The Concentration of World Output
One of the reasons Levitt & Dubner give for thinking that avoiding catastrophic global climate change via binding emissions reductions isn’t workable is “the fact that greenhouse gases do not adhere to national boundaries.” In other words, the fact that there’s a difficult coordination problem. And it’s true, there is a tricky coordination problem. That said, one shouldn’t actually overstate the degree of difficult coordination involved. The fact of the matter is that global economic output is pretty highly concentrated. Look up the IMF’s figures for 2008 GDP and you’ll see that the United States and the EU together account for a majority of the world economy:
The dropoff after the big four is pretty enormous with Russia, Canada, and Brazil clocking in at around a third the size of the Chinese economy. Realistically from a legitimacy point of view you’re not going to see those four large economies get together on an agreement and then coerce everyone else into following suit. But coordinated and determined coercion by those four—or even by the US and EU alone—could probably be made to work. More realistically you can go from a Big Four to a Big Eight that includes Russia, Brazil, India, and Indonesia and you’re looking at about all the coordination that’s needed. A Canada or South Korea or Mexico or Cambodia isn’t in a position to play spoiler and just refuse to play by whatever general set of rules fit high-, medium-, and low-income countries.
Back to Levitt & Dubner, for some reason they write during the course of this discussion that “the United States has in recent years sporadically attempted to lower its emissions,” which is false, and then implies that the issue is that China and India won’t go along. It’s true that we could wind up in a situation where Sino-Indian recalcitrance is the key obstacle to progress, but in reality the United States of America, historically speaking by far the largest contributor to the problem, has made no attempt to lower its emissions. Nor has the USA made any effort to play a constructive role in solving the global coordination problem. Fortunately, thanks to the Waxman-Markey bill that’s passed the House, the Kerry-Boxer bill pending in the Senate, and the looming negotiations in Copenhagen that stuff might change. But it won’t if people listen to Levitt & Dubner and give up in advance, concluding that past efforts have failed when in fact no efforts have been made.
39 Responses to “The Concentration of World Output”
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October 18th, 2009 at 1:21 pm
This might be more relevant:
http://en.wikipedia.org/wiki/List_of_countries_by_carbon_dioxide_emissions
October 18th, 2009 at 1:27 pm
Any climate change reform is a futile effort. If China and India are not involved, every country could cut its emmissions by 100% and we would still face an issue. The goal of the world should be to get China and India to the table and make them realize that if they don’t change they are going to collapse themselves and the world around them.
October 18th, 2009 at 1:30 pm
This chart is not very useful, because the EU is a 70% service economy and the US is almost 80% service economy. You need to look at the industrial (and maybe agricultural) output separately.
October 18th, 2009 at 1:35 pm
One thing I would note is that some stuff like solar power and electric cars might well end up being replicated in other countries for purely economic reasons. Likewise if a company figures out how to use a little less electricity in the US or Europe it may decide to replicate those policies everywhere.
October 18th, 2009 at 1:40 pm
Yep: the EU, US, and Japan, plus a grabbag of like-minded smaller countries, would easily have the economic weight to coerce the rest of the world into a negotiated agreement on pricing greenhouse gas emissions.
So, surprise-surprise, the fundamental holdup is in fact the US.
October 18th, 2009 at 1:45 pm
abb1: Matt specifically used the word coercion, though. The world’s largest economies aren’t just relevant to global warming because of their industrial production, but because of their buying power, which can be used as a rather big stick to get the other countries to play nice. The particulars of implementing a carbon tariff could get messy, but that’s an option. (And even if that doesn’t happen, US + EU still has about a third of the world’s carbon emissions according to the Wikipedia chart Ben links.)
October 18th, 2009 at 2:03 pm
6, fair enough, although the chart is still misleading.
October 18th, 2009 at 2:22 pm
That is one simple pie chart. Beautiful.
October 18th, 2009 at 2:25 pm
Thomas Farrell: my understanding is the old China bogie is history, that they are bought into the problem, are committed to a green revolution and are aiming to lead it.
Yup, another takedown for Levitt & Dubner tramping around with their hobnail boots in another area they don’t know.
Stern reports that the Japanese are offering to cut their emissions by 25% relative to 1990 levels: see The world’s future is being decided this weekend. We know Koyoto worked quite well even without some of the big players.
I have posted an article looking at the ethics of this here.
October 18th, 2009 at 2:44 pm
Shorter Matt:
Well yes Majic Ponies are hard to breed but the Chinese will build cute stables if we insist.
And if economic coercion (is this Obama telling the Chinese that they can’t prop up the dollar anymore and the EU that they must take up the slack?) won’t work then hell we can always just bomb the suckers, right Matt?
This post is nonsense posing as political theory which is completely divorced from reality.
October 18th, 2009 at 2:48 pm
@9 Chris Dornan: “my understanding is the old China bogie is history, that they are bought into the problem, are committed to a green revolution and are aiming to lead it.”
This is correct. We want China to be the bad guy but China is NOT cooperating. China has in fact turned the tables on us. Not that is was hard to do. The United States is and always was the number one bad guy.
October 18th, 2009 at 2:51 pm
“Realistically from a legitimacy point of view you’re not going to see those four large economies get together on an agreement and then coerce everyone else into following suit. But coordinated and determined coercion by those four—or even by the US and EU alone—could probably be made to work.”
Shorter Matt Yglesias: You’re either with us or against us
The rationale for coercion may differ, but make no mistake – the climate change doomsayers want an even more coercive international order than either Bush or Wilson ever dreamed of.
Pray tell, what form of coercion do you propose here? let’s say that neither sanctions nor tariffs work (and, according to people like Matt, they won’t work to curb military buildups, so why would they work for this) – what next? According to you, this is an existential crisis.
October 18th, 2009 at 2:54 pm
[...] observer, there is a real prospect to make meaningful progress. (Update: Yglesias has a good post explaining why Levitt and Dubner are making careless [...]
October 18th, 2009 at 2:57 pm
TF, while getting China and India on board is certainly important, it shouldn’t dictate our action. Climate change is a matter of degree, not a binary question.
You said:
If China and India are not involved, every country could cut its emmissions by 100% and we would still face an issue.
Yes, but not the same issue. Climate change is already happening, the question is how high the new concentration of greenhouse will eventually climb. If we unilaterally reduce our output it decreases the rate of increase, likely reduces the new equilibrium, and empowers the environmental movement inside India and China.
October 18th, 2009 at 3:10 pm
#11 – whether China is “leading” or “trailing” depends on how panicked you are. They are closing down less efficient (and more polluting) coal plants, but they are also building lots of cleaner coal plants (which, nevertheless, emit Co2). If you mostly care about noxious gases, that’s good. If you’re like Matt, and convinced that the sky is falling, that’s bad.
See this
October 18th, 2009 at 3:39 pm
[...] Matthew Yglesias, Mark Liberman, Mark Thoma. My elaboration of the last two is in my more scient-y site. It has some thoughts spurred by Liberman and Thoma’s posts. [...]
October 18th, 2009 at 4:03 pm
let’s say that neither sanctions nor tariffs work . . .
Let’s not. Rather, let’s say you’ll keep making up far-fetched ignorance-based hypothetical scenarios to defend your cultural-tribalism. That is a much higher-percentage bet.
October 18th, 2009 at 4:06 pm
There’s DTM, with more proof by assertion. It’s perfectly reasonable to ask what Matt means by coercion here. Tariffs and sanctions have an extremely poor track record of working, without regard to what the policy goal they are being used for.
Given that, what’s your next step, since – in your mind, and Matt’s, this is an existential crisis? Just what steps do you have in mind for the American public? And why are you afraid to air it out?
October 18th, 2009 at 4:11 pm
@15 James Robertson: “whether China is “leading” or “trailing” depends on how panicked you are”
I’m not panicked at all James. I only point out from time to time that China is spending hundreds of billions of dollars on green technologies this year alone; and will spend trillions in the coming decade. The United States, on the other hand, is spending NEXT TO NOTHING.
I’m not saying China is Mr. Clean. I’m just saying that the United States loses, and loses badly, any argument with China involving the words “green” or “climate change” or “investment in their Nation’s future.”
October 18th, 2009 at 4:19 pm
Tariffs and sanctions have an extremely poor track record of working . . . .
There is James, with more proof by apples-and-oranges arguments.
Given that . . .
I don’t believe it is a “given that” major developing countries like China would start self-destructive trade wars rather than negotiate a deal over greenhouse gas emissions,. If you consider citing their political elites’ lack of suicidal tendencies (see below) “argument by assertion”, so be it.
. . . what’s your next step?
To be frank, if for some insane reason a country like China decided to cut itself off from world trade rather than negotiate a deal over greenhouse emissions, the problem will probably take care of itself: their economy would likely stop growing and may well contract.
Of course then their government would likely fall, and likely in a violent fashion, which could be unfortunate for many people. That is part of why the developed world will also be willing to negotiate a deal which would allow developing countries to sustain reasonable growth rates.
And that is the real issue: the exact terms of that deal, which is what all the posturing today is really about. But a deal is indeed going to happen.
October 18th, 2009 at 4:24 pm
There’s DTM, with more proof by assertion.
There’s J-Rob, with more proof by la-la-la-I-can’t-hear-you.
October 18th, 2009 at 4:43 pm
DTM, trade wars have started over a whole lot less – witness the sad tale of the 1930’s. Right now, China is investing a ton of money in cleaner burning coal plants. Those plants still emit Co2.
Under what circumstances do you believe that they’ll stop building them, or invest in some absurdly expensive carbon capture scheme? What would possess them to do that, and – given the plummeting value of the US dollar, what leverage would we have, anyway?
China isn’t going to stop building power plants, and neither is India – to do so would be to guarantee the long term impoverishment of their own citizens, something that simply is not in their interest. The US and EU are not going to be growing rapidly, so our share of emissions (as a percentage of the whole) will be dropping relative to that part of the world.
So I’ll ask again: what sort of coercion do you have in mind? Why do you think it would work? Why do you think anyone will listen?
As to “To be frank, if for some insane reason a country like China decided to cut itself off from world trade rather than negotiate a deal over greenhouse emissions, the problem will probably take care of itself: their economy would likely stop growing and may well contract.”
Right, because sanction regimes always work so well. Based on actual history, I can guarantee you that no one is going to cut off trade with China – least of all the US. Who the heck would we sell our bonds to?
October 18th, 2009 at 4:51 pm
@21 pseudonymous in nc: “There’s J-Rob, with more proof by la-la-la-I-can’t-hear-you.”
Too funny. I gotta give James some credit, though. He’s never shy about instigating and/or leaping into a brawl.
October 18th, 2009 at 4:55 pm
Or, to be more clear about it:
We didn’t interrupt trade relations with China over:
– Tibet
– Tienanmen Square
– Any of the human rights violations since 1991
And yet, DTM, and others here, think that suddenly, the entire West will decide to stand firm on “reduce carbon emissions or else”.
Pardon me while I laugh a lot. Europe won’t stop trade relations with the prison state of North Korea, a country with virtually no resources. And you think they’ll stand firmly against China, India, or any other nation that decides to give carbon emissions panic a miss. Sure. Right.
October 18th, 2009 at 5:06 pm
Shorter J-Rob: “assume everyone’s as selfish as me; rinse, repeat.”
Funnily enough, his children never got past crawling; any attempts by them to walk were cut off straight away, because such aspirations are unhealthy — and besides, one can just get pushed around in a cart.
October 18th, 2009 at 5:19 pm
Posts like this and the responses above lead me to believe that many if not most liberals are high on crack. China is leading the green movement? WTF? You’re kidding, right? They just passed the US as the world’s largest carbon emitter and are growing at 15% a year while the US grows at 1% a year. We’re not doing anything? Most of the green technology has come out of the US.
This is BS and I’m sick of it. Right wing Republicans are idiots but they do have one thing right. Liberals tend to blame America for every problem, real or imagined, deserved or undeserved. If you hate the US so goddam much then move.
October 18th, 2009 at 5:21 pm
James Robertson: Nobody’s suggesting that the West hold firm on “reduce carbon emissions or else.” The idea of carbon tariffs tend to be merely to tax imports at a rate comparable to how much the required amount of carbon credits would cost if it had been manufactured domestically. This would not be a very high tariff. With such a policy, the goal wouldn’t be to coerce the government, but to apply the same pressure to Chinese companies that is applied to domestic companies. In principle, perhaps an additional tax could be added onto that for putative purposes, although I’ve never heard that talked about by anyone, and even then the tax would not be especially high.
As of right now, tariffs already exist on some Chinese goods, such as the recent controversy over Chinese tires. A carbon tariff would certainly piss off China and I’m not entirely sure it’s a good idea, but it’s very different from just sanctioning off the country until they do as we want, which I agree would be unprecedented.
October 18th, 2009 at 5:24 pm
@24 James Robertson: “And yet, DTM, and others here, think that suddenly, the entire West will decide to stand firm on “reduce carbon emissions or else”.”
Umm….I don’t know about “others” but the point of Matt’s post is that the West, especially the United States, is not likely to stand firm on climate related issues.
And my point is, the nation most likely to firm stand on creating international limits on emissions -in fact they have already taken the lead on this issue- is China.
October 18th, 2009 at 5:27 pm
Yeah, let’s lean on China. Something to do until the next Treasury auction.
October 18th, 2009 at 5:33 pm
DTM, trade wars have started over a whole lot less – witness the sad tale of the 1930’s.
That is really quite a daft statement in so many ways. I assume James is referring to Smoot-Hawley, which was a desperate attempt to deal with the Great Depression, not just to avoid negotiating a greenhouse gas deal. And in any event, I think pretty much everyone has learned their lesson when it comes to Smoot-Hawley, meaning it is highly unlikely a country like China would repeat that mistake.
Under what circumstances do you believe that they’ll stop building them, or invest in some absurdly expensive carbon capture scheme? What would possess them to do that, and – given the plummeting value of the US dollar, what leverage would we have, anyway?
First, “we” in this scenario is a largely unified developed world and additional developing world partners, not just the United States. Second, the deal will take the form of a more gradual phase-in for developing countries plus subsidized access to green technology. They will take that deal because it will prove a lot less costly than isolating themselves from world trade.
Who the heck would we sell our bonds to?
It probably won’t come to that, but if it did we could easily increase taxes a bit to deal with the loss of the Chinese market for our government bonds. Of course that is part of what is really behind the tribalist recitations James is offering, namely the implicit danger that artificially low taxes for the wealthiest Americans financed by Chinese savings might be somewhat moderated.
And yet, DTM, and others here, think that suddenly, the entire West will decide to stand firm on “reduce carbon emissions or else”.
Sure, and not to be overly cynical about it, but that is because now you are talking about money, not just human rights violations. In other words, the developed world won’t let countries like China simply free ride on their emissions efforts because that is a financial issue, not just a humanitarian one.
October 18th, 2009 at 5:35 pm
“Any climate change reform is a futile effort. If China and India are not involved,”
I agree it would be like, any police effort to combat murder would be futile if we don’t get the Ghetos involved; so we should just keep allowing people to kill each other.
I really wish people like you would look at the complete ridiculousness of your moronic logic.
China whose emissions per capital are 5.6 times less then America’s whose investing more into green energy then America, and who looks to be doing more to reduce emissions then America, clearly is the reason that American climate change reform is futile.
Go get a clue; you’re in need of one badly.
October 18th, 2009 at 6:01 pm
The problem with China and India isn’t that they aren’t willing to negotiate (they are probably more willing than the US) the problem is that even if they forever remain cleaner than the US, they have a lot of people entering the middle class and Western-style consumption patterns. It’s hard to see how the US can demand stricter per-capita restrictions on China than it is willing to hold itself, but we’re in pretty big trouble if the rest of the world adopts American consumption habits, even if we can reduce its damage by 30% or 50% per capita.
October 18th, 2009 at 6:17 pm
The bottom line on this is like this: China and India will, while laughing up their sleeves, say “You first with the hairshirt. Trust us, we’ll be right behind you…”
October 18th, 2009 at 7:25 pm
The bottom line on this is like this: China and India will, pointing to J-Rob, say “when you have selfish blinker-wearing fuckers like that one, what hope do you have of getting a domestic political consensus?”
Still, you can understand J-Rob’s tribal, moral denialism. The only way he escapes having his grandchildren curse his grave is for the scientific consensus to be proved wrong, because sitting on one’s hands because you presume everyone else to be as narrow-minded and selfish is sheer nihilism.
October 18th, 2009 at 7:52 pm
#34 – China is still building a ton of coal plants. What they are doing is building a next generation of cleaner plants than what we have.
Why aren’t we doing that, you ask? Go check with all your enviro pals over there on the left, who have been busy blocking any coal fired plants from being built. Net effect of that: Older, more polluting plants stay in service longer.
As usual, progressives are doing their best to throw sand in the gears…
October 18th, 2009 at 8:05 pm
And now you’re just a stuck record.
1. Blame hippies
2. Sit on hands
3. Blame hippies.
What a fucking waste of breath you are.
October 18th, 2009 at 8:17 pm
Let me add one thing: I can understand the mentality of people who, on extrapolating their own selfishness, decide that nothing can be done, and the best way to live with that is to la-la-la-can’t-hear-you, blame straw-hippies, and hope that the long-term threat from climate change goes away by magic.
But for those people to hold those opinions and have children strikes me as monstrous. Bequeathing the consequences of your selfishness on distant others is one thing; it’s another to play a role in creating and raising the people who’ll have to deal with it.
October 18th, 2009 at 8:19 pm
@35 James Robertson: “As usual, progressives are doing their best to throw sand in the gears…”
It seems clear to me James that progressives haven’t been able to slow down the gears since the dawning of the industrial revolution. Not enough to save the human species, at any rate. Your side is still most definitely on pace…
As for China, their government will spend -directly- hundreds of billions and subsidize their top businesses -with cash- to the tune of hundreds of billions more to develop green technologies like wind power and electric automobiles. We are not allowed to do that in America. We are one world government Free Market types. We will die for a theory before we will allow for national advancement.
And don’t worry about coal plants. We are building coal plants. It’s actually about the only thing we are doing. 20 big ones are going up in the next half-decade. Everything is ok.
October 18th, 2009 at 11:31 pm
On net, the USA will be paying into the system, Africa might be a big beneficiary. China is probably in the middle.