What is a ‘Rational’ Climate Policy?

by | Mar 21, 2018

Taking taxpayers’ money and allocating it to fighting climate change, the causes of which are complex, is not rational but irrational climate policy.

I recently attended a talk about rational climate policy in Calgary, the headquarter city of the Canadian oil industry. The presenters where  economics professor Trevor Tombe and former pipeline executive Dennis McConaghy who argued that the Canadian federal government should pursue a ‘rational’ climate policy instead the current investment-killing, production-throttling and wealth-destroying approach. (For evidence of such impacts, just check the amount oil and gas investment fleeing from Canada and the about 100,000 oil industry employees who have lost their jobs).

Recognizing the reality of mixed economy in which the Canadian government has policies for nearly all aspects of our lives (not only for fighting climate change but for nudging us toward ‘proper,’ government-sanctioned nutrition), I was eager to hear any ideas for a more rational approach. (Changing the mixed economy into a free society would be the ideal goal but not realistic in today’s culture).

Tombe and McConaghy based their exploration of rational climate policy, reasonably, on the mixed economy premise. But disappointingly, they were unwilling to challenge it in any way. They took it for granted that the Canadian government should have such policy—which consists primarily of progressively increasing carbon taxes, but also CO2 emission caps in some provinces, subsidies for renewable energy, and banning new pipeline construction. The speakers’ only quarrel was with the level of carbon taxes and whether such taxation should be revenue-neutral and conditional on getting new pipelines approved and constructed.

Although Tombe and McConaghy never defined “rational,” they implied that a rational climate policy would consist of a carbon taxes at a level similar to California (the highest taxed U.S. jurisdiction) and that would also be conditional of new pipeline approval and construction as well as revenue-neutral. Presumably, such carbon taxation would constitute “rational” climate policy because it might reduce somewhat the uncompetitive costs of Canadian oil producers and pipelines and stem the fleeing of investment from them. Currently, most provinces in Canada have carbon taxes 57-84% higher than California, while only Saskatchewan has refused to impose it all.

What’s more, Professor Tombe kept referring to carbon dioxide “pollution” and the environmental damage from it, capitulating to environmentalists’ claims and taking the climate models’ predictions at face value and thus adopting a “the science is settled,” unquestioning stance to the legitimacy of a government climate policy.

When I pointed out during the question period that CO2 is not a pollutant but beneficial nutrient for plant growth and asked how economists calculate the cost of environmental “damage” from it, he revealed that they use the existing climate models as the starting point for their calculations. He also admitted that the climate models vary widely in their predictions of carbon levels, which brought home the point that the economists’ recommendations for carbon taxation levels are only as good as the widely variable—and proven to be unreliable—climate models.

So what would be a rational climate policy in a mixed economy? ‘Rational’ means ‘adhering to facts.’ One of the first facts to which governments—as well as climate modelers, economists, and business executives—should adhere to is the unreliability of the current climate models that have not been able to predict atmospheric carbon levels or global temperatures, let alone to prove catastrophic impact of human activity on them. The second fact governments and others should heed is that CO2 is not a pollutant but necessary for life on the planet and that the current CO2 levels are historically relatively low. This means that costly measures to try to cut them drastically will likely harm human wellbeing, particularly in the face of evidence of disappeared sun spots and the recent global cooling that climate scientists attribute to them.

Another fact to which rationality would require us to adhere is that there is an opportunity cost to governments spending taxpayers’ money on fighting climate change through carbon taxes and emission caps. Such climate policy measures increase the cost of the reliable and plentiful energy from fossil fuels and therefore hurt production of goods and services (and increase their prices) on which our survival wellbeing depends and limit people’s freedom to choose how to live their lives.

Taking taxpayers’ money and allocating it to fighting climate change, the causes of which are complex, is not rational but irrational climate policy. It will tilt the mixed economy toward more and more government control.

To live flourishing lives, we need to move toward the opposite direction: increased individual freedom, protected by government through rational laws, such as those protecting private property (including air and water) against real toxic pollution instead of against benign CO2.

Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada. How to Be Profitable and Moral” is her first solo-authored book. Visit her website at profitableandmoral.com.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.


  1. The fundamental question regarding climate cycles is the causal agent. Is, for example, CO2 a/the causal agent? Or is it an effect? Or is it a combnation of things?

    To answer that question, consider the following:

    **2.7 Million Years Ago Icy Greenland was Pretty Green, Study Finds
    “‘More than 2.5 million years ago Greenland looked like the green Alaskan tundra, before it was covered by the second largest body of ice on Earth,’ the Lawrence Livermore National Laboratory said in a statement Thursday.”

    Observe, too, the levels of CO2 over time: For instance, 400-milliom years ago, with the Earth coming off a minor ice age (the Andean-Saharan, 460 to 430 million years ago). Temps during that period 400mya were on the cool side. Here’s a link to a chart giving you the overall view of long & short-term average temps over 500+ million years.

    400 million years ago: CO2 levels were @2,000 ppm
    2017: CO2 levels were @400 ppm (meaning 99.96% of the atmosphere consists of gases *_other than CO2*_)


    Consider, too, this from Dr. Judith Curry, world renowned and academically honored climatologist and former chair of the Earth and Atmospheric Sciences at the Georgia Institute of Technology

    “On balance, I don’t see any particular dangers from greenhouse warming. {Humans do} influence climate to some extent, what we do with land-use changes and what we put into the atmosphere. But I don’t think it’s a large enough impact to dominate over natural climate variability.”

    NOTE: ****Dr. Curry noted the ineffectual provisions of the Paris Climate Agreement where even if all countries meet their proclaimed emission reductions targets the result is only about a 0.2 Degrees C global temperature lowering by year 2100. She further noted that since the climate models run “hot” the actual likely global temperature reduction would be much less.****

    Here’s a youtube link to the interview with Dr. Curry: https://www.youtube.com/watch?v=7zk7Xfyv6k4&feature=youtu.be

  2. “current CO2 levels are historically relatively low”

    If you’re referring to human history, this is totally false. Current carbon dioxide levels are higher than not only any time in the history of human civilization but any time since homo sapiens existed. You have to go back around 25 million years – we’re talking almost halfway back to the time of the dinosaurs – to find a time when levels were higher. And at the time sea levels were on the order of 100 meters higher with almost no ice anywhere on Earth. That’s the future we’re looking at if we do nothing.

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