Brothers Battle Climate Change on Two Fronts
WASHINGTON
— In the New Mexico of the 1950s, the two brothers grew up steeped in
the beauty of the landscape, the economics of energy and the power of
science. They skied, fly-fished, explored on the family’s 50,000-acre
sheep ranch, watched oil towns go boom and bust, and talked of the
nuclear weapons up the road at Los Alamos.
Today
the work of Robert and William Nordhaus is profoundly shaping how the
United States and other nations take on global warming.
Bill
Nordhaus, 72, a Yale economist who is seen as a leading contender for a
Nobel Prize, came up with the idea of a carbon tax and effectively
invented the economics of climate change. Bob, 77, a prominent
Washington energy lawyer, wrote an obscure provision in the Clean Air Act of 1970 that is now the legal basis for a landmark climate change regulation, to be unveiled by the White House next month, that could close hundreds of coal-fired power plants and define President Obama’s environmental legacy.
Called
the Manning brothers of climate change, the mild-mannered, dry-witted
Nordhauses are scions of a New Mexico family long rooted in the land,
which powerfully shaped who the brothers became. But for the Nordhaus
brothers, protecting the earth depends far more on dispassionate
thinking and intellectual rigor than on showy protests outside the White
House.
They
have neatly divided their world — Bill is the academic theorist, Bob
the legal mind and political pragmatist — but their work is intertwined.
“I
tend to have lots of crazy ideas, and I run them by Bob first,” Bill
said by phone from the Acela train between Boston and New Haven, Conn.
He described himself as “an academic economist” who has stayed out of
policy debates, although his ideas have not.
Bob
agreed. “Bill’s work is about what needs to be done and how soon, using
the tools of economic analysis,” he said over a recent lunch in
Washington. “My work is: How do you convert that into a legal and
regulatory policy?”
The
two have a friendly rivalry, but both believe that cutting carbon
pollution is crucial to protecting the environment and the economy from
the risks posed by climate change. They also agree on the best way to do
it: A Bill-style carbon tax, they say, would be far more effective and
efficient than a Bob-style regulation.
Their
story starts in Albuquerque, where their father, the grandson of a
wealthy Santa Fe merchant, started the ski resort at the top of
Albuquerque’s Sandia Peak and with a partner built the city’s iconic
tram up the granite cliffs to get there. A specialist in energy and
Native American law, Robert Nordhaus Sr. won a Supreme Court case giving Apache tribes the authority to levy fees on the oil companies that drilled on their native land.
Like
him, both brothers went east to Yale, where in 1963 Bob graduated from
the law school and Bill from Yale College. From there Bob headed to
Washington for a job as a staff lawyer in the House legislative
counsel’s office.
He
was still there in 1970, working on the bill that would become the
Clean Air Act, when his bosses came to him with an unusual assignment:
The legislation already included language to regulate known pollutants,
such as mercury and smog, but could he write a provision giving the
federal government the authority to regulate as-yet-unknown pollutants
of the future?
Bob
wrote the provision — it became Section 111(d) of the Clean Air Act —
at a time when carbon dioxide, a greenhouse gas, was not considered
harmful. It was not until 2009 that the Environmental Protection Agency defined carbon dioxide as a harmful pollutant
because of its contribution to global warming. Thus it falls into the
category of an unknown “pollutant of the future.” Section 111(d), after
languishing in obscurity for decades, is now the legal rationale for the
Obama administration’s plan to regulate carbon emissions without a law
passed by Congress.
While
Bob began his career in Washington, Bill received a Ph.D. in economics
from the Massachusetts Institute of Technology and began teaching at
Yale. By the late 1970s, when an increasing number of scientists were
raising the threat of global warming, Bill wrote a paper proposing a tax
on industries and businesses based on the amount of carbon they emitted
into the air. The idea was revolutionary at the time, but economists,
scientists and many world leaders now say it will have a powerful market
effect and is the best way to stave off the catastrophic impacts of a
warming world. Already, more than 30 countries have passed
carbon-pricing laws.
In
the ensuing decades at Yale, Bill developed an economic model that put a
price tag on the effects of climate change, like more droughts,
flooding and crop failures and stronger hurricanes. He called it the
Dynamic Integrated Climate-Economy model, or DICE.
“The
name was both descriptive (representing a dynamic integrated model of
climate and the economy) but also consciously aimed to suggest that we
are gambling with the future of our planet,” Bill wrote in an email.
DICE
profoundly changed climate policy. Although the chief political
argument against curbing carbon emissions from cars and coal plants has
long been that doing so would harm the economy, the DICE models show
that, depending on various scenarios, one ton of carbon pollution can
inflict $20 to $30 in economic damage — a major cost, given that the
global economy emits about 36 billion tons of carbon a year.
Bill’s work “was seminal,” said Robert Stavins, director of the Harvard Environmental Economics Program.
But it is, for the time being, politically untenable in the United States. The conservative Heritage Foundation has called the DICE model
“flawed beyond use for policy making” and warned that it should not be
used to justify “trillions of dollars of government policies and
burdensome regulations.”
Here
the work of Bob comes in: Mr. Obama tried but failed to push a
carbon-pricing bill through Congress in his first term, which is why he
has turned to Bob’s section of the Clean Air Act as the legal
underpinning for the regulation due out in June.
Bob,
who was an energy adviser to President Jimmy Carter and general counsel
at the Department of Energy under President Bill Clinton, now says that
because he was not writing the provision with climate change in mind,
the new regulation is an imperfect and perhaps legally vulnerable
solution to regulating carbon pollution. Environmental lawyers note that
it has almost never been used.
“I call it the 40-year-old virgin,” said David Doniger, a lawyer with the Natural Resources Defense Council, an advocacy group.
But
one way the E.P.A. will justify the new regulation is with an analysis
showing that the economic benefits of the climate change rule would
outweigh the costs.
A core component of that analysis? The DICE model.
Back
in New Mexico, Bob recalled, he and Bill — the oldest and youngest
brothers among four siblings — could not help noticing the changing
world of energy around them. In the 1950s, he said, as the Los Alamos
weapons program expanded, the state changed “from a pastoral economy,
split between ranching, irrigated farming and extractive industries, to
defense-related work, which was a whole different world.”
They
also paid close attention to the climate changes, and periodic
droughts, that affected the family ski business and their lives
outdoors.
“Growing up in New Mexico,” he said, “you’re aware of the very fragile ecosystem.”
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