A Climate Change Caucus in the Montana legislature has been formed by Bozeman Representative Mike Phillips and his colleagues. One of their goals is to explore policy options to address global warming. The Caucus has consulted with local experts, including MSU’s Susan Capalbo, an economist who directs the Big Sky Carbon Sequestration Project. This effort is worthwhile for a number of reasons. Here are some.

Montana is experiencing shorter, warmer winters and drier summers. This change impacts our ecosystems. For example, rivers peak weeks earlier than in the past stressing fish habitat and exacerbating the potential for large summer wildfires. These changes are consistent with climate models predicting the greatest warming over the higher latitudes during winter. The latest UN report indicates this warming is “very likely” due to human activity.

A molecule of CO2 has the same effect whether it’s emitted in Bozeman, Burbank, or Beijing. Thus, the world must cooperate if we are to substantially reduce CO2 emissions. It’s impossible to solve this problem without securing emissions reductions from developing countries. (China will pass the US as the largest emitter of carbon dioxide in 2009.) Because their economies depend much more on agriculture, developing nations have the most to lose from climate change. Poverty and a lack of technology limits their ability to adapt—but adapt they must, for change is occurring.

Even if we eliminated every source of carbon dioxide emissions today, we’re still committed to many decades of warming. This is due to the thermal inertia of the oceans and the fact that carbon dioxide stays in the atmosphere for a very long time. If we agreed to the Kyoto treaty goals (and actually met them), we would postpone a slight warming by a few years, at a massive cost.

Compounding these physical realities is a problem of political economy. Here it is. The costs of reducing CO2 will be borne now, but the benefits are uncertain and come in the distant future. Politicians are reluctant to ask constituents to bear these costs, especially when the benefits accrue to others. Recall in 1997 the US Senate voted 95-0 to dismiss anything like the Kyoto treaty. (And 56 of those senators still serve.)

German Chancellor Angela Merkel (with a Ph.D. in physics) provides an example of the political calculus. She opposes an EU plan for emission-reduction standards for cars. Why? The German auto industry makes BMWs, Mercedes, and Audis.

The technologies needed to reduce carbon emissions (e.g., cellulosic biofuels and carbon sequestration) require decades more of R&D investment. Of all the low carbon alternatives, only nuclear energy is ready to come on line soon enough to make a difference. Absent sustained, higher energy costs, investments in alternatives will lag. Hence, the best role for government is to get the institutions right and support basic research.

The most constructive thing the Climate Change Caucus can do is promote discussion about our inevitable tradeoffs. For example, Montana’s mandate that public utilities obtain 15 percent of their electricity from green sources by 2015 will produce higher energy prices. Is this increased cost to consumers worth the environmental gain?

How about a state carbon tax? For example, consider a tax on every industry, home, building, car, and public transportation system. A high tax will spur the development of alternative energy and conservation. But, how do we end environmentally damaging energy subsidies like those for ethanol? (“Ethanol. It’s for drinking, not for driving.”)

Taxes necessarily imply trade-offs. Dissecting them is particularly timely, because Montana sits on a third of all U.S. coal deposits and our Governor is pushing clean coal. Since the demand for electricity is expected to rise, coal will be an important fuel for decades to come. Unless we find ways to burn it much cleaner, we face little hope of reducing carbon emissions.

Limited resources means not all of our goals can be met simultaneously. It’s a fundamental mistake to assume that resources spent cleaning the air do not impact our ability to fix roads or to invest in education, health, or crime control. The Climate Change Caucus provides a valuable service if it focuses on trade-offs not fantasies.