Politicians Talk; Entrepreneurs and Scientists Do

About a decade ago, during a short period when geoengineering was hip and trendy, I remember a proponent of this unorthodox climate change policy saying that we wouldn’t have a choice. One way or another, we would have to geoengineer Earth’s climate to mitigate disasters. Most of the climate impact from past emissions is already “baked in” to the system, not something that current or future changes to our behaviors (heating, driving, flying, or consuming) can affect. 

As if that wasn’t enough, the interviewee said something like “well, some rich dude can just single-handedly do it.”

That speaks to the economics of common pool resources and how to address climate change. That conversation is usually dominated by how much government ought to wield what sort of tax or regulation to align private costs and public benefits — and how to get the 195 signatories to the Paris Agreement to coordinate policies and fairly distribute the pain, while still getting enough done (especially at this time of year, when tens of thousands of climate-conscious busybodies fly to Dubai for the two-week political slugfest that is the United Nations COP28 climate change conference). 

CO2, including that which was needlessly emitted in setting up this conference, spreads globally across the atmosphere and has the audacity to not respect borders. Since we emit this greenhouse gas as a byproduct of valuable economic activities (as winter approaches in the northern hemisphere for regular people, this means, by and large, not freezing to death), any reduction benefits everyone but punishes only the reducer. So the private incentive to reduce falls way short of the sum benefit to everyone else; this is standard tragedy-of-the-commons economics — hence governments and taxes and regulations, because nobody else could feasibly transition us to a lower-emitting CO2 regime. There won’t be functional markets in these areas precisely because the producer can’t ensure that she reaps the benefits.

Or perhaps not. 

What has long troubled climate policy deliberations also contains within itself its own public-choice solution. The policy problem at the core of most climate negotiations is that nobody owns the global atmosphere, and nobody can sufficiently police the commons that is the world’s atmosphere. But that’s also what gives non-policy type climate efforts a chance: Someone rich and “philanthropic” enough can just do it. No political legislation needed, no worldwide UN negotiations, no broad-scale (dis)information campaign required.

The issue was well illustrated earlier this year when the offsetting company Make Sunsets launched high-altitude balloons that release sulfur dioxide — one of the most common gasses emitted in volcano eruptions. They sell “cooling credits” to the public, the proceeds from which “will be used to release at least 1 gram of our ‘clouds’ into the stratosphere on your behalf, offsetting the warming effect of 1 ton of carbon dioxide for 1 year.” 

No political negotiations, no 195-country treaties, no taxation, nor regulatory pressure. Barring outlawing the practice, which Mexico unfathomably did earlier this year, there are precious few frictions to actually doing something that positively affects the climate. (The company proudly states that it has launched an anticlimactic 33 balloons! Alas.)

Much like geoengineers of the past decade hypothesized, the “rich-dude” argument is now back in full swing. Here is Spencer Bokat-Lindell for The New York Times in January this year, when Make Sunsets made waves among the chattering classes: 

Global warming may reach a point where the world becomes desperate enough to try blocking the sun with sulfur — and given how cheap it would be, relatively speaking, a rogue country (or billionaire) just might do so unilaterally, with or without knowledge of the potential consequences.

A dedicated enough billionaire or two could just decide to release enough chemicals in the upper atmosphere to block some portion of the sun’s incoming rays, mimicking a volcano eruption, drastically bringing down Earth’s temperature.  

Or, as described in the October National Geographic cover story from Little Peconic Bay on Long Island, someone could release a “finely ground olivine, a type of magnesium iron silicate,” that when added to seawater “absorbs CO2 in a natural chemical process yielding bicarbonates that sequester carbon.”

Or the Climeworks direct-air capture facilities around the world that, with various partners, could mineralize the captured carbon and store it in the Earth’s bedrock. Another flavor of that approach is underway in Rotterdam, where Europe’s largest carbon capture site is set to capture and transport the carbon to, ironically enough, “empty gas fields under the North Sea around 20 kilometers (12.5 miles) off the Dutch coast.”

Here is Jon Gertner, (whose book on the Greenland Ice Sheet is well worth a read) for the Yale Environment’s 360 site: 

Climeworks now has dozens of customers — individual consumers who have purchased carbon removal services directly from the company, as well as corporations, like the insurance giant Swiss Re — who will pay for the permanent carbon offsets that will be buried underneath Icelandic soil.

Offering permanent carbon storage to large, diversified insurance firms does suggest a viable business model. Global insurers are the first line of economic defense against disasters and changing weather patterns, and so have a financial incentive to mitigate these things. 

Rationally speaking, nobody ought to willingly carry the full cost of something where 99 percent or more of the benefits accrue to someone else. This was always the core of the economics-of-climate-change crux. But, the worse the inability to get universal political agreement becomes, and the better and more cost-efficient the small-scale, positive-externality, science-based attempts at just doing the work become, the more we should look at the latter and ignore the former. 

The hopeless prospect that is the UN Climate Conference is the same reason techniques like mineralization or stratospheric aerosol injections might work: The costs are internalized, they don’t harm anyone and therefore don’t directly involve another’s agreement, and if you value the outcome highly enough — say, like Bill Gates claims to do — not recouping costs isn’t that big a deal. 

All these ambitious and dewy-eyed scientists can peacefully pursue their climate-change dreams instead of fruitlessly arguing with politicians and bureaucrats over how to best whack our respective populations on their heads to get them to align, marginally, with their green values. 

They leave the door wide open for well-funded projects to splurge, for rich entities primarily interested in “making a difference” to get to work. Added benefit: They leave the rest of us alone.

Joakim Book

Joakim Book

Joakim Book is a writer, researcher and editor on all things money, finance and financial history. He holds a masters degree from the University of Oxford and has been a visiting scholar at the American Institute for Economic Research in 2018 and 2019.

His work has been featured in the Financial Times, FT Alphaville, Neue Zürcher Zeitung, Svenska Dagbladet, Zero Hedge, The Property Chronicle and many other outlets. He is a regular contributor and co-founder of the Swedish liberty site Cospaia.se, and a frequent writer at CapX, NotesOnLiberty, and HumanProgress.org.

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