Tue, Sep 12, 2017 - Page 9 News List

Harvey raises questions about US’ economic system and politics

By Joseph Stiglitz

Hurricane Harvey has left in its wake upended lives and enormous property damage, estimated by some to be US$150 billion to US$180 billion.

However, the rains that inundated the Texas coast for the better part of a week and the hurricane that has hit Florida raise deep questions about the US’ economic system and politics.

It is ironic, of course, that an event so related to climate change would occur in a state that is home to so many climate-change deniers — and where the economy depends so heavily on the fossil fuels that drive global warming.

Of course, no particular climate event can be directly related to the increase in greenhouse gases in the atmosphere.

However, scientists have long predicted that such increases would boost not only average temperatures, but also weather variability — and especially the occurrence of extreme events such as Hurricane Harvey.

As the Intergovernmental Panel on Climate Change said several years ago: “There is evidence that some extremes have changed as a result of anthropogenic influences, including increases in atmospheric concentrations of greenhouse gases.”

Astrophysicist Adam Frank succinctly said: “Greater warmth means more moisture in the air, which means stronger precipitation.”

Houston and Texas could not have done much by themselves about the increase in greenhouse gases, although they could have taken a more active role in pushing for strong climate policies.

However, local and state authorities could have done a far better job preparing for such events, which hit the area with some frequency.

In responding to the hurricane — and in funding some of the repairs — everyone turns to government, just as they did in the aftermath of the 2008 economic crisis.

Again, it is ironic that this is occurring in a part of the country where government and collective action are so frequently rebuked.

It was no less ironic when the titans of US banking, having preached the neoliberal gospel of downsizing government and eliminating regulations that proscribed some of their most dangerous and anti-social activities, turned to government in their moment of need.

There is an obvious lesson to be learned from such episodes: Markets on their own are incapable of providing the protection that societies need. When markets fail, as they often do, collective action becomes imperative.

As with financial crises, there is a need for preventive collective action to mitigate the effects of climate change. That means ensuring that buildings and infrastructure are constructed to withstand extreme events and are not in areas that are most vulnerable to severe damage.

It also means protecting environmental systems, particularly wetlands, which can play an important role in absorbing the effects of storms. It means eliminating the risk that a natural disaster could lead to the discharge of dangerous chemicals, as happened in Houston, and it means having in place adequate response plans, including for evacuation.

Effective government investments and strong regulations are needed to ensure each of these outcomes, regardless of the prevailing political culture in Texas and elsewhere.

Without adequate regulations, individuals and firms have no incentive to take adequate precautions, because they know that much of the cost of extreme events will be borne by others.

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