Q&A: Tom Tietenberg

Some people might think that economics and environmentalism don’t mix. Not Tom Tietenberg. In fact, he’s a leading expert on emissions trading, which allows companies to buy and sell emissions credits. Rose Long ’10 talked with him about that, about Colby’s greenness, and about writing his own textbook.

You are totally into environmentalism. How did you develop an interest in this?
I was never really an activist, but then, during the course of my graduate studies in economics, I read a book by a guy by the name of Allen Kneese. He was arguing that economics could be extremely helpful in improving environmental policy and improving the environment specifically, and I thought, ‘Gee, I really agree with that.’ So I became absolutely fascinated and did my dissertation on the use of economics for environmental protection—including something at that time which was unheard of, which was called emissions trading.

What is that?
Emissions trading is an evolution of environmental policy. The traditional policy was to tell firms that they could emit only x amount [of particular pollutants]. It was hard to define in any sort of appropriate way what x should be for each firm, because the firms differ so much. So what the new system does is set a goal for all the firms in the area, called a cap, and then it allocates a proportion of that cap to each of the firms, telling them how much they can emit, and allows them to [buy and sell credits] among themselves.

So what is your role in all this?
Well, I started writing about this in 1971, and the system didn’t exist at all. I did my dissertation on it and published some articles. It sounded like this was much better environmental quality at a lower cost, and in about 1975 the government started to do it. ... After that I was the principal investigator for a study that the United Nations did—all of the background work that set up all of the carbon trading in the Kyoto Protocol. Then after that I was hired by the OECD [Organisation for Economic Co-operation and Development], which is in Paris, to lead a workshop on how to evaluate these programs after they’ve been running for a while.

How do you have time to do that?
Well, basically you have January, you have the summer, and then you try to arrange it so that not much of the work takes place during much of the semester. You always work all weekends.

So you researched it and became a leader in the field?
Well, I researched it conceptually. That is to say that dissertations in economics are very mathematical and so on. So that was very much developing the incentive systems: that is, how does it work, what are the preconditions, and so on. And all of that was developed in dissertation. That was five years prior to anybody really doing anything about it. Five years later they started doing something about it and I had nothing to do with that, to make that clear. I just happened to be at the right place at the right time.

In your opinion, how green is Colby?
Colby has made enormous strides. I think we started five or six years ago. And, as someone who has been part of the process that whole time, it’s been very gratifying to me to see how far the institution has come as far as its commitments—and it has made huge commitments. ... So, in the one sense I think the process is working well and Colby has really been making enormous strides. Does this mean that there is no [room for] improvement? No. Any school can become greener than it is, and Colby is no exception. I think we do very well compared to our competitors.

As far as the EAG [Environmental Advisory Group], what do you do in that?
Well, first let me describe for you what it is, because it is sort of unique. And I must admit—I do a lot of consulting for other schools ... they want to know how they can be more effective, and I think the Colby model is actually a very effective model. It [the EAG] is actually a twelve-person committee set up by the president to advise the president. The reason it is a really neat organizational device is, first of all, there is nobody between us and the president. So there’s no barrier to getting things done.

I heard you wrote the book you use in your class. When did you write it?
The first version was 1985. It’s now in its seventh edition, revised every two or three years. And you have to go through the whole book and revise it and update it.

By yourself?
Well, I have research-assistant Colby students help me do it. A whole series of Colby students have helped me do it by finding new data and putting it together and helping me research case studies that are included and things like that.

What was the basis of the book?
My class. I had basically taught the class for over ten years and had these notes. This publisher came to me and said, ‘Would you consider writing a textbook based on your course?’ and I said, ‘Sure.’ So I did.

Why did the publisher approach you?
Probably because of my other publications. And because I was teaching at a very good liberal arts school.

Many people think that the U.S. isn’t very environmentally friendly. What is your opinion on that?
I think the people are. The government isn’t. There is an awful lot of environmental support in the country. I think in general, this particular administration doesn’t share that view. On things like climate change, I think frankly we’re behind now. I think that is likely to change. I think Congress will take action on climate change within the next few years.

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