Wednesday, January 6, 2016

A Rational Agent Explanation For Opposition To Climate Change Mitigation

Its not easy to pass legislation which will put a price on carbon emissions.  One source of opposition is the energy industry which is directly effected.  They have lobbied governments, and they have sponsored climate change denial "studies" which have misled the public.  This article offers another explanation for resistance to carbon pricing.  It assumes that each voter is a rational agent who calculates the costs of carbon pricing versus benefits which might never be received.  A simple economic analysis tells them to vote against carbon pricing.  Therefore, we should not blame the energy industry and its allies for resistance to carbon pricing.  "Economic Man" has made a rational decision and voted accordingly.  Consequently, according to a simple economic analysis, an optimum allocation of resources will occur.  Everyone will be better off if we give free reign to individuals so that they can maximize their self interest. 

There are many problems with this article.  The first problem is that businesses which oppose carbon pricing do much of the analysis for the rational agents assumed in this article.  They have misled the public by warning them of the costs and minimizing the benefits.  They will not allow Economic Man to make rational decisions without a lot of help from their propaganda.  Independent rational agents are a fiction.  Furthermore, we expect governments to use expert advice to make decisions which are in the best interest of society.  For example, the FDA does not permit the sale of a prescription drug without testing the effectiveness and safety of the drug.  Rational agents (consumers) spend billions on non-prescription drugs which do not require FDA approval.  Many of those drugs do not even contain the ingredients listed on the labels, and few of them provide the advertised benefits.

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