Economists and environmental groups need to become friends fast if climate change is going to be slowed down. They’ve been adversaries for far too long.
Governments have a responsibility to look after the interests of their citizens, and damaging the economy to achieve environmental goals will not serve most members of the public. It is not acceptable for environmentalists to ignore this fact; their high-minded goals cannot be divorced from the realities of community needs. Priuses and roof-mounted solar panels are simply not accessible options for most families with moderate means.
Australia’s last prime minister, Kevin Rudd, resigned after his high popularity was cut short by promising environmental commitments that would have hurt the nation and left it competitively disadvantaged. Canada’s sitting prime minister, Stephen Harper, led a charge to drop out of the Kyoto Accord and cut environmental funding to fend off similar criticisms and economic ramifications.
The biggest challenge for the future of the environment is that in the game theory of international relations, countries have strong incentives to delay environmental action. If all countries made strong environmental commitments tomorrow, the world as a whole would benefit. But every country that defers environmental action benefits from the actions of more proactive countries; if some countries ban coal use, countries that do not ban it will benefit from lower energy costs. So the dominant strategy for all nations is to hang back and wait for others to act first. The only common exception to this rule occurs when meeting environmental commitments creates economically positive or neutral results.