Redistributing Wealth Through Greenhouse Gas Abatement Efforts

In his invaluable blog, Larry Solum makes the following criticism of a paper recently posted with SSRN by me and Cass Sunstein.  His focus is our claim that unilateral or multilateral greenhouse gas abatement is not a sensible way of redistributing wealth from rich nations to poor nations.  He begins by quoting us:

It is possible that the more direct methods [of redistributing wealth from rich countries to poor countries] are inferior, for example because it is not feasible to provide that direct aid; but this argument has not been made out.

Then he makes the following argument:

It seems to me that the "feasibility" issue is, in some sense, the core of the dispute.  The salience of distributive justice to the distribution of the costs of ameliorating climate change arises because direct aid to the poor is perceived as outside the feasible choice set, whereas concentrating the burden of greenhouse gas reduction on wealthier nations is sometimes perceived as inside the feasible choice set.  Sunstein and Posner are surely right when they suggest that we really need evidence on this question, but I don't really see why their burden-shifting move is adequate.  It is their argument: shouldn't they at least attempt to provide evidence that their proffered alternative (direct aid to the poor) is inside the feasible choice set?

I think the answer is no.  Suppose, first, that that direct aid is within the feasible choice set.  (It probably is: the United States and other wealthy states already give direct aid to poor countries.  As has been frequently pointed out, the amount of aid is not great, and much but not all of it is tied to strategic interests.  Nonetheless, at least some of it appears to be purely altruistic.)  Let's call the amount of aid that is purely altruistic, and not tied to anything else, X.  If (say) the United States already gives X to poor states, and then finds itself providing additional implicit aid, Y, in the form of greenhouse gas abatement efforts, should we expect X to remain the same or go down?  If the United States has a budget, then either X will go down, offsetting Y, or there will be less spending on Americans--more likely the former.  Unless Americans either spontaneously become more generous or stop paying attention to the budget, direct aid will go down even though it is (as we explain in the paper) superior to indirect aid.

Second, consider the possibility that the United States does not give any "real" aid to other countries: it is all tied to strategic interests.  That is, direct aid is outside the feasible choice set.  If this is the case, then there is no reason to believe that such a selfish country would start giving aid in the form of disproportionate climate treaty obligations.  Why would climate change treaty negotiations convert the U.S. from a selfish state into a generous state? It is hard to see why Americans would become more altruistic than they have been in the past, in the course of determining greenhouse gas policy.  So if direct aid is outside the feasible choice state, indirect aid is as well.

The bottom line is that we assume merely that states treat different types of aid flows consistently, that is, they treat direct and indirect aid the same.  This seems like a plausible enough assumption to throw the burden of proof on those who think that, in this context, governments would systematically misunderstand the costs of their activities.

Comments

[Manuel]

2 points:

1) I haven't had the time to read the entire debate posted here on this topic, but it seems to me that Mr. Posner is working from an unsupported assumption: that massive altruistic aid from wealthy nations can make a substantial and lasting difference in the level of poverty in Third World countries. I cannot think of a single Third World nation that raised its status from an undeveloped country into the ranks of wealthy nations through receiving international aid.

2) The very question posed in this post confirms one of the suspicions of many who oppose government-imposed greenhouse gas restrictions -- that such restrictions are veiled attempts to redistribute wealth from industrialized nations to the Third World. No wonder there is so much overlap between socialists and carbon restrictionists.