MAKING OUR CHILDREN PAY FOR MITIGATION
A ARON M ALTAIS1
This author produced PDF is the accepted but pre-copy-editing version of a chapter that appears in
A. Maltais & C. McKinnon (eds) The Ethics of Climate Governance, published by Rowman & Littlefield
Publishers Inc in July of 2015.
INTRODUCTION
Investments in mitigating climate change have their greatest environmental impact over
the long‐term. As a consequence the incentives to invest in cutting greenhouse gas
emissions today appear to be weak. In response to this challenge there has been
increasing attention given to the idea that current generations can be motivated to start
financing mitigation at much higher levels today by shifting these costs to the future
through national debt. Shifting costs to the future in this way benefits future generations
by breaking existing patterns of delaying large‐scale investment in low‐carbon energy
and efficiency. As we will see in this chapter, it does appear to be technically feasible to
transfer the costs of investments made today to the future in such a way that people
alive today do not incur any net cost (e.g. Foley, 2009; Rendall, 2011; Broome, 2012;
Rezai et al., 2012; Rozenberg et al., 2013). The basic idea then is that governments can
break current patterns of delaying mitigation investments by ensuring that their
existing constituents do not need to make significant sacrifices.
The normative argument that we should finance mitigation by ‘borrowing from the
future’ can be advanced in two general ways. The first is based on the empirical
prediction that we will continue to see a pattern of very weak motivation among current
generations to accept short‐term mitigation costs. Thus, unless it becomes economically
beneficial over the short‐term to markedly increase investments in low‐carbon energy
and efficiency we should not expect to see sufficient investment to avoid dangerous
levels of global warming. On this view finding a way to pass on the costs of mitigation to
future generations is an imperfect solution to the problem of weak moral motivation
today but much better than the status‐quo (Broome, 2012, 37‐48). On the second view,
because we have good reason to expect that people in the future will be wealthier than
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people today (at least over the next century or so) and because the benefits of mitigation
largely benefit people in the future, passing on most of the costs of mitigation to the
future is actually a fair way to distribute these costs (Rendall, 2011). Notice that the
second view is not dependent on the empirical premise that people today will not be
motivated to make sufficient short‐term sacrifices, although the problem of motivating
the present will give additional support to the argument for redistributing costs to the
future.
In this chapter I focus on the implications of the first approach. Specifically, the aim of
this chapter is to take seriously the possibility that climate change has produced an
extremely intractable political problem and that we must now consider strong measures
that can break existing patterns of delaying mitigation. I defend the claim that if climate
change involves a stark conflict of interests between current and future generations,
then borrowing from the future would be both strategically and normatively much
better than the status quo.2 However, I nevertheless challenge the borrowing from the
future proposal on the grounds that it is not in fact the powerful tool for motivating
existing agents that its proponents imagine it to be. The purpose of developing this
critical argument is not, however, simply to throw doubt onto the idea of borrowing
from the future.
Debt financing climate mitigation is a form of intergenerational buck‐passing. In the
climate ethics literature this type of buck‐passing is usually viewed as deeply
objectionable. As a consequence, normative theorising about climate governance tends
to focus on institutional reforms that better represent the interests of future generations
and inhibit buck‐passing. My ultimate concern in this chapter is to argue that we cannot
limit prescriptive normative theorising about climate governance to these types of
reforms. If we really do find ourselves in a political context where the prospects for
effective action are very poor then strategic forms of buck‐passing may also make an
important positive contribution to avoiding dangerous global climate change.
Consequently, if debt financing is not as powerful of a motivational tool as imagined we
still have strong reasons, I will argue, to identify other strategies that will change agents’
incentive structures. To this end I propose an alternative form of passing on the costs of
mitigation to the future that warrants consideration.
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The chapter is organised into five sections. Section I accounts for why motivating
existing agents to invest in climate mitigation is taken to be such a difficult challenge.
Section II defends the view that borrowing from the future can be normatively
justifiable. Section III explains how it is thought to be possible to dedicate significantly
more resources to mitigation today without current agents experiencing this as a cost.
Section IV challenges the idea that borrowing from the future is a powerful tool for
motivating the present to invest in mitigation. Section V proposes that we consider the
development of an alternative form of explicitly pre‐committing the future to mitigation
costs. I defend this type of governance instrument at a normative level, specifically
against the objections that it is 1) a form of tyranny of the present over the future and 2)
morally corrupt.
I ‐ THE WICKEDNESS OF TIME IN THE ANTHROPOCENE
The capacity of the atmosphere, the oceans, and other natural sinks to safely carry GHG
emissions is a global common pool resource. The mitigation of climate change is a global
public good. We currently find ourselves in familiar conditions of unsustainable use of
common resources and under provision of public goods. However, these cooperative
challenges appear to be unusually difficult in the case of global warming. This is in part
because of the large number and variety of actors that need to be coordinated and
because of the scale and influence of special interests in the fossil fuel sector. In addition,
there is some divergence between where the impacts of climate change will be most
severe and which countries must bear the greatest mitigation costs. We are also
currently lacking a leading state with strong incentives to act unilaterally and to
coordinate other states. The high cost, complexity, and technological uncertainty
involved in reforming our economies is another commonly highlighted obstacle. Yet, of
all these impeding factors it is the role of time that appears to be the most toxic feature
of this political problem.
In a recent paper Hansen et al. (2011) estimate that it takes 100 years to see 60‐90 per
cent of the warming response associated with GHG emissions. Long time lags in the
climate system between emissions and temperature responses, between temperature
stresses and damaging environmental consequences, and between effective mitigation
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policies and substantial infrastructure reform create a situation where investments in
mitigation make little difference to the climate damages agents will experience over
their lifetimes. It is past and probable on‐going emissions that will have the greatest
effects on current generations. From a game theoretic perspective this means that the
relevant agents do not share in a preference for the collectively cooperative outcome
compared to the collectively non‐cooperative outcome. The consumption interests of
people alive today are best promoted by not mitigating climate change.3 In a more
typical commons problem it is the agents’ preferences for the collectively cooperative
outcome that can be leveraged to establish norms and institutions that allow individuals
to escape prisoner’s dilemma dynamics (e.g. Ostrom, 1990). In the climate case there is
no prisoner’s dilemma between generations. Rather the central problem is to motivate
existing agents to invest in protecting the commons for future agents (Gardiner, 2001).
As time moves forward and irrespective of the climate conditions each generation is
born into the same problem of weak incentives will be present (Gardiner, 2001).
Overcoming the intergenerational structure of the problem requires that agents be
motivated by the interests of others (i.e. future agents) to a much greater degree than is
true for agents in typical collective action problems. Norms of fair reciprocity may
simply not be enough. Importantly, if we can redress the intergenerational motivational
obstacle we can still face a typical global public goods problem between states. Even
more importantly, as time passes the costs of mitigation increase, environmental
damages increase, and the amount that has to be invested into adapting to climate
change increases (Vaughan et al., 2009; Luderer et al., 2012; Rogelj et al., 2013). This
means that the passing of time has the real potential to create a positive feedback where
delay breeds stronger and stronger incentives for further delay (Shue 2010, Gardiner,
2011, pp. 185–209). The assessment above is not, of course, an attempt to give a full
account of individuals’ or political communities’ motivations or to depict how
individuals and groups have actually responded to climate change. The account above
aims only to describe key obstacles to effective climate politics that can help us
understand why the world’s states have yet to invest in mitigation in a way that
responds to the seriousness of the threat and why the politics of climate change appear
so intractable.
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II ‐ GIVING THE FUTURE A CHANCE TO PAY
If the incentives for passing on the costs of climate change to future generations are very
strong, one response is to try to identify ways of passing on these costs in a way that
best serves the interests of future generations. This is the core idea behind debt
financing of climate change mitigation. Let us assume for now that we can pass on the
costs of mitigation to the future in a way that does produce an improvement for these
future agents compared to business as usual. Our terms of negotiation with the future
are only possible because we are in a position of domination over them. We are free to
ignore the fact that continuing to pollute the atmosphere will undermine the climatic
conditions for human wellbeing far into the future. Thus, it appears to be disingenuous
to claim that we are somehow helping the future by letting them pay for mitigation
when it is our actions that are putting them in danger in the first place. This assessment
has strong normative force, but there are also strong strategic and normative arguments
for borrowing from the future.
To the extent that we expect political inertia to continue or worsen, identifying a no‐cost
option that could bring about immediate and significant mitigation investment while at
the same time improving conditions for all the relevant agents leads to a very good
outcome compared to perpetual delay (Broome, 2012, 43‐48). However, this
improvement on the status quo is hardly a second‐best option. Finding ways to bring the
interests of present people and future people into better alignment or finding ways to
better mobilise the concern for future people current generations already have appear
to be much more normatively attractive options. Thus we have good reason to be critical
of failures to engage seriously in efforts to spread more climate friendly preferences or
to make the long‐term consequences of public policy more salient in political discourse.
At the same time, if climate change is the most difficult cooperative challenge humanity
has ever faced this difficulty must make some difference to our moral assessments of
current failures to act and of strategies to address these failures.
The development of highly productive economies driven by the exploitation of cheap
and abundant energy has been one of the main drivers of the amazing improvements in
human welfare over the past two centuries. Individuals, companies, and governments
both have had and continue to have good reasons for using fossil fuels. At the same time,
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finding ways to transition to low‐carbon economies is straining the capacity of our
economic and political institutions. Investing in the interests of the present has
traditionally and continues to pass on enormous benefits to future people. At the same
time, when it becomes clear that investing in shared goods today can undermine human
welfare far off into the future it also becomes clear that we are straining the ability of
our systems of morality to continually improve on the human condition.
The point is not to deny that it is deeply problematic that we are failing to dedicate a
small fraction of current wealth to protecting the conditions for human welfare for
generations to come. However, we must also acknowledge that climate change is a
system level problem similar to other system level problems in capitalist economies that
are not intended and for which it is difficult to assign moral responsibility. From this
perspective, taking on long‐term debt to finance low‐carbon infrastructure for the future
is in part a moral failure but also in part a system level response to a system level
problem, similar to the way in which deficit spending to redress the effects of boom‐bust
cycles is a system level response to the vulnerabilities capitalist economies generate.
We really do find ourselves in conditions of political delay with no sense of how or when
these patterns might be broken. As a result, there is a strategic and normative case for at
least some significant borrowing from the future. In fact the proposal raises the
following question, if we can solve the largest environmental threat to human welfare
without anybody having to give up anything then why don’t we? Is it plausible to think
that it is because we have simply failed to notice the options available to us? In the
following section I explain how borrowing from the future to finance climate mitigation
is technically possible. However, in section IV I argue that it is not surprising that we
have not yet used debt financing to pay for mitigation. This is because the borrowing
from the future proposal does not adequately address how costly it would be to
compensate the current generation to the no‐sacrifice level.
III ‐ WHAT DOES THE FUTURE HAVE TO BARGAIN WITH?
If we only have access to resources in the present how can we direct these resources
towards mitigation without this being perceived as a cost today? To achieve this the
basic idea is that we can 1) change the composition of the savings we make for the future
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and 2) change the composition of the consumption bundles we will enjoy over our
lifetimes (Broome, 2012, 37‐48). These changes in how we save and what we consume
can, it is argued, free up resources for mitigation investments but at the same time
involve no net cost. To see how this is expected to work we can first look at changes in
the way we save.
Each generation passes on savings to the next generation by leaving natural resources
and by investing in things like infrastructure, technology, and knowledge that pass on
productive capacity to future generations. However, because the true social costs of GHG
intensive consumption and investment choices are not internalised it is argued that the
current generation is actually saving for future generations in a very inefficient way. We
could save for the future in a much more efficient way by shifting some current
investment away from conventional capital and into mitigation capital, i.e. low‐carbon
energy, low‐carbon infrastructures, and efficiency. By investing the resources necessary
to avoid dangerous levels of global warming much more welfare is ‘passed on’ to future
generations in the form of avoided climate damages than would be passed on to them in
the form of conventional productive capacity. The idea is that a shift in the composition
of the current generation’s future oriented investments can leave consumption levels
constant. This brings us to the second issue, changes in the composition of our
consumption.
The aim is to bring about an intergenerationally optimal level of investment in
mitigation capital and an intergenerationally optimal shift away from GHG intensive
consumption without affecting (too much) the value of lifetime consumption bundles for
present people. In economic theory this is ideally achieved by the imposition of an
optimal cost for GHG emissions. Compensating the present for making the consumption
of GHG intensive goods more expensive can be achieved, it is argued, by consuming
more goods that are not GHG intensive. Eating meat and other animal based foods can
be compensated with eating less expensive and higher quality vegetable based foods.
Travel by car can be compensated with increased investment in public transportation.
Buying less carbon intensive consumer products and going on few overseas vacations
can be compensated by consuming more services and working less.
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Of course the substitutions noted above are all already available to us and are not
currently chosen to nearly a sufficient extent. The mitigation without sacrifice proposal
cannot simply be that current agents should change their preferences. This is not
because there are necessarily few opportunities for existing agents to change their
preferences. Instead the borrowing from the future proposal aims to show that even if
we depart from the pessimistic premises that i) existing agents are only willing to make
modest sacrifices for the future and ii) that we can only expect existing agents to alter
their preferences marginally, it is still possible to compensate these agents for investing
in avoiding future climate damage. As a consequence, the argument has to be that there
is some increase in alternative consumption patterns that the current generation prefers
more than or at least as strongly as its current emissions intensive economy.
If we impose an intergenerationally optimal carbon tax the costs of consuming
emissions intensive goods are increased and the returns on emissions intensive
investments are decreased. The results are reductions in lifetime consumption as a
direct response to cost increases and reductions in consumption as consequence of
reductions in the rate of economic growth over existing agents’ lifetimes compared to a
business as usual (BAU) investment scenario. We can in part compensate for these
losses by redistributing emissions taxes back to citizens and in part by taking on
national debt (Foley, 2009). The aim of this borrowing is to give the current generation
enough of an alternative lifetime consumption bundle to make it worth its while to
accept the effects of the carbon tax. To illustrate how this debt financing is expected to
amount to borrowing from the future we can set up this borrowing via a pay‐as‐you go
pension system.
Let us say that in the current pension system workers pay for retirees’ pensions by
transferring 5% of their earnings (i.e. productivity) into the scheme. Workers are
motivated to make such transfers because they expect their children to pay for their
pensions when they themselves retire. This allows workers to spread out their
consumption between their productive and non‐productive years and to save in a way
that gives them access to some of the gains of economic growth in the economy. This
same reasoning will hold for the worker’s children and so on. This system of saving is a
form of indirect reciprocity where the working generation confers a benefit on the
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retired generation in exchange for a future benefit from the young generation. This
system of reciprocity does not rely on altruism, does not have a determinate endpoint,
and users expect it to reach far out into the future (Heath, 2013). To borrow from the
future workers are asked to dedicate an additional 1% of their productivity to
investment in mitigation capital. As compensation the workers’ children will increase
the size of the transfers they make to retirees when they themselves become workers.
Our children will in turn be compensated when they retire by their children. When the
benefits of avoided climate change begin to arrive workers can begin to reduce the
amount of compensation they give to retirees.
Retirees are now being compensated for their payments into the pension system both in
the form of transfers from workers and in the form of avoided climate damages.
Subsequent cohorts of workers should also expect to receive less than they paid into the
pension system. These decreases in the size of the transfers made from workers to
retirees can continue until the point at which a cohort of workers secures a net benefit
over its lifetime from any investments they make in mitigation capital. This is the point
in time when there is no longer a problem of motivating these types of investments. In
theory, there can be a stopping point for transferring the costs of mitigation to future
generations despite the fact that the benefits of mitigation can be expected to extend
very far into the future.4 This looks like a clear method for taking on debt to finance
investment in mitigation and effectively transferring the costs into the future.
IV ‐ THE DIFFICULTIES OF COMPENSATING THE PRESENT
Changing the way we save for future generations only appears to be able to solve the
problem of motivating the current generation in the straightforward way described
above if current savings actually aim at passing on wealth to future generations.
However, to a large extent the intergenerational savings effect of investments in the
conventional capital stock appears to be a by‐product rather than the aim of these
investments. Savers save to distribute their consumption over both the productive and
unproductive years of their lives, to secure some of the gains of economic growth, and to
pass on some wealth to their immediate descendants. Borrowers borrow to make
productive investments that will bring them returns that are more valuable than the
cost of borrowing. When the government borrows to invest in things like infrastructure,
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education, and healthcare the timeframes for returns are longer than for private
investors. Still, if the government borrows to build a hospital, a university, or new roads
the main aims are to use these goods now and to produce economic growth that will be
beneficial in some way to taxpayers and their children.
The claim is not of course that the present’s investments are in no way aimed towards
the interests of future people. Those who engage in basic research may in part do so
because it represents a good career for them. Individuals and society may invest in such
research because it is valued for its own sake. However, if there were no prospect of this
research doing some good in the future we would surely invest much less. This is
especially true for areas such as cancer research, but also appears to be a general feature
of our interests in the future (Scheffler, 2013, p. 24). A real concern for the future must
play some part in explaining why we sometimes invest in infrastructure designed to last
for many generations. Taking resources away from things like cancer research or
designing hundred year bridges and re‐directing them towards mitigation may in fact be
a more effective way of investing in the future. However, the large majority of
investments in capital aim at benefiting the present even though they also often benefit
the future as a bi‐product. Thus, asking the current generation to shift its investments in
conventional capital towards mitigation capital is for the most part not a cost‐free way
for the present to produce better returns far off into the future. Rather, a motivationally
challenged present needs to be compensated for not making the investments they
currently make for more self‐interested reasons.
If we go back to our pension scheme, it should now be clear that if current workers
dedicate and extra 1% of their productivity to mitigation receiving an extra 1% of our
children’s productivity is not enough to compensate us in a sacrifice free way. From the
perspective of current workers and their children the value of their lifetime
consumption bundles is greater in the BAU scenario compared to a scenario in which
investments are shifted from conventional capital to mitigation capital. Resources are
directed away from the types of consumption and investments that produce the best
economic outcomes over the period that is relevant for current workers. When current
workers become pensioners they need to be compensated for the effect this decrease in
the rate of growth will have on the size of transfers into the pension system compared to
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BAU. This means that our children will have to dedicate a larger percentage of their
productivity into to the pay‐as‐you‐go pension system than we did. This is only the first
way in which reaching the no‐sacrifice level is more difficult than it may at first seem.
Think of an economy that consists of a smoker and a room filled with asthmatics. The
smoker internalises the benefits of smoking and externalises the costs. The asthmatics’
lives are made almost unbearable by the suffering the second‐hand smoke causes them.
These social costs of smoking are much greater than the personal benefits the smoker
enjoys. Let us suppose that the smoker is not moved by the plight of the asthmatics and
that the only available option to eliminate the negative externality in this economy is for
the asthmatics to compensate the smoker for quitting. He must be compensated to an
extent that at least matches the benefits he enjoys from smoking. If the smoker quits
smoking the asthmatics will become amazingly ‘welfare rich’ compared to current
conditions. However, this does not free up resources that can be used to compensate the
smoker. The asthmatics become rich in the form of avoided asthma attacks. By
assumption the value of this form of wealth is extremely low from the perspective of the
smoker. If the asthmatics are poor in other types of goods while the smoker has a very
strong preference for smoking, a transfer to compensate the smoker for quitting will not
be possible.
For a social planner trying to maximize welfare it is clear that that permitting smoking
in this economy is very inefficient. However, this is not how economists conceive of the
way a negative externality can create inefficiency in a market that can be eliminated by a
transfer that leaves no party worse off. Instead we have to see the value of smoking in
terms of the smoker’s willingness to be compensated for not smoking. In other words,
the social benefit of smoking a cigarette is determined by how much we would have to
pay the smoker so that he would be at least indifferent between the options of smoking
the cigarette or taking the payment. The social cost of smoking is a function of the
asthmatics willingness to pay to prevent smoking. When some agents’ willingness to pay
to avoid a negative externality is greater than the amount necessary to pay some other
agents to refrain from creating this externality there is inefficiency in the market. A
transfer from the negative externality takers to the externality producers generates a
more efficient market outcome (Kelleher 2015, 71‐73). In the smoking case I have
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described we can assume that the asthmatics’ willingness to pay is greater than the
smoker’s willingness to be compensated. However, the point to notice is that even if we
have a large negative externality that is massively inefficient with respect to welfare
outcomes it can also be true that there is no possible transfer between agents that could
diminish the externality while each agent remains, at the very least, on their Pareto
indifference curve. The extent to which an externality reducing transfer will be possible
is dependent on the pollutees having access to goods that are candidates for transfer
because they satisfy the polluters’ willingness to be compensated.
Once we focus on the question of what the present appears to be willing to be
compensated with to stop consuming GHG intensive goods it becomes clearer how large
this alternative bundle of resources may have to be. What is at issue is the core of the
current generation’s consumption preferences and productive capacity. For example,
effective climate mitigation may require moving largely to a vegetarian diet. The
resources necessary to make such a transition are negative. Production of plant‐based
foods requires fewer resources than the production of meat. Small reductions in meat
consumption are surely easy to compensate, but if we are aiming to compensate without
having to wait for people to change their preferences (which is what the borrowing from
the future proposal aims for) at some point the marginal willingness to be compensated
for not being able to eat meat will become very low. Likewise, it may only take an annual
investment of 1% of gross world product to mitigate climate change. However, getting to
the no‐sacrifice level may require a very large bundle of alternative resources to
compensate the current generation for not being able to exploit emission intensive
goods they have strong demonstrated preferences for.
The upshot is that in addition to compensating for differences in economic growth
compared to BAU our children will also have to dedicate even more of their productive
capacity to the pay‐as‐you‐go pension scheme to make it worth the present’s while to
change the composition of its consumption bundles. Also note that the system calls for
us to shift more of our consumption from our productive years to our non‐productive
years than we would normally choose to do. This is an opportunity cost and has to be
compensated by more consumption in our non‐productive years than we forwent in our
productive years. This is a third additional cost that results in still greater shares of our
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children’s productivity going into the pension system. Our children’s children will in
their turn have to dedicate even larger portions of their productivity to their parents
than they did for us.
The point is not to suggest that it is more expensive than we think to mitigate climate
change. Nor is the concern that there must necessarily be a very low elasticity of
demand for GHG intensive goods that will make GHG emissions prices less effective than
expected. The point is that even if emissions taxes effectively bring about desired shifts
in consumption and investments it looks like it is more expensive than we think to
compensate the current generation to the extent that they do not view these taxes as
generating important sacrifices. It looks more difficult than expected to solve the
problem of motivating agents to adopt effective carbon taxes in the first place. This is
important because of limits to the amount of debt financing countries can engage in.
The typical story about limits to deficit spending is that the more debt a country has the
more tax revenue they have to dedicate to servicing the debt, which raises the risk of
default, which raises the interests rates at which governments can borrow, which in turn
increases the revenue necessary to service the debt, which eventually makes further
borrowing too costly. Given limits to how much debt governments can take on, whatever
the mechanisms, it seems to follow that a generation that is unwilling to take on
significant sacrifices to mitigate climate change is also going to have a strong preference
for using debt financing for the sake of more present oriented goods rather than more
future oriented goods. In other words, there is an opportunity cost here that looks like it
is very difficult to compensate. Given that the present needs to be compensated for
shifting its investment patterns, changing its consumption bundles, changing its
consumption timing, and for the opportunity cost of dedicating scarce access to debt
financing to future oriented investments it should no longer be surprising that the
current generation does not use debt financing to a substantial extent to invest in
climate change mitigation. This is especially true given the magnitude of mitigation
investments needed in comparison to existing deficit levels.
Net government deficits for the OECD countries in 2013 were 2.1 trillion US $.5 In order
to get onto a 2°C trajectory the International Energy Agency is calling for investment in
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addition to those needed simply to meet future energy demand of on average 1 trillion
US $ per year to 2035 (International Energy Agency, 2014: 44). Rogelj et al. (2013)
estimate that an immediate global price on GHG emissions of US$40 tCO2e, rising there
after, would give us a 66% chance of keeping warming to 2°C. Global GHG emissions in
2011 were over 43 000 MtCO2e.6 This gives us over 1.7 trillion US$ in new costs. The co‐
benefits from such mitigation investments may be very large over the longer‐term, while
cost estimates may also be overly optimistic due to assumptions of full global
cooperation and perfect policy implementation. There is obviously a lot of uncertainty
about costs, but what is clear is that meeting these costs through debt financing involves
extremely large shifts in how resources are being used compared to current patterns.
V ‐ EXPLOITING TYRANNY OVER THE FUTURE FOR THE GOOD
The combination of limits to the ability of governments to take on debt, incentives to use
debt for present oriented goods, preferences for GHG intensive goods over alternative
packages of goods, and a system of investment in capital that largely aims at producing
returns over the nearer term should make us question how big of a role borrowing from
the future can play in addressing motivational obstacles to investing in mitigation
capital. If this assessment is plausible we are back where we started. We see strong
incentives for delaying mitigation investments and as a result it may be strategically
important to identify ways of shifting the costs of mitigation to avoid dangerous levels of
global warming.
In one sense ‘passing the buck’ to the future has been a key strategy in climate politics
for several decades. The 1997 Kyoto Protocol is regularly derided as having had far too
weak commitments, covering far too little of global emissions, and as having been
ineffective in brining about emissions reductions that would not have occurred for other
reasons. However, it is also widely understood that the protocol was weakly demanding
in order to secure broad international participation and to make it possible to set up the
institutional mechanisms for carbon trading and other flexibility mechanisms. The aim
was to extend the regime in subsequent commitment periods with deeper reduction
targets and more effective institutional mechanisms. This did not occur as envisioned,
but the push within the UNFCCC process for more ambitious emissions commitments
and expanded coverage continues. In the EU Emissions Trading System’s (ETS) initial
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trading period between 2005‐2007 the market was characterised by weak emissions
targets, an over‐allocation of free emissions allowances, and significant national
flexibility in meeting targets (Parker, 2011). Increased ambition and harmonisation of
rules across EU member states, especially for the third trading period 2013‐2020, has
followed. However “temporary exemptions, compensations and procrastination of
decisions” still create delays between decisions and the arrival of costs with these delays
designed to help secure agreement (Muller & Slominski, 2013: 1437). For example, the
full shift in the third trading period to auctioning of emission credits will not be in place
until 2027, while sectors deemed to be exposed to significant carbon leakage will have
access to free allowances and the possibility of compensation.7
Creating temporal space between when policy makers adopt at decision and when the
costs arrive, working with shorter‐term flexibility and longer‐term pre‐commitments,
and setting in motion path dependencies are all highlighted in the political science
literature as important strategies for dealing with so‐called ‘super wicked’ cooperation
problems (e.g. Lazurus, 2009, Ismer & Neuhoff, 2009, Levin et al., 2012, Urpelainen,
2012, Brunner et al., 2012, Jordan & Matt, 2014). To the extent that these types of
policies involve weak initial demands they do not respond to the urgency of the
environmental threat. This is regularly and rightly criticised, but it should also be clear
that such policies are often genuine strategic responses to real political obstacles. The
borrowing from the future proposal aims to offer a better strategy than incrementalism
by shifting costs to the future while at the same time eliminating procrastination. I have
raised doubts that this approach is a powerful tool for mediating the politics of delay.
The structure of the problem suggests that we need to identify ways to set in motion
serious mitigation efforts but at the same time not require large changes in behaviour
right now.
For example, those in political power now could commit the young to significant
investments in mitigation. Designing these commitments so that they create a future
financial liability for failures to make promised investments would exploit future
decision makers’ commitments to property rights regimes and the global financial
system. Potential financial liabilities for failing to invest in mitigation would be a means
to entrench mitigation commitments imposed by present governments onto future
15
governments.8 The only proposal along these lines I have been able to identify is the idea
of governments issuing index‐linked policy performance bonds where interest
payments on the bonds are linked to GHG emission targets or financing targets for low‐
carbon energy. If the government fails to meet its mitigation targets there is a penalty in
the form of higher interest rates to be paid to bond holders (Ekins et al., 2014, 168‐170).
However, governments have to already be committed to increasing the resources
dedicated to cutting GHG emissions to pre‐commit themselves in this way. What I am
imagining is a policy that largely pre‐commits future governments and thus places some
temporal space between when the pre‐commitment is made and when governments
have to start making the mitigation investments. I have not been able to identify
thinking in the economics literature that would specifically meet the criteria outlined
above. As a result I am only able to briefly suggest a type of proposal that attempts to
enforce commitments made today on future governments by creating a financial liability
today that will materialise tomorrow if governments fail to mitigate.
The aim of the pre‐commitment proposal suggested above is to reduce the level of
bootstrapping involved in the more incrementalist approaches we currently have while
at the same time taking seriously the possibility that governments will continue to be
very wary about binding themselves to strong financial commitments over the short‐
term. The type of proposal under consideration is clearly flawed in that it does not
respond quickly enough to the environmental threat. Thus, it should be understood
chiefly as an insurance policy against the risk of an intergenerational pattern of
perpetual delay.9 Because I cannot provide a design for the strategy proposed above,
this chapter is limited to assessing the normative case for this more explicit form of pre‐
committing the future. The purpose of such an assessment is to give some normative
permission to think about new creative ways of pre‐committing future publics that can
better mediate the wickedness of time in the Anthropocene.
If our parents had committed us to financial liabilities for failing to invest in mitigation
could we plausibly argue that we did not deserve this type of treatment? The more
unjustifiable it appears to be for us to simply fail to mitigate climate change and the
longer we delay serious action, the less plausible it is to question that it would have been
justifiable for past generations to bind us to mitigation investments. If we deserve
16
paternalistic treatment for our unwillingness and political incapacity to make
meaningful investments in mitigation then so may our children. We have good reason to
expect the next generation to do better than us from a moral perspective in various
respects, but it is far from obvious that we should expect so much change that they will
not also have very strong incentives to discount the interests of the future. Thus, the
claim is not that the ways and extent to which people are motivated by moral
considerations cannot change, but only that the incentives to discount the far future look
particularly hard to change and that we should have some insurance against this
problem.
When current publics try to pre‐commit future publics the most common normative
objection is that this is a form of political domination over the future by the present. This
concern is usually raised against the constitutional entrenchment of some substantive
public policy by the current majority with the aim of limiting the ability of future
majorities to make public policy in this same area. If the present is able to
democratically determine what the right substantive policy is without such obstacles
why should the future be denied this same democratic power? Given reasonable
disagreement about politics it is problematic for the current public to paternalistically
safeguard future publics from following their own majoritarian will. On what grounds do
current majorities think they have better access to answers about the policies that ought
to be adopted than future majorities (Waldron, 1999, 255‐282)? However the type of
pre‐commitment I am proposing is not an effort to protect the future against itself.
Instead, pre‐committing our children to mitigation investments is an effort to protect
the further future from the near future. What we do is not to democratically adopt some
measure for ourselves that we then think should be maintained in perpetuity. Rather we
fail to adopt some measure that we think ought to be put into practice for the sake of
future generations and instead pass on that commitment to the publics that will follow
us. Surprisingly then, the combination of an unwillingness and inability to adopt just
legislation with respect to the interests of future generations that we are currently
witnessing appears to significantly improve the justifiability of present majorities
paternalistically pre‐committing future majorities.
17
The most serious objection to the idea that we should bind our children to mitigation
costs is that it is a form of moral corruption. As Stephen Gardiner puts it,
if the current generation favors buck‐passing, but does not want to face up to
what it is doing, it is likely to welcome any rationale that appears to justify its
behavior. Hence, it may be attracted to weak or deceptive arguments that
appear to license buck‐passing, and so give them less scrutiny than it ought.
It is the claim that the obstacles to political action are particularly severe in the case of
climate change that makes buck‐passing in a safer way seem reasonable. How this claim
is deployed in our moral evaluations is what warrants more scrutiny.
Given the enormous amount of wealth and technological capability we currently enjoy it
is not plausible to be sceptical about the prospects for action due to a sheer lack of
capacity. Rather, it is a lack of the right kinds of motivations that prevents us from
bringing the climate threat under effective political control. Binding our children to the
costs of mitigation is presented as a way for us to live up to our obligations to protect
the interests of future generations, albeit a very imperfect response. However, to make
this move the present’s moral failure to act is actually conceived of as an external
condition that existing agents must take into account as we decide how to protect the
interests of the future. It looks like I have perverted our blatant discounting of future
interests into a moral justification for passing on the costs of mitigation! What can be
said in response to this charge?
It is clearly moral suspicious to appeal to current political obstacles to justify cost
shifting to the future. There is an incentive to exaggerate the obstacles one is complicit
in creating because this provides moral cover for doing little now to address the
problem. At the same time, it is also problematic to conceive of the present as a singular
agent that can simply decide not to exploit some other agent, the future. Prohibitions on
exploiting others agents are a basic feature of our normative theories and social
institutions, and the message is that we need simply not to do what we normally expect
agents not to do to each other. Yet, a generation is not a singular agent or any agent at
all. Instead, what is required is to coordinate the actions of individuals, companies,
communities, and governments all over the world. What we need to coordinate around
is not some ubiquitous feature of common sense morality but something new. Agents
must let the effects of their present actions on conditions far into the future outweigh
18
their interests in securing goods here and now. We may have always depended on the
idea of future generations to give meaning to our projects (Scheffler, 2013), but we have
not had to face the prospect of stark conflicts between many of our own unextraordinary
projects and welfare in the distant future. If we look at the conditions in which agents
have tended to be successful in protecting common pool resources it is clear that in the
case of climate change these conditions are not satisfied (see Dietz et al., 2003). Climate
change is the most difficult cooperative challenge humanity has faced to date and as a
result it is reasonable to think in terms of second and third best options without being
accused of blatant moral corruption.
In response to long‐term threats like climate change political theorists often argue for
institutional reforms that will eliminate the tyranny of the present over the future. The
most common proposals are to have the interests of the future represented in some way
in the democratic process or to constitutionally entrench respect for the interests of
future generations. Instead of trying to address symptoms of the tyranny of the present
over the future it would be better, it is argued, to address the institutional sources of this
injustice. However, it remains highly uncertain if institutional reforms of this type will
go far enough fast enough to bring about effective mitigation policies. The argument of
this section is that because we may have a limited window of opportunity to deal with
the problem of weak incentives to invest in mitigation we should also consider
strategies that attempt to exploit the present’s tyranny over the future for the good.
The argument above has defended the paternalism of binding the future to mitigation
costs. However, once a case for paternalism is made it is appropriate to ask if other
forms of paternalism are preferable. For example, one could imagine more or less
paternalistic government policies that attempt to change present people’s preferences
so that they are more in line with the interests of future generations. The argument
advanced here clearly does not demonstrate which policy responses are all things
considered the best ones. Much depends on how pessimistic we think we should be
about current political conditions. The type of proposal I have advanced is thought of as
an insurance strategy against the risk of perpetual political inertia.
19
CONCLUSION
There is already some debt financing of mitigation investments and debt financing
would surely be a large part of extensive government efforts to mitigate climate change.
There is also a good strategic and normative case for passing on the costs of mitigation
investments to the future. If the present has strong incentives to pass on the costs of
climate change to the future we should at least try to identify ways of passing on those
costs in ways that best protect the interests of future generations. However, I have
argued that the option to debt finance mitigation does not really resolve the basic
problem of motivating agents to change their consumption and investment behaviours.
This raises the question of whether or not there are other ways to pass on the costs of
climate change in a ‘safer’ way. Strategic buck‐passing and efforts to pre‐commit future
publics to increasingly demanding mitigation efforts are also already a key part of
climate governance. I have suggested that we should consider more explicit pre‐
commitment strategies that bind the young today to large investments in mitigation
over their productive lifetimes. If we are failing to overcome the tyranny of the present
over the future then we should consider how we might exploit that tyranny for the good.
My argument is not a moral endorsement of the present’s domination over the future
and it is not in conflict with the typical institutional reforms political theorists advance
to reduce the present’s discounting of future interests. Yet, given the severity of the
political challenges we currently face and the severity of the consequences of global
warming we should also be open to the possibility that we may need stronger measures
to prevent a scenario in which we perpetually put off investing in climate security for
the future.
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1 I would like to thank Catriona McKinnon for in‐depth comments that helped me greatly
improve this chapter. Earlier versions of this chapter were presented during 2014 at the
ECPR Joint Sessions, the Nordic Political Science Association Conference, The Academy
of Finland’s Centre of Excellence in the Philosophy of the Social Sciences, and at the
Global and Regional Governance and Political Theory research seminars at the
Department of Political Science at Stockholm University. I would like to thank
participants at these events for their comments, in particular Matthew Rendall, Dominic
Roser, Blake Francis, John Broome, Robert Huseby, Jonas Tallberg, Magnus Reitberg,
Säde Hormio, Kian Mintz‐Woo, Simo Kyllönen, Jonathan Kuyper, Ludvig Beckman, and
Göran Duus‐Otterström. I would also like to thank Alan Mehlenbacher, David von Below,
and Nick Rowe for answering some basic questions about the notion of borrowing from
the future.
2 I remain agnostic on the question of what a fair distribution of mitigation costs
between generations would be.
3 This conclusion appears to be true even where agents are narrowly altruistic in the
sense of having strong preferences for securing high consumption levels for their
children (Asheim, 2013).
4 There is a question of whether or not the one could plan to reduce pay‐outs to retirees
without undermining the pension scheme. Workers facing the prospect that they will
put more into the pension system that they get out cannot be excluded from the avoided
climate damages that are supposed to make up for this difference. As such they have an
incentive to decrease their inputs into the system to what they can expect to get out of it.
This in turn gives cohorts prior to them incentives to pre‐emptively decrease their
inputs into the system. This dynamic could undermine the credibility of the scheme.
Perpetually rolling over the debt could be a better way to ensure the credibility of the
scheme. Normatively assessing such a strategy would be dependent on a theory of
distributive justice between generations.
5 By country GDP figures were taken from OECD (2014), "Gross domestic product in US
dollars", Economics: Key Tables from OECD, No. 5. DOI: 10.1787/gdp‐cusd‐table‐2014‐5‐
en. By country deficit figures were taken from OECD (2014), "Government deficit /
surplus as a percentage of GDP", Economics: Key Tables from OECD, No. 20.
DOI: 10.1787/gov‐dfct‐table‐2014‐1‐en. The calculation excludes Chile, Mexico and
Turkey.
6 WRI, CAIT 2.0. 2014. Climate Analysis Indicators Tool: WRI’s Climate Data Explorer.
Washington, DC: World Resources Institute. Available at: http://cait2.wri.org. Accessed
October 1, 2014.
7 See http://ec.europa.eu/clima/policies/ets/cap/auctioning/index_en.htm .
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8 Ideally, the future holders of the corresponding financial entitlements would be those
in poorer countries most vulnerable to the effects of climate change. These entitlements
could thus serve as some level of compensation for failures to mitigate. However, one
would also want agents holding rights to payment for ‘failure to perform’ to be in a
strong position to defend these entitlements.
9 Rendall (2011) also argues that borrowing from the future should be seen as an
insurance policy against a pattern of political inertia.
23
