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Crude Logic
By Robert Wright
Friday, March 30, 2001, at 9:30 a.m. PT
The Bush administration wants to be clear on why it has chosen to antagonize
the entire civilized world by abandoning the Kyoto treaty on climate change.
President Bush doesn't deny that global warming is a problem, and he isn't
averse to addressing the problem. It's just that this particular solution, by
exempting developing nations from cuts in greenhouse-gas emissions, would
make the United States shoulder more than its share of the burden. While such
American selflessness may have seemed fine to the woolly-minded one-worlders
in the Clinton administration, the steely cost-benefit calculators in the
Bush administration won't be so easily bamboozled.
Yet, elsewhere on the energy/environment front, bamboozlement seems to be the
official Bush policy. I refer to the insufficiently scrutinized cost-benefit
logic of drilling for oil in the Arctic National Wildlife Refuge, a project
that actually amounts to a big American giveaway to the rest of the world.
On the benefit side of the equation: One standard estimate is that the
drilling will yield 3.2 billion barrels of oil—a bit less than America
consumes in six months. This number is often cited by critics of the project,
who consider six months' worth of oil meager reward for a lifetime of
environmental damage. But actually, this number vastly exaggerates the
benefits accruing to the United States.
After all, there is one seamless world oil market. The benefit of those 3.2
billion extra barrels will be spread across the whole planet in the form of
slightly lower prices. Since the United States consumes one fourth of the
world's oil, it will get only one fourth of the benefit—in effect, 800
million barrels compared to 2.4 billion for the rest of the world. Yet the
United States is assuming all of the direct environmental costs of the Arctic
drilling. How generous! How woolly minded!
So, all told, Americans are getting six weeks', not six months', worth of oil
for a lifetime of environmental damage. Yes, I know, the Bush administration
quantifies the "environmental damage" side of the equation differently than,
say, the Sierra Club. But just about everyone agrees there will be some
damage to the ecosystem, and the part of the ecosystem in question is on
American soil. So, to phrase the matter in the technical language of game
theory: We're getting screwed by the rest of the world.
By the way, the Bush administration's claim that developing nations are "free
riders" under the Kyoto accord is not beyond dispute . But for present
purposes we can leave this issue aside. Even if we stipulate that Kyoto's
distribution of burdens is unfair, we are still left with this conclusion:
The basic difference between the Kyoto accord and Arctic oil drilling is that
with the former the developing world is a free rider, and with the latter the
whole non-American world is a free rider. In both cases, the United States is
a free ridee.
Puzzling, isn't it? In the Arctic, Bush is magnanimously sacrificing
America's national interest while, on the global warming front, he is
jealously guarding it. I'm having trouble finding the logical consistency
here—unless always doing what American oil companies want qualifies as
logical consistency.
Actually, I have nothing against jealously guarding the national interest. I
consider myself a one-worlder of the non-woolly-minded variety. While I do
believe we're moving toward a system of world governance, I believe we're
doing so because, thanks to the non-zero-sum implications of technological
evolution, rationally pursuing the national interest will increasingly mean
cooperating with other nations. So, I welcome serious questions about whether
the Kyoto accord adequately serves American interests.
But, so far, at least, the Bush administration shows no signs of being
serious. Though it has rejected the Kyoto treaty, it hasn't said what an
acceptable treaty would look like. Is the problem that the administration
hasn't had time to find an acceptable alternative? But Bush has been
complaining about the Kyoto treaty's unfairness for a year and a half now! In
the course of all of his ruminations on the treaty's injustice, didn't
Curious George ever once ask an adviser what a just treaty might look like?
Hey, George, I've got an idea that should meet with your approval. It would
make a dent—albeit a small dent—in the global-warming problem and would
spread the attendant sacrifice well beyond America's borders. Here's how it
goes: Don't drill for oil in the Arctic National Wildlife Refuge. That will
keep oil prices slightly higher worldwide and thus dampen the use of this
greenhouse-gas-emitting fuel—in developed and developing nations alike! What
do you think?
