Capitalism Will Solve the Climate Problem

Most climate models predicted warming above the mid-20th-century average of about 1 degree Celsius by 2016. They were right. Atmospheric scientists predicted increased frequency of extreme-heat events, and they were right, too. Scientists also predicted warming would be most apparent in East Asia and the Arctic, and it is.

These results aren’t surprising, given that they are based on many independent data sets. Measurements are collected by towers, buoys, aircraft, satellites and more, and are assessed by thousands of scientists world-wide.

.. It’s a sign of the reliability of this research that the insurance industry, with trillions in liability at stake, uses it to determine financial models. Most businesses can’t afford to have “political” opinions about climate change. For companies facing potential impacts from climate trends, to deny warming would be like Macy’s pretending online shopping isn’t disrupting retail.

.. Onetime climate skeptic Jerry Taylor, a former vice president of the Cato Institute, changed his views when he reread Mr. Hansen’s testimony and realized its predictions were “spot on.”

.. Citigroupestimates the cost of unchecked climate change will be in the tens of trillions. The president of the Reinsurance Association of America says global warming could bankrupt his industry. Even fossil-fuel companies like Exxon Mobil and Shell have expressed the urgent need to manage the risks of climate change.
.. Climate change is a byproduct of the prosperity created by the market economy, but the market similarly can be an engine to generate cost-effective solutions. Clean-energy technologies such as wind and solar power already have developed immensely in the past two decades. Public policy that puts a price on carbon emissions would speed the adoption of clean energy by exposing the market to the costs this pollution puts on society. This will accelerate adoption of and private investment in clean-energy technologies.

Though climate change presents American industries a daunting challenge, market-based policies can unleash innovation from investors, inventors and entrepreneurs, who will work to build a more prosperous and safer future. Working with accurate scientific facts and the right incentives, the market will find winning solutions.