ABSTRACT
With the emergence of industrial capitalism, human productive activity has achieved a scale that has important impacts on the world ecological and environmental systems. The management of this impact is one of the fundamental challenges facing us over the coming centuries. Industrial capitalism and the accompanying explosion of the world human population have effects on a host of environmental systems, including fresh water cycles, biodiversity, the ozone layer, and desertification. I will concentrate here on one of the most prominent of these problems, global warming, to look at what political economic analysis has to say about the management of these issues. Scientific concern about global warming arises from the observation that
industrial capitalism has found most of the energy it uses in the burning of fossil fuels, particularly petroleum and coal. When these fuels are burned they release not only the energy stored in them through ancient photosynthesis, but also significant amounts of carbon dioxide andmethane. These gases, when released into the atmosphere, tend to prevent the radiation of energy from the earth to space, and as a result raise the earth’s surface temperature through the “greenhouse effect.” A significant rise in the earth’s temperature can have many complicated effects on climate, including increased severity of storms, higher sea levels which may inundate coastal regions inhabited at present by a large proportionof the earth’s population, andhigher agricultural yields at high latitudes. While scientific controversy over the exact magnitude and timing of these
effects continues to be vigorous, there is persuasive evidence that they are real and potentially of a magnitude to be a legitimate focus of public concern and policy intervention. A survey of the current state of scientific debate on
this problem can be found in Intergovernmental Panel on Climate Change, Working Group II, 2001. Global warming has two fundamental political economic aspects. First,
although all parts of the earth will experience the impact of global warming, different parts of the planet will experience very different costs and benefits from efforts to control greenhouse gas emissions. Second, the geophysical scenario of global warming unfolds over a very long time scale compared to other political economic phenomena. The global warming scenario unfolds on a time scale of two hundred to four hundred years, due to the geophysical time constants (such as the half-life of atmospheric carbon dioxide) involved. This greatly exceeds the longest time scales considered in most economic models, which range from business cycle model horizons of 2-5 years, through investment planning model horizons of 5-25 years, long-run growth model horizons of 10-50 years, to demographic models with horizons of 25-100 years. The basic problems of global warming concern the management of the geographical and generational distribution of costs and benefits of various methods of controlling greenhouse gas emission. Amore comprehensive discussion of these issues can be found in Cline (1997). I will begin by looking at what neoclassical economics has to offer as a
perspective on this problem, and then turn to the potential insights we might gain from a classical political economic approach.
