Guest blog by Marlboro MBA student Kathy Hipple.

Noted environmental economist Robert Repetto spoke about the increasing risks of climate change at the Marlboro Grad School last Friday. Global emissions of greenhouse gasses increased 6% in 2010, the fastest level in decades. Such an increase indicates that atmospheric concentrations are accelerating, and many believe they are contributing to extreme weather conditions, such as Hurricane Katrina and the recent Tropical Storm Irene.

The only course of action, Repetto argued, is to reduce dependence on fossil fuels by 80-90% over the next 50 years.

Some critics argue that since America’s industrial structure depends on fossil fuels, a move away from this energy system would seriously undermine the economy. Repetto, a Harvard-educated economist, disagrees. He cited several historic examples of significant energy transitions that have taken place in the U.S. Whale oil was replaced by kerosene and gas lanterns in the mid-19^th century.  New England’s industrial development was led by mills, built on waterpower. By late 19^th century, however, industries had converted to steam power. In 1882, Thomas Edison kicked off the electric age, and by the 1930’s rural electrification had extended electricity throughout the nation. Before the automobile, New York City had over a million horses. Huge new industries were formed by each of these energy transitions.

Repetto, author of America’s Climate Problem: The Way Forward and an advisor to the Marlboro MBA, urged citizens to lobby their political representatives because he believes that individual efforts are insufficient to avert an impending crisis.

According to Repetto, the free market, through a system of cap and trade on carbon, holds the greatest promise of solving the climate change problem. Cap and trade is not new. It has been used successfully in the past, notably under the first President Bush, for the reduction of acid rain-producing emissions. Based on economic analysis, a cap and trade on carbon emissions would allow businesses to solve the problems more effectively than either a carbon tax or regulations.

A carbon tax would also reduce carbon emissions. Such a carbon tax, however, would be difficult to calculate based on a meta-analysis that Repetto conducted. This analysis suggested a five-fold variance in the amount that would be necessary to reduce emissions.  Once a tax is set, raising the amount is difficult.

Regulating carbon emissions will be less effective than either cap and trade or a carbon tax in reducing carbon emissions, argued Repetto. Regulation would take years before it went into effect, including challenges through the court system. The cost of enforcing such regulation is not trivial.

Despite the urgency of climate change, Repetto predicts that U.S. policy on greenhouse gas emissions will not change before the elections. He noted that the U.S. is responsible for most of the greenhouse gas emissions already in the atmosphere, and suggested that other countries are currently doing far more than the United States to combat climate change.

The Chinese, for example, have shut down hundreds of inefficient power plants, and have added national feed-in tariffs for renewable energy. Their automotive fuel efficiency standards are stricter than America’s. Australia has passed a carbon tax. Europe said they will commit to an additional 20% reduction in carbon emissions beyond an earlier target, and will increase to 30% if the U.S. agrees to a similar reduction.

Repetto suggested that reduction of dependence on fossil fuels by 80-90% over the next fifty years is not only possible, based on human history, but will open up huge business and investment opportunities. A new energy transition is already underway, and must be supported and accelerated. The first steps are easy, and include raising energy efficiency.

“We’ve done it before, and we are doing it again,” notes Repetto.  Last year, for example, solar power generation increased 44%. Wind power generation increased 35%. Over the past decade, revenues in solar and wind energy increased from $6.5 billion to $30 billion.