Logan City Energy Policy

Tonight the City Council will consider a net metering program proposed by the Renewable Energy Advisory Board lead by Dr. Robert Davies and others. In simple terms, the program would allow residents to install solar panels on their homes to sell energy back to the city during times of peak energy demand.

The proposal is one of a growing trend in Logan City toward green policies. In the past year we have seen the institution of mandatory recycling, rejection of IPP3, the creation of the Renewable Energy Advisory Board among other measures.

The intent of these policies is to promote a responsible stewardship of the earths resources. The hope is that measures taken locally will resonate and effectuate globally. While idealistic and noble, the reality is starkly different.

There is a phenomenon in political economy known famously as the “tragedy of the commons”. Wikipedia’s article on the tragedy of the commons explains the phenomenon:

From this point, Hardin switches to non-technical or resource management solutions to population and resource problems. As a means of illustrating these, he introduces a hypothetical example of a pasture shared by local herders. The herders are assumed to wish to maximize their yield, and so will increase their herd size whenever possible. The utility of each additional animal has both a positive and negative component:

• Positive : the herder receives all of the proceeds from each additional animal
• Negative : the pasture is slightly degraded by each additional animal

Crucially, the division of these components is unequal: the individual herder gains all of the advantage, but the disadvantage is shared between all herders using the pasture. Consequently, for an individual herder weighing up these utilities, the rational course of action is to add an extra animal. And another, and another. However, since all herders reach the same conclusion, overgrazing and degradation of the pasture is its long-term fate. Nonetheless, the rational response for an individual remains the same at every stage, since the gain is always greater to each herder than the individual share of the distributed cost is. The overgrazing cost here is an example of an externality.

Because this sequence of events follows predictably from the behaviour of the individuals concerned, Hardin describes it as a tragedy: “the remorseless working of things” (in the sense described by the philosopher Alfred Whitehead). As such, it illustrates how “invisible hand” (laissez-faire) approaches to resource problems need not always provide the expected optimal solution. In Hardin’s hypothetical commons, the actions of self-interested individuals do not promote the public good.

Earths climate is perhaps the largest commons in the world. It recognizes no political boundaries or distinction of government. Greenhouse gases from China have the same effect as atomically identical greenhouse gases from Logan, Utah’s Main Street.

In the analogy of the pasture, a farmer could become morally outraged over the degredatioon of the commons. He could decide to set an example by abstaining from the commons altogether and might invite others to do the same. Even if he convinced half of all farmers to abstain, the eventual fate of the commons would be the same- it would only be delayed. And in the interim, those abstaining would bear all the cost of extending the life of the commons but gain no benefit. The tragedy of the commons is not that the farmers are greedy, but that the resource is managed poorly. It lacks clearly defined property rights.

So it is with Logan City and environmental policy. There is an environmental crisis. Global warming is real. The problem is that environmentalists are asked the city to foolishly withdraw from the commons (IPP3 for example) in hopes of setting a local example that will effectuate globally. IPP3 will still be built and still spew greenhouse gases whether or not the City of Logan paricipated. And even if IPP3 is not built, the coal that would have burned in IPP3 will be burned somewhere. Logan City not only fails to create environmental gains for itself, but fails to create environmental gains for anyone anywhere.

The hope that the City of Logan will set a grassroots example is absurd. Aside from the fact that it represents just 40,000 of 300 million Americans and nearly 7 billion on earth, the argument assumes that human nature can be changed by moral pleas and calls. The problem faced in the pasture example was not a result of farmer greed, excess or morality. It is a problem of undefined property rights. The assumption of both the morally outraged abstaining farmer the City’s environmental policies is that the problem is a moral one. It is not a moral one. Global warming is a problem of a mismanaged commons (our atmosphere). Human nature will always behave rationally seeking to maximize individual gains and minimize individual costs. Those seeking to change that nature throughout history whether it be through socialist living experiments or grass roots global warming policies ultimately fail and find themelves spitting into the wind. Rational self interest isn’t a bad thing. It’s a wonderful power that when harnassed correctly yields powerful results.
Logan City’s global warming policies are expensive to its citizens, accrue no benefit to its citizens or anyone on the face of the earth and effectuate no change in how the commons of the atmosphere is managed internationally. In short, they are feel good measures with absolutely no solvency.
Because the commons of the atmosophere is so incredibly large- much larger than Logan City- the only policy solution that will actually work will be one of an international scale. It will require a treaty that nearly every nation signs that manages and defines rights to pollute by nation. Nations could sell those rights to one another in a free market system. The agreement would need to be comprehensive and enforceable. An attempt of such an agreement was made with the Kyoto Protocol, but the U.S. refused to sign the agreement (for good reasons).

I admire those that want to address the problem of global warming. Their hearts are in the right place. This problem, however, can only be solved on an international scale.