by Judith Curry
Politically correct climate change orthodoxy has completely destroyed our ability to think rationally about the environment. – Richard Tol
Richard Tol as an essay at The American Interest entitled Hot Stuff, Cold Logic. This is probably the most sensible overview on climate policy that I’ve encountered. I encourage you to read the entire article, here are some excerpts:
Change, after all, can be for the better or the worse, and at any rate it is inevitable; there has never been a lengthy period of climate stasis.
Just as there is no logical or scientific basis for thinking that climate change is new, there is no self-evident reason to assume that the climate of the past is “better” than the climate of the future.
Others argue that the impacts of climate change are largely unknown but may be catastrophic. The precautionary principle thus enjoins that we should work hard, if not do our utmost, to avoid even the slim possibility of catastrophe. This logic works fine for one-sided risks. Climate policy is about balancing risks, and there are risks to climate policies as well as risks caused by climate change. So there is a cost to human well-being in constraining fossil fuel use.
What this means is that, instead of assuming the worst, we should study the impacts of climate change and seek to balance them against the negative effects of climate policy. It is especially important to maintain an objective attitude toward the tradeoff between possible dangers and the costs of policy, because estimating the impacts of climate change has proven to be remarkably hard.
Besides, the faint signal of past climate change is drowned out by all the other things that have changed. Many things are changing, often much faster than the climate, and in ways that confound all unifactoral explanations potentially relevant to policy.
Studies, assessed by the Intergovernmental Panel on Climate Change in its latest report, that have used such methods find that the initial, net impacts of climate change are small (about 1 percent of income) and may even be positive.
In the long run, however, negative impacts may surge ahead of positive ones. The long-run impacts are what matter most for policy. The climate responds only slowly to changes in emissions, and emissions respond only slowly to changes in policy. The climate of the next few decades is therefore largely beyond our control. It is only in the longer term that our choices affect climate change, and by then its impacts are likely to be negative on net. This implies that climate change is an economic problem, and that if economics could be rid of politics, greenhouse gas emissions should be taxed.
The question is therefore not whether there is an economic case for climate policy; it’s how much emission reduction can be justified at given losses to social welfare. To answer that question, we need to understand the size of the impacts of climate change. The current evidence, weak and incomplete as it may be, as summarized by the Intergovernmental Panel on Climate Change, suggests that a century worth of climate change is about as bad as losing a year of economic growth.
But even if we take this into account [worst case scenario], a century of climate change is not worse than losing a decade of growth. So if, as Bjørn Lomborg has been at pains to point out, we “spend” the equivalent of a decade of growth or more trying to mitigate climate change, we will not have spent wisely.
Climate change is a problem, but at least as an economics problem, it is certainly not the biggest problem humankind faces.
The best course of action is to slowly but surely move away from fossil fuels. Many disagree with this plan of action, of course, calling for a rapid retirement of fossil fuel use. Economically, their justification rests on assuming that we should care more about the future than we do in contexts other than climate change, that we should care more about small risks than we do, or that we should care more about poor people than we do.
If our resources were unlimited, we could do all things worthwhile. With a limited budget, we should focus on those investments with the greatest return.
These three examples—of coastal protection, agriculture, and malaria—show that development and vulnerability to climate change are closely intertwined. Slowing economic growth to reduce climate change may therefore do more harm than good. Concentrating the reduction of greenhouse gas emissions in rich countries will not solve the climate problem. And slower growth in rich countries means less export from and investment in poor countries.
A fifth of official development aid is now diverted to climate policy. Money that used to be spent on strengthening the rule of law, better education for girls, and improved health care, for instance, is now used to plug methane leaks and destroy hydrofluorocarbons.
In sum, while climate change is a problem that must be tackled, we should not lose our sense of proportion or advocate solutions that would do more harm than good. Unfortunately, common sense is sometimes hard to find in the climate debate. Desmond Tutu recently compared climate change to apartheid. Climate experts Michael Mann and Daniel Kammen compared it to the “gathering storm” of Nazism in Europe before World War II. That sort of nonsense just gets in the way of a rational discussion about what climate policy we should pursue, and how vigorously we should pursue it.
The American Interest is one of my favorite sources for policy analysis, and I follow Walter Russell Mead on Twitter.
Richard Tol is IMO one of the most interesting thinkers on the economics of climate change.
For my previous posts on climate change policy, see the policy tag.