Sarewitz on Innovation
February 5th, 2009Posted by: Roger Pielke, Jr.
Daniel Sarewitz, a friend and a collaborator, is really smart. NPR has figured this out and interviewed him about climate change and energy policy. The story and link to the audio interview is here. Here is an excerpt:
And even if the public became passionate about climate change, Sarewitz says, it’s hard to imagine how they would warm to the idea of making carbon-emitting fuels prohibitively expensive. Just try to imagine how much that would cost.
“The economic dislocation that would be created by getting to that sort of level would absolutely be immense,” he says. “And it’s easy to be casual about that or it’s easy to pin that kind of argument on conservative Republicans or on the executives of oil corporations, but nevertheless it is absolutely true you would be talking about something that would be destabilizing to global economies.”
History Lessons
Despite this gloomy perspective, Sarewitz isn’t a naysayer or a cynic. But he has been trying to think of another way to deal with climate change. To do that, he’s looked back in history to see how we managed other major transformations. One example is how America transformed agriculture over the past century. The United States government created a highly successful, century-long effort to make food more abundant and affordable.
“And it didn’t do so by setting any particular target or timetable. It did so by investing in research and development — and very importantly, in institutions,” Sarewitz says.
For example, agricultural extension programs brought together researchers to tackle the big problems, and farmers to put the solutions to work quickly. The key to it all was speeding up innovation. And the good news is none of this required an ugly political or public debate. That’s the model Sarewitz would like to use for climate change.
“The idea really is to take the political heat off of climate change and instead move this into the realm of policy wonkdom,” he says, “where many many small decisions made across many agencies, many types of policies, many domains, set the conditions for moving in the right direction without demanding that people accept that this is the most important problem in the world.”
Sarewitz is now hard at work trying to identify what institutions we need to drive that transformation in the coming decades. The ultimate goal is to make renewable energy about as cheap as fossil fuels. Otherwise, there’s little hope that the nations of the world will agree to tackle climate change. Sarewitz says he knows the Obama administration won’t abandon its current path to craft climate laws and a treaty.
“But there’s no reason they can’t at the same time… understand that the real action is going to be on the innovation front,” Sarewitz says.
February 5th, 2009 at 7:34 am
The ag extension model, even though it has proven to be effective, has clashed with the ideology that all research is best done through competitive grants. So instead of the folks who need to work with the technology being involved, and the relevant state governments (after all, the land grant universities are state institutions), we have panels of scientists usually at the national level, determining the direction research based on what they think- and the utility is not generally questioned critically, in my experience, nor are stakeholders involved in other than perhaps setting broad research direction. I call it the “sounds plausible” level of review of utility. For years we have been moving away from the successful research-extension-education joint land grant institution model based on the ideology of competitive grants being best-perhaps it is time to examine this belief more critically.
Plant breeding is one example of a discipline that has suffered, and it seems likely it will be fundamentally important in a changing climate.
February 5th, 2009 at 10:11 am
“The United States government created a highly successful, century-long effort to make food more abundant and affordable.”
What an amazing coincidence! Apparently, the planet on which Dan Sarewitz and the NPR reporter live also has a United States government!
On the planet on which I live, the “first modern farm bill” of the United States government actually had the goal of REDUCING food and agricultural products production. That made food and agricultural products LESS affordable. (This was during something we on this planet call the “Great Depression.”)
Here’s what our wonderful “Wikipedia” says about the Agricultural Adjustment Act of 1933 (the “first modern U.S. farm bill”):
“The Agricultural Adjustment Act (Pub.L. 73-10, enacted May 12, 1933) restricted production during the New Deal by paying farmers to reduce crop area. Its purpose was to reduce crop surplus so as to effectively raise the value of crops, thereby giving farmers relative stability again. The farmers were paid subsidies by the federal government for leaving some of their fields unused. The Act created a new agency, the Agricultural Adjustment Administration, to oversee the distribution of the subsidies. It is considered the first modern U.S. farm bill.”
“By the time the Agricultural Adjustment Administration began its operations, the agricultural season for many crops was already under way. The agency oversaw a large-scale destruction of existing cotton crops and livestock in an attempt to reduce surpluses. No other crops or animals were affected in 1933, but six million piglets and 220,000 pregnant cows were slaughtered in the AAA’s effort to raise prices. Many cotton farmers plowed under a quarter of their crop in accordance with the AAA’s plans.[1] Adlai Stevenson and Telford Taylor worked in the AAA.”
“Large farms benefited from the AAA policy of reducing surpluses, having “gross farm income increas[e] by 50% during the first three years of the New Deal”.[2] This was achieved because large landowners would evict tenant farmers and sharecroppers in order to keep them from farming their leased acreage; the landowner would then receive the payment for not farming the land.[3] Futhermore, those same land owners, having forced out some of the competition, would then use those displaced farmers as cheap farm labor.[4]”
“The increase in gross income for farmers was largely paid for through government subsidies. Despite the reduced production, food price increases between 1933 and 1937 were negligible.[2] Consumers bore the brunt of higher food prices and were “horrified with its policy of enforced scarcity.”[5] A Gallup Poll printed in The Washington Post revealed that a majority of the American public opposed the AAA.[5]”
P.S. And it violated the Constitution, to boot!
February 5th, 2009 at 2:18 pm
What I worry about here is that economics, as first-year students are always told, is the study of deciding how to allocate scarce resources. Julian Simon and those who follow in his footsteps (e.g., Nordhaus & Schellenberger) try to avoid the nasty business of allocating scarce resources by assuming that human ingenuity can always alleviate scarcity, so solving the climate problem is simply a matter of optimistically searching for clean and cheap energy sources.
If such technology can be developed quickly, I’m all for it; but it doesn’t seem wise to wager so much on the hope that technology will arrive in the nick of time—like the God from a machine at the end of so many Greek plays, or the doorman’s inheritance at the end of Der Letzte Mann—to spare us having to make hard choices.
Unlike Simon and others, Sarewitz wisely does not claim that cheap clean energy is inevitable or easy. He explicitly says the quest may fail. But he despairs of any other solution: “The ultimate goal is to make renewable energy about as cheap as fossil fuels. Otherwise, there’s little hope that the nations of the world will agree to tackle climate change.”
I am not so pessimistic about the prospect of people reducing their consumption of energy and other goods to benefit future generations. Albert O. Hirschman once wrote a perceptive essay, “The Search for Paradigms as a Hindrance to Understanding” in which he said that it’s easy for economists, political scientists, and similar scholars to identify obstacles to making the world a better place, and that there are so many such obstacles that it may seem that failure is inevitable. Hirschman exhorted scholars not to take the easy road of writing dispiriting papers about the inevitability of failure, but instead to adopt a tone of professional responsibility to overcome or avoid the obstacles and to make progress despite their presence or at least to allow room for the unexpected (both good and bad).
Sarewitz perhaps tries to do this with his call for a big clean energy research program, but I’d wish that he and others would devote more energy to the problem of consumption and behavior: is it really impossible or impractical for Americans to reduce our demand for energy and other resources?
I support the policy measures Sarewitz recommends—they’re smart—but we need some insurance in case cheap clean energy proves elusive, and hard choices about scarce resources become inevitable. That insurance will have to address questions not of technology, but of behavior, economics, and intergenerational justice.
February 5th, 2009 at 8:09 pm
Mark-
I don’t think that Sarewitz was speaking of a farm bill in the same sense you are. He was talking about the ag extension model. The first piece was the establishment of land grant colleges uner the 1862 Morrill Act. (the below info is from Wikepedia)
The purpose of the land-grant colleges was:
“without excluding other scientific and classical studies and including military tactic, to teach such branches of learning as are related to agriculture and the mechanic arts, in such manner as the legislatures of the States may respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions in life.”
So first there was an educational infrastructure. Interestingly according to Wikepedia “In imitation of the land-grant colleges’ focus on agricultural and mechanical research, Congress later established programs of sea grant colleges (aquatic research, in 1966), space grant colleges (space research, in 1988), and sun grant colleges (sustainable energy research, in 2003).”
The next piece was research in the Hatch Act of 1887 which gave federal land grants to states in order to create a series of agricultural experiment stations, as well as pass along new information, especially in the areas of soil minerals and plant growth. State agricultural stations created under this act were usually connected with land-grant state colleges and universities founded under the Morrill Act of 1862. This funding continues to this day, although many administrations have tried to reduce it based on the concept that running competitive grants nationally with panels composed of scientists leads to better research, and Congress has tended to restore the funding (so-called “formula funds”).
The final piece was the Smith-Lever Act of 1914 that established a system of cooperative extension services, connected to the land-grant universities, in order to inform people about current developments in agriculture, home economics, and related subjects. At the current time, this includes forestry and natural resources.
I believe this system, which links education, research and extension towards desirable ends, is probably what Sarewitz was referring to.
February 5th, 2009 at 8:34 pm
“Julian Simon and those who follow in his footsteps (e.g., Nordhaus & Schellenberger)…”
I doubt most admirers of Julian Simon would consider that Nordhaus and Schellenberger “follow in his footsteps.”
“…try to avoid the nasty business of allocating scarce resources…”
As you noted, economics ***IS*** the study of “allocation of scarce resources (that have other uses)…”
So how could Julian Simon, who was an economist, think that is was possible to “avoid” decisions about how to allocate scarce resources?
I think rather that Julian Simon would suggest that it would generally be better that people allocate their scarce resources as they themselves saw fit, rather than giving their scarce resources to the government for allocation.
“Unlike Simon and others, Sarewitz wisely does not claim that cheap clean energy is inevitable or easy.”
Leaving aside the debateable assertion that Julian Simon ever claimed that “cheap clean energy” is “easy”…how do you think Sarewitz’ position is at all different from Nordhaus and Shellenberger?
“…is it really impossible or impractical for Americans to reduce our demand for energy and other resources?”
It’s not impossible or impractical. But it is extremely unlikely that that any voluntary reductions in energy use by Americans with current technologies will have any significant effect on temperatures in the future. The simple fact is that total greenhouse gas emissions by Americans are less than 1/4th of world emissions, and are declining rapidly as a percentage of world emissions.
February 5th, 2009 at 9:22 pm
“…is it really impossible or impractical for Americans to reduce our demand for energy and other resources?”
In addition to Mark Bahner’s point that reducing American emissions will not solve anything unless the emerging economies also agree to stop increasing their emissions — which is extremely unlikely — I would also point out that a reduction of our emissions by 90-95% (which is what is wanted in order to stabilize CO2 in the atmosphere) likely is impossible or impractical without a dramatic advance in technology (or a dramatic reduction in population).
February 5th, 2009 at 10:53 pm
Mark: When I read The Ultimate Reaource II, Simon seems clearly to be saying that we don’t need to worry about running out of oil or any other natural resource because human ingenuity will provide cheap alternative energy sources to replace them, fairly painlessly. The whole argument of Ultimate Resource II is that scarcity does not exist because resources are not finite. That’s why he scoffed at Ehrlich as well as the Peak Oil crowd for saying that we have to make tough choices in allocating natural resources between today’s and future generations.
As to N&S, I see them very much following in Simon’s footsteps, regardless what we might speculate as to how Simon would feel about them if he were still alive. Break Through is basically a restatement of Simon’s thesis that instead of preaching gloom and doom about the environment, we can cheerfully invent our way out of any dilemma.
Mike and Mark: Why should emerging economies agree to freeze their per-capita emissions at one fifth or less of the U.S. level? Perhaps we could gain their consent to equal per-capita emissions for all nations, but that would require deep cuts by the U.S.
I agree that a 90-95% reduction in U.S. CO2 emissions does require a breakthrough in technology, but that’s not necessarily going to happen in time to solve the whole problem. To buy time until the technology arrives, we may indeed need to sacrifice some of our consumption for a number of decades.
February 5th, 2009 at 11:50 pm
Roger, I’m happy to take you on your word that Dan Sarewitz is smart, but unfortunately that doesn’t tell us much about his understanding of how economies function or the history, dynamics or prospects of the regulatory state – on which he seems to be a bit off.
First, I think I’m with Mark on agriculture: the US government did NOT “create[] a highly successful, century-long effort to make food more abundant and affordable”. Credit for the successes of US agriculture is due largely to farmers, property rights and voluntary cooperation with bankers and researchers. The government has played a limited role in successes, while contributing heavily to failures and ongoing problems.
Second, while I agree with Sarewitz’s skepticism as to whether “politicians can deliberately manage a transformation of [any large] scale, either through legislation or through climate treaties,” his suggestion of “many many small decisions made across many agencies, many types of policies, many domains, set the conditions for moving in the right direction without demanding that people accept that this is the most important problem in the world,” works only for ADAPTATION efforts, which cannot be centrally coordinated and essentially involve individual and cooperative responses across the world. On the MITIGATION side, “tak[ing] the political heat off of climate change and instead mov[ing] this into the realm of policy wonkdom” is both a recipe for wasting alot of taxpayer dollars via political and bureaucratic decisions, and won’t work because the nature of the commons involved is global – and so global coorperation in required.
In this connection, while the problem of coordination is difficult, I think that Sarewitz has both overstated it and misstated it. It is not the job of government to “creat[e] a whole new basis for the global economy,” nor is it necessary to “ask[] people to … pay a huge upfront cost for benefits many decades down the road that they can’t even anticipate or predict”. The government can simply move from taxing income to taxing consumption, with a particular emphasis on carbon – which would leave citizens with roughly the same amount of money in their pockets while encoraging private investment in way that economists have been calling for for decades – and it can coordinate this with other countries through aid and trade efforts.
February 6th, 2009 at 12:43 am
Mark B-
What are century-long trends in agricultural productivity and prices?
Jonathan-
I can’t speak for Dan, but even under the most aggressive scenarios of energy efficiency gains, total global and US energy demand will increase in the future. It is not a matter of “if” but “by how much”. Efficiency is a huge part of the solution, but not the whole thing.
Like Sarewitz, I am of the view that technological change is far easier to accomplish than global behavioral change.
Docpine-
Yes, your interpretation of Sarewitz’s analogy seems right to me, though of course it was exactly this model that contributed to declining prices and increasing productivity over a century.
Jonathan-
What is wrong with “cheerfully inventing ourselves out of any dilemma”?
Tokyo Tom-
I’m all for a tax on carbon (as I’ve argued with Chris Green), so no disagreement there. i just don’t think it can do the job.
Interestingly enough, as Jesse Ausubel has argued the world has already dramatically decarbonized without any such global agreement aimed at that end. Mitigation seeks to accelerate that process. The exact same dynamics that you ascribe to adaptation I think also apply to mitigation. A carbon tax can be part of that equation, but in reality can only go so far.
Thanks all!
February 6th, 2009 at 9:12 am
“Why should emerging economies agree to freeze their per-capita emissions at one fifth or less of the U.S. level?”
Why, indeed? That is exactly the point.
“I agree that a 90-95% reduction in U.S. CO2 emissions does require a breakthrough in technology, but that’s not necessarily going to happen in time to solve the whole problem. To buy time until the technology arrives, we may indeed need to sacrifice some of our consumption for a number of decades.”
Saying “we need to sacrifice some of our consumption” makes it sound like it’s no big deal. But to sacrifice 90-95% of our consumption is a very big deal. Reductions in consumption, increases in efficiency, etc. are not going to get us there, even though that seems to be implied by those arguing against emphasizing technology. Promoting efficiency, etc., is good — I’m all in favor of it — but, like those who were saying a while back (about a somewhat different problem) that “we can’t drill our way out of this”, I say that we can’t conserve our way out of it, either. While efficiency, etc., are good, the real solution (if there is one) will come through technology — or massive reduction in population, but I don’t think we want to go there…
February 6th, 2009 at 7:54 pm
Hi Roger,
You ask, “What are century-long trends in agricultural productivity and prices?
”
I’m not sure what the “wink” means, but I hope it means, “I know my question isn’t relevant!”
As I’m sure you know, the century-long trend in U.S. agricultural productivity is strongly upward, and the century-long trend in U.S. prices for agricultural goods is strongly downward. But that doesn’t necessarily have anything to do with the federal government’s spending or involvement in agriculture.
In fact, I think a good case can be made that the federal government’s spending and involvement in agriculture (e.g., Roosevelt’s Agricultural Adjustment Act, which is arguably the earliest example of massive federal government involvement in agriculture) has actually worked against the trends of increasing productivity and decreasing prices.
So I hope the wink meant, “I recognize that ‘cum hoc, ergo propter hoc’ is a logical fallacy.”
http://en.wikipedia.org/wiki/Correlation_does_not_imply_causation
Best wishes,
Mark
February 6th, 2009 at 9:12 pm
Mark-
I will readily admit that the US has often pursued conflicting goals in its long term agricultural policies. But you lose me when you say that aggregate trends in prices and production “doesn’t necessarily” have anything to do with federal policy, or even stronger, that the federal role has “worked against” increasing productivity and decreasing prices. Ausubel argues that energy policies “don’t matter” and I suppose your argument is similar in this context.
It is complicated, yes, but what is remarkable about innovation in agriculture (as measured by prices and productivity) is that it has been sustained even in the context of price supports, trade policies, and subsidies (among other policies) that work in the other direction. This is another reason why Sarewitz’s analogy is a good one.
February 6th, 2009 at 9:43 pm
“I don’t think that Sarewitz was speaking of a farm bill in the same sense you are. He was talking about the ag extension model.”
Yes, I agree. I just thought it was important to point out, if the federal government is being credited with doing wonderful for agriculture, that the overall effect of the federal government on agriculture has been far less rosy.
The latest funding I found for the agricultural extension program was $550 million a year.
In contrast, federal subsidies for sugar are estimated by the GOA to cost taxpayers $1.9 billion per year. And corn ethanol subsidies were $7.0 billion in 2006:
http://zfacts.com/p/63.html
P.S. Of course, ethanol subsidies might help farmers…but they sure don’t “make food more abundant and affordable.”
February 6th, 2009 at 10:33 pm
Hi Roger,
You write, “But you lose me when you say that aggregate trends in prices and production “doesn’t necessarily” have anything to do with federal policy,…”
Ummm…”correlation does not mean causality”? You’re not familiar with that?
In the last 100 years, the size of optical telescopes have increased tremendously, but it’s pretty clear that the increases in optical telescope size haven’t increased agricultural productivity, isn’t it?
And even though the correlation is positively uncanny, you wouldn’t say that U.S. patents cause weather-related disasters, would you?:
http://markbahner.typepad.com/random_thoughts/2007/04/us_patents_caus.html
In order to figure out whether the U.S. federal government agricultural extension program has had any effect on agricultural productivity or food prices, we would need to look at what caused the increases in agricultural and reduced food prices, and see if the federal agricultural extension program was somehow involved in those things.
For example, one huge factor of which I’m aware is the development of artificial nitrogenous fertilizers (via the Haber-Bosch process):
http://en.wikipedia.org/wiki/Haber_process
Did the U.S. federal agricultural extension service have anything to do with developing or deploying this process? Not that I know of.
Also, certainly developments in tractors/mechanized farm equipment have had a huge effect. Has the federal agricultural extension service been heavily involved with developing this equipment? Not that I know of.
(But I don’t know anything about this subject.)
Again, just because the U.S. federal government has had an agricultural extension service for the last 100 years, and farm productivity has increased, and prices have gone down, doesn’t mean that the latter two have been *caused* by the federal agricultural extension service.
You conclude, “It is complicated, yes, but what is remarkable about innovation in agriculture (as measured by prices and productivity) is that it has been sustained even in the context of price supports, trade policies, and subsidies (among other policies) that work in the other direction. This is another reason why Sarewitz’s analogy is a good one.”
No, it says nothing about Sarewitz’s analogy. Sarewitz didn’t supply any evidence that the increases in agricultural productivity or decreases in food prices were *caused* by the federal agricultural extension service. To do that, Sarewitz would have to identify the factors that caused increased agricultural productivity and decreases in food prices, and explain how the federal agricultural extension service was involved in those factors. For example, did the federal agricultural extension service have something to do with the development of artificial fertilizers? Or developments in farm mechanization? (Or whatever caused the impressive gains in productivity and reduced food prices?)
February 7th, 2009 at 3:30 am
Mark-
I could do without the snark.
Much has been written on the role of agricultural policies on productivity, see, e.g.,
http://www.ers.usda.gov/publications/aib740/aib740.pdf
“Several factors have been identified in the social science
literature as the most important sources of productivity
change in agriculture:
• Research and development,
• Extension,
• Education,
• Infrastructure, and
• Government programs.”
To suggest that government policies have had no role is just silly.
February 10th, 2009 at 10:16 am
“I could do without the snark.”
I apologize. Perhaps we’re misunderstanding one another. I think from your final statement that we probably are. You write:
“To suggest that government policies have had no role (in agricultural productivity) is just silly.”
Well, that may be the case, but that wasn’t what I was suggesting. (And perhaps *you* weren’t suggesting that federal government extension service spending was solely responsible for the rise in agricultural productivity in the past century, but that’s what I inferred from your question simply about the trend in agricultural productivity.)
The original issue–what Dan Sarewitz was talking about–was the effect of *federal* spending on agriculture. And specifically the effect of *federal* spending on *agricultural extension service* work.
I don’t think it’s at all a stretch to say that *federal* spending on *agicultural extension services* did not have a significant impact on agricultural productivity in the United States in the past century.
To start with, federal spending on agricultural extension work is not a huge amount. The latest figure I found (circa 2006) was $550 million per year. That’s not a huge amount of money. Further, even the article you reference calculates the social rate of return of agricultural extension service research as being the lowest among research types evaluated (see Table 2).
Perhaps we’re talking past each other in the same way that pro- and anti-AGW people do, with neither side acknowledging that it’s not a 100%-one-or-the-other situation.
But even after reading the article you referenced, I still maintain that *federal* spending on agricultural extension services did not have a significant effect on agricultural productivity in the past 100 years (e.g., federal spending on agricultural extension services was responsible for less than a quarter of the agricultural productivity growth in the last 100 years).
P.S. Now, it’s quite possible that OTHER federal research–e.g. federal basic research, and federal applied research–has indeed had a significant effect on farm productivity. From the discussion of Table 2:
“The rate of return seems highest for publicly supported basic research, followed by applied public research, private research, farmers’ education, and, finally, public extension (table 2).”
(To know whether federal basic research and federal applied research had a significant effect on farm productivity, we’d need to know not only the rates of return on those types of research, but also how much was spent on those types of research.)
February 10th, 2009 at 10:54 am
Hi Jonathan,
It wasn’t really relevant to this post, so I’ve responded to your comments on Julian Simon’s message on my own blog.
http://markbahner.typepad.com/random_thoughts/2009/02/julian-simons-message.html
Mark