financial institutions. We don't really know how to bail out the planet if that's what it comes down to.

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