The Green Paradox: A Supply-Side Approach to Global Warming

University of Munich professor Sinn (Can Germany Be Saved?: The Malaise of the World’s First Welfare State) claims that the current nation-by-nation approach to curbing climate change is counterproductive, resulting in increased use of fossil fuels rather than diminished carbon emissions. This doggedly careful and logical analysis begins by offering proof of the reality of climate change and why we should act to slow it now. Incorporating extensive charts and formulas, Sinn details the emerging global energy mix, notably demonstrating how biofuels—the most direct substitute for fossil fuels—create global starvation as they compete with food production. In addition, he shows how limiting carbon emissions creates the “green paradox”: fossil fuel producers, concerned about anticipated future limits on carbon, hurry to extract resources while they can, adding to the supply, which lowers the cost and encourages use. Furthermore, as countries complying with the Kyoto Treaty lower their carbon use, the price of fossil fuels declines due to less demand, encouraging non-Kyoto countries to buy them, offsetting the decreases of the Kyoto countries. Sinn proposes a new focus on the supply side: imposing capital source taxes that make extracting resources less attractive to fossil fuel producers. The book’s technical details may glaze the eyes of noneconomists, but Sinn’s conscientious, gentle voice and reasonable proposals portray a humanist sincerely seeking practical solutions. (Feb.)