In stark terms, Francis argued that humanity is facing an environmental crisis in the form of global climate change, scarcity of water, and decline in biodiversity. He links what he calls this “ecological crisis” to global capitalism and the throw-away culture of greed that it produces.
Certainly, many on the American left would agree with the Pope’s analysis, but there was one part of the text that rankled economists, even those who have long advocated for a concerted effort to combat climate change. Not only does the pope condemn modern capitalism as the cause of climate change. He also argues that market-based solutions to the problem will only exacerbate our reliance on an economic order that has caused major problems:
The strategy of buying and selling “carbon credits” can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors.
This passage has been interpreted as an attack on cap and trade programs, in which the government would price carbon emissions to account for the damage they do to the environment. Firms would then buy and sell the right to emit carbon on a market. This is seen as the most efficient way to combat climate change because it would direct the ability to emit carbon to the enterprises that would create the most value to society by doing so.
“I respect what the pope says about the need for action, but this is out of step with the thinking and the work of informed policy analysts around the world, who recognize that we can do more, faster, and better with the use of market-based policy instruments — carbon taxes and/or cap-and-trade systems,” Robert N. Stavins, the director of the environmental economics program at Harvard, told The New York Times. He argues that the approach the Pope favors is that put forward by a “small set of socialist Latin American countries that are opposed to the world economic order, fearful of free markets, and have been utterly dismissive and uncooperative in the international climate negotiations.”
But what exactly the Pope wants to do about climate change isn’t really clear from the encyclical. He condemns market based-solutions without a clear outline of what should replace them. Yale economist William Nordhaus recently lamented this as a “missed opportunity,” but also argues that it might not matter:
Perhaps no one will attend to Pope Francis’s attack on trade in permits and implicitly on carbon pricing. Perhaps his endorsement of climate science and the reality of warming and environmental damage will be effective in turning the tide toward strong actions.
And for liberal Americans who hope the Pope can change some minds on climate change, this might be the attitude worth adopting. The Pope, after all, isn’t a policy maker. And his constituency is far larger than just wealthy America. He also must appeal to people in places where free-market capitalism has been less effective at bringing prosperity than places like the U.S. It isn’t likely that if the Pope does encourage U.S. Catholics to get serious about climate change, that they’ll quibble over just how to attack the problem.