Climate Repair ‘Five Times Faster’?

I have written before about bad subsidies and incentives that have gotten us into the Climate Crisis. But there is another way to view the problem.

“Nobody thinks we made the transition from horses to cars by taxing horseshit. Nobody thinks that we created the internet by taxing letter writing. Why would it be any different for the transition to the clean economy?”

This point was made by Simon Sharpe talking about his book Five Times Faster in a New Scientist interview. His plan to solve the Climate Crisis five times faster than the current path.

Sharpe worked on everything from human rights policy to counterterrorism for the U.K. Foreign Office. He realized catastrophic climate change was a likely scenario, and needed to be communicated as such.

In short, he says that governments need to actively invest in the technology of the future to make that new technology competitive. It may involve direct funding of research and development as well as subsidies.

Once that technology is competitive, government can force private industry to invest in future development. This has been done with forcing car makers to improve their fleet fuel economy and it can be done to force them to reduce fleet carbon emissions.

He explains the theoretical economic reasoning. Starting with the flawed reasoning most economists operate under: The equilibrium mathematics of supply and demand. This math doesn’t come out of any actual science. On the contrary, it was invented in the 1870s to look like the real science of equilibrium thermodynamics.

Under this flawed reasoning, markets magically balance supply and demand through market pricing. This works well until it doesn’t. Think about the Dust Bowl and the Great Depression. It took government intervention to dig out of those crises and it took continued regulation and subsidies to avoid a repeat.

But Sharpe goes further and claims that equilibrium is rare and deviations are normal. Equilibrium implies all is well and no intervention is needed. But real economies are dynamic. This is not a bug, but a feature that offers great opportunity.

Two years ago I wrote about the Climate Crisis as a “Market Failure.” I suggested that if something is not sustainable, it means someone is not paying the true cost of their behavior. In the case of the Climate Crisis, this means we need a carbon tax. This will restore the equilibrium that was distorted by subsidies for driving and for other carbon emissions.

But Sharpe says direct investment in what we do want is far more efficient and solves the problem faster. He calls this complexity economics or evolutionary economics.

He is critical of past Climate Crisis diplomacy as a negative sum game. Saudi Arabia does not want to see cars convert to electricity. But the U.S., China, and the European Union make up most of the emissions and the car market. If they convert, then that changes the car market and the world will follow. It is a net environmental, social, and economic benefit in the long run. And governments can operate in the long run, where private interests do not.

He criticizes the emphasis on individual action. “Think more about your point of leverage.” How you vote is most important for most people. But some people have more leverage. If you are in academia, what you research and teach is more important than whether you insulate your building. “If you’re an advertising company, withholding your business from media that publish climate misinformation is more important than choosing the vegan option when you take your clients out for lunch.”

There is one caveat I would add: Sharpe is talking about picking winners. Which means we need to pick the right winners. I would argue that the emphasis on converting cars from fossil fuel to electricity misses much of the environmental and social impact of cars and misses out on a great opportunity.

If we are going to pick winners, we should think about investing in better public transit and high-speed rail. But first we have to acknowledge his central point: Economies are dynamic. We are always picking winners as a society and as individuals. Let’s pick the right winners.