Campus experts weigh in on the economics and psychology of climate change

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The theme for this year's Earth Day, which falls on Friday, is "Invest in Our Planet." But what exactly would that look like? Lo Que Pasa spoke with two campus experts to find out.

Derek Lemoine
Associate Professor of Economics

For Lemoine, investing in our planet means "making decisions today with an eye toward the environmental impacts of tomorrow."

Lemoine's research focuses on measuring the cost of climate change and developing policy frameworks to mitigate its effects more efficiently. One possible strategy, he says, would be to make all prices reflect the cost of using the planet's resources, rather than allowing the use of those resources nearly for free.

For example, it currently doesn't cost anything to pump carbon dioxide – which contributes to climbing global temperatures and a changing climate – into the atmosphere.

Q: In a nutshell, what is the problem with environmental impacts and the economy?

Economics is at the heart of the climate change problem, both for determining how climate change affects people and for how we can best control climate change. We have markets that work for us to help us make decisions throughout the day. We ask ourselves if our perceived value for a certain product or service is worth its price. We are disposing greenhouse gases in the atmosphere as if it were a free resource, even though it is not in the end. Pollution is a problem in that it is not part of the cost you see. It is a real cost in that nature and people suffer – but it's a hidden cost. Your whole carbon footprint is basically unpriced. Markets work properly only if it's eventually priced.

Q: So how do you price environmental impacts? How much should a breathable atmosphere cost?

To an economist, the No. 1, big ticket thing you can do to mitigate climate change is to make the markets work properly. And that means you have to include all costs in the market. To do that, you have to attach a price to carbon (carbon dioxide and other greenhouse gases). There are a few ways to do that but, ultimately, they all come down to the fact that there is a real cost to emitting carbon in terms of the impacts on nature and people all the way out forever. That cost needs to be part of the sticker price and then you can decide whether it's better to buy an electric car or a gasoline car, for example.

Q: We hear the term "carbon neutral" all the time. Is that a realistic goal, and where could we be 10 years from now?

I think it is possible to get to zero carbon. The question is always, at what cost? If someone had told us 15 to 20 years ago that solar technology, electric cars and batteries cost what they cost now, technologies for sucking CO2 out of the air and all these other things would be as good as they are, we would have said, "We'll take that deal!" It's not free, but it's not a crazy high cost. We can see the outline of a much cleaner economy, in a very concrete way. Solar is growing very rapidly, and you can imagine a world where that and wind are the dominant sources of energy. You can imagine a world where most new cars are electric, using solar, wind and nuclear energy to charge. You can imagine a world where hydrogen is beginning to replace fossil fuels and you can definitely imagine a world in which technologies to suck carbon out of the air have progressed beyond pilot projects and are being scaled up to be a really big thing by 2040 or 2050. So, you can see that kind of world emerging, and I think that world will emerge. The question is, will we see it emerging in 10 years or in 30 to 60 years? But I think we're on that path, one way or another.

Q: You are working on new economic concepts to accomplish this. How do those work?

An emission tax treats pollution as a one-time deal: You emit, you pay the tax and you're done. If we want to limit warming to official targets, we need to not only eliminate emissions, but suck old emissions out of the atmosphere. I think these technologies are feasible enough and will get cheap enough that we could be doing this at a dramatically high scale, and it's important that we begin to design policy frameworks around that. In my work, I design frameworks similar to the concept of a deposit refund, the kind, you know, from soda cans. Applied to greenhouse gas emissions, it works like this: Anybody who emits carbon has to put down a deposit that funds an asset attached to the units of carbon in the atmosphere. Like any other asset, it can be traded in the economy. Over time, the government deducts value from the asset based on what damage has materialized over time due to climate change. Your refund will then be based on any gap between that and how bad it could have been. If the damages aren't as bad as they could have been, you get a refund. If they end up being really bad, you don't get much back. So, if carbon removal ever becomes cheap, there will be an incentive to do that. And if your refund is ever getting really small because climate change is getting really bad, you also want to do something about it. It makes old carbon into a live game, updating our decisions about it as the world evolves.

Sabrina Helm
PetSmart Associate Professor of Retailing and Consumer Sciences

For Helm, investing in our planet is about the role that each one of us plays: "It's about thinking about the ways we can do something about it, and how we can invest in the future of our children."

Helm studies the interfaces among climate change, consumer behavior and marketing. She is particularly interested in the psychological effects of climate change and how higher education addresses the issue.

Q: Part of your research revolves around "climate anxiety." Can you tell us more about that?

With the kind of news and information we are exposed to, it is totally normal to feel some level of climate anxiety. I would even say, if you feel no anxiety at all with regard to what's going on, you're probably sitting under a rock. At the same time, worrying about changes in our natural environment can have a debilitating effect. We often talk about the mental health crisis in this country, particularly among undergraduate and graduate students. Unfortunately, because the effects of climate change are going to impact our everyday lives, we have to expect that climate anxiety is going to get worse. We have to be cognizant of how media work. All of this doom and gloom, this constant sense of urgency, is very hard to bear. Often, our psychological response is to shut down. We already talk about "climate fatigue," which is hard to believe considering we haven't even started encountering what's going to happen yet, so being fatigued now really does not set us up for success. I think it is important for oneself to entangle what our role is. We are equipped with this anxiety mechanism because it triggers action. It is meant to get us out of a crisis situation.

Q: How can we turn climate anxiety into a positive effect?

From a positive viewpoint, it can help us figure out what we can do jointly to make the situation better. Even talking about my own anxiety with others helps; it's therapeutic for me. Building community, starting to look at your own life and what you can do to become more sustainable, and being responsible with regard to what we buy and all that is a tremendous step. For some people, it triggers a sense of "I can't do enough, I'm just this little piece, and the issue is so big that I can't make any change." I fully understand that – but be aware that this is a short step to denial, which is shutting down, freezing and not helpful. What each of us can do individually, for most of us, is a small piece of a huge puzzle, but imagine the piece isn't there. That puzzle is not looking good. Everybody can do something. Think about what you can do. People can bring together their neighborhoods, they can start lobbying for climate change activity, and they can invest in their local community. They can rearrange their thinking around taxation and how their local governments address these issues.

Q: How are young people, including the current cohort of college students, affected by climate anxiety?

I often think about how we raise them to perceive themselves and to cope with what surely is going to come. We call them (the demographic cohort succeeding millennials] "Gen Z." Z is the last letter in the alphabet. Like they're the last generation. Isn't that stupid? I tell my students, "You may be the last generation embarking on a materialistic, consumptive and unhappiness-inspiring lifestyle, or you may actually do much better, because you are in the position to shape a lifestyle that will be much more sustainable. As others have already said, you should call yourselves the 're-generation,' because you will be rebuilding the planet, you will be rebuilding a beautiful, hopeful future and you will be flourishing."