Without Government, the Marketplace Will Not Solve Climate Change

Whether or not the world reaches an international emissions agreement, the U.S. government holds the real solution.

American rejection of climate action is based on suspicion of big government, often expressed as a threat to freedom.

Free markets will not solve climate change by themselves; they have failed to account for the damage done by carbon emissions to people and the environment.

A carbon tax, or emissions-trading system, could slow climate change, but government is needed to create those systems.

History shows that government is also needed to create and fund major technological innovations of the scale required to solve climate change. For that to happen, Americans will have to stop demonizing government.

Will Nations ever come together to keep climate out of the severe danger zone? The question looms like a cloud over United Nations negotiations in Paris this month—the 21st such attempt to forge an international agreement to curb greenhouse gas emissions. A big reason for failing to find common ground is American intransigence on the role of government. If nations are to succeed, the U.S. will have to give up on the idea that free markets alone can adequately address climate change and embrace a government-led plan of action.

A U.N. treaty is effective only if signatory nations are prepared to follow suit with firm domestic policies, but American politicians have resisted action, afraid of paying a political price. The rejection of climate action is largely based on suspicion of big government, and an international treaty is government at its biggest. Yet making a substantial impact on something so fundamental as the sources of energy that drive our civilization is going to require billions (if not trillions) of dollars of investments and incentives that span diverse industries—the kinds of actions that the private sector has historically not made. If nations are ever going to put the brakes on climate change, the U.S. will have to overcome its aversion to government playing a major role.

Unreasonable reliance on free markets

It has long been a maxim in American life that the government that governs best governs least. It was expressed in the weakness of the original Articles of Confederation, in the structure of the U.S. Constitution (designed to prevent the concentration of power) and at various times throughout U.S. history. In the 20th century it was an important element in reactions against federal labor standards, rural electrification and, especially, the New Deal, the spectacular government intervention that followed the equally spectacular market failure of the Great Depression. The deal empowered the federal government with substantive oversight of business, industry, and financial and labor markets. But the opponents of the New Deal never denied the fact of the Depression.

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