Arnold Kling  

Climate Change

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The latest analysis is known as the Stern report. From chapter one, on climate science:


Climate models use the laws of nature to simulate the radiative balance and flows of energy and materials. These models are vastly different from those generally used in economic analyses, which rely predominantly on curve fitting. Climate models cover multiple dimensions, from temperature at different heights in the atmosphere, to wind speeds and snow cover. Also, climate models are tested for their ability to reproduce past climate variations across several dimensions, and to simulate aspects of present climate that they have not been specifically tuned to fit.

I think that few economists would concede that we "rely predominantly on curve fitting."

The accuracy of climate predictions is limited by computing power. This, for example, restricts the scale of detail of models, meaning that small-scale processes must be included through highly simplified calculations. It is important to continue the active research and development of more powerful climate models to reduce the remaining uncertainties in climate projections.

I seriously doubt that computing power is the binding constraint in climate modeling. My guess is that you could raise the computing power by a factor of 10 without increasing the reliability of the models. My guess is that the binding constraints are lack of data and the large number of unknown processes.

Several studies have estimated climate sensitivity by benchmarking climate models against the observed warming trend of the 20th century

In other words, curve fitting.

The distributions share the characteristic of a long tail that stretches up to high temperatures. This is primarily because of uncertainty over clouds and the cooling effect of aerosols. For example, if cloud properties are sensitive to climate change, they could create an important addition feedback. Similarly, if the cooling effect of aerosols is large it will have offset a substantial part of past warming due to greenhouse gases, making high climate sensitivity compatible with the observed warming.

In other words, our understanding is limited by more than just mere computing power.

The main conclusion of the report:


Using the results from formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more.

In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year.


One percent of global GDP is a lot--close to one trillion dollars. My guess is that if you think outside the box, you can eliminate global warming for a lot less money. Suppose you told scientists and engineers to come up with a way to monkey around with chemicals and stuff to reduce global average temperature. My guess is that the total cost of that approach, including research and implementation, would be only a few billion bucks, give or take.

Fighting man-made climate change with more man-made climate change almost has to be more cost-effective than fighting man-made climate change by trying to de-industrialize. But it would not satisfy the religious and political longings that are at the heart of the global warming crusade.


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TRACKBACKS (2 to date)
TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/590
The author at Three Sources in a related article titled Global Warming writes:
    Arnold Kling provides a brurtal fisking of Her Majesty’s Treasury's Stern Review on the Economics of Climate Change. The post is funny, but Josh@ The Everyday Economist (inline hat-tip) and I like the close. Responding to the assertion that ignoring... [Tracked on October 30, 2006 7:36 PM]
The author at Acton Institute PowerBlog in a related article titled An Economist's Report on Climate Change writes:
    In a report commissioned by the UK government, Sir Nicholas Stern, a former chief economist of the World Bank, argues that the cost of waiting to take action to curb CO2 emissions will outpace other economic arguments against action on climate change. [Tracked on October 30, 2006 9:08 PM]
COMMENTS (24 to date)
Brad Hutchings writes:

We need to consider the benefits of global warming too. For example, if more of the Western US had a climate like SoCal, there would be fewer people coming here for the climate. That could save the state a ton of money on infrastructure over the next 50 years as we try to keep pace with a statewide population that is currently expected to grow to 50 million.

I think however, that the prudent reaction to the Stern report is to figure out what an acceptable cumulative drop in worldwide GDP would be. For example, 20% would be a shock, but spread over 4 years, might be a reasonable hedge against global warming just being scientific hysteria. If we have four years where hot weather clobbers our economies, then we can decide to do something. Anyone pushing that platform?

dan writes:
We need to consider the benefits of global warming too. For example, if more of the Western US had a climate like SoCal, there would be fewer people coming here for the climate.

I am sincerly hoping this was a joke. The obvious ramifications are much deeper, and more serious.

I would like to know what Arnold Kling is basing this "let scientists use their magic wands" approach to fixing this problem. As an engineer, this seems like a very poor understanding of the limits of scientists and engineers.

"de-industrialize"? I think many or most of the proposed solutions can hardly be considered de-industrialization

Randy writes:

Dan,

Many do consider the "benefits" of global warming to be some kind of "joke", but I really don't see why. Two of the largest nations on earth, Canada and Russia would almost certainly benefit from a few extra degrees, as would much of the north central United States. And higher water levels could turn much of the Sahara back into the savannah that it once was. Assuming that the warming occurs gradually over several decades, allowing populations to adapt, I see no reason to believe that the effects would be entirely, or even mostly, detrimental.

Dan writes:

Randy,

A few degrees of added warmth for Russia and Canada itself would be fairly unnoticeable. I mean, how much does 4 or 5 degrees effect you on a day to day basis. I was always under the impression that the potential side effects by throwing off the existing "global balance" naturally or not would be much more significant regarding the outbreak of disease, potential for releasing frozen toxins, rapid shifts in weather patterns. Humans unfortunately are limited to fairly a slow evolution, and we as a whole tend not to do so hot regarding rapid enviromental shifts.

On the other hand, maybe some type of population control is exactly what we need...

Randy writes:

Dan,

Perhaps. But it seems to me that the global warming fans want to have it both ways - e.g., "It'll be a disaster in Miami but Minneapolis won't feel any different". Having spent a couple of winters in Minneapolis, I can say that 4 or 5 extra degrees would be quite welcome - even if it meant that property values would decline in Florida. Would it mean an increase in disease? Perhaps. But Minnesota already has mosquitos the size of small birds. Who knows, a bit warmer climate might actually dry up a few of their breeding grounds.

Its just that there seem to be a great many variables that the alarmists haven't considered. They are focusing on the negatives and discounting the positives. It makes them hard to take seriously.

Brad Hutchings writes:

Dan, it's no more a joke than Tony Blaire seizing the opportunity presented by the Stern Report to suggest that there might have to be a significant global tax to stop global warming.

Scientists and engineers pretty much lost their political credibility to speak on global catastrophe questions in the last century. If they say we're all gonna die because of some particular thing that can be cured by limiting our freedoms the way they want to limit them, I say, let's wait until some appreciable percentage die, and then we can deal with the problem knowing they were correct rather than trusting that their motives are pure and facts consistent with reality. The excerpts Kling and others have provided on the web today have a certain tone to them: "We're smarter than you, so listen to us." Call it a Type-A (for annoying) argument.

Dan writes:
I say, let's wait until some appreciable percentage die, and then we can deal with the problem knowing they were correct rather than trusting that their motives are pure and facts consistent with reality

My girlfriend happens to be a meteorologist, and has studied global warming extensively (compared to me anyways). Her main opinions on the subject, which seemed fairly consistantly accepted among her peers are:
1) It would be imposible to link man-made activities to global warming until far after the resultant effect, if ever.
2) Catastrophic effects, would in her best estimation be irreversible well before a point the causes could be reversed. Her feeling is that, every option currently available to us, would be insignificant in reducing the effect. The mechanisms present in the system carry much to much momentum to simply reverse with foreseeable technologies.

As I see it, it comes down to a gamble, in which one must evaluate the investment against the potential effects/consequences. This becomes difficult however when scientists start trying to play economists and economists start trying to play scientists.

I personally like to think of global warming as most likely an "invisible hand" force of the ecosystem. But this is irrelevant and unsupported obviously.

dan writes:

Also, in the non existant chance that a cause/effect relation between some type of human activity and global warming could be cemented, how would a global free market remedy this, something that would be in the interest of everybody eventually, but nobody immediately? Especially if the cost would exceed what could reasonably be generated through charitable givings? I have often seen this as a potential limit of the free market and look forward to responses.

Bruce G Charlton writes:

A tough, but real, question: warmer or cooler?

The one thing that humans certainly cannot do is prevent climate _change_. Complex things like climate, ecosystems and human brains always change.

Climate is either getting warmer or colder, by some amount or another.

How about this for a thought experiment: If we could choose, and we can't keep climate the same - then which change would we prefer: the world getting warmer or getting cooler?

bill shoe writes:

Another gripe about the Stern report--

It appears to come up with many (most?) of its global warming costs from deaths and other problems in poor areas that are less able to cope with warming. I think an inability to cope is a symptom, and poverty via bad government is the problem.

The report assumes that prosperous areas of the world have an obligation to maintain a global climate that accomodates horrible governments in poor areas of the world.

This might be a plausible argument on humanitarian grounds, but I wish the huge underlying assumption was acknowledged in the report. I don't think they found space to do that.

Mr. Econotarian writes:

I'm very thrilled that this report came out, because it will get people thinking in the cost/benefit mode when it comes to climate change.

On the other hand, I suspect the report has a lot of shortcomings, or else the economists involved in the Copenhagen Consensus might have scored avoiding climate change higher.

My first thoughts on the report is that perhaps you lose 20% of GDP because of climate change, but we are probably already losing 20% of GDP because of dumb government economic policies.

If governments are too stupid to make even the simple fixes to help their economy grow, how can we really expect them to join a world-wide carbon tax, where the pressure to cheat and the pressure for corruption is significant?

That said, there really is nothing but politics keeping the modern western economies from going nearly 100% nuclear-electric, even for transport. But of course it is the developing economies that will become the major carbon producers in that case, and their people significantly outnumber the people in the modern western economies.

I don't see a world-wide "War on Carbon" as winnable, short of some kind of global terror dictatorship. I sense mitigation is the only possible answer.

At some point, people are going to have to come to terms with the very basic truth that the world does not revolve around us.

Whatever happens, we need to adapt. I believe we will. And as far as trying to adapt now, I will invoke the prime directive of software development:

"Premature optimisation is the root of all evil."

Dezakin writes:

This is dumb. Emission mitigation is as easy as a moratorium on coal power plants in favor of nuclear. Coal electric power is at the very least 50% of global emissions, and nuclear power often competes on cost, and in many cases is cheaper.

Dr. T writes:

Another clueless pseudoexpert. I looked through the most recent report from an international climate group. They encorporated data from 24 climate models. Almost none of the models came reasonably close to predicting actual climate, so the group aggregated the models. This meta-model gave the best fit to predicting actual climate. The climate group bragged that in most areas of the world the predicted mean temperatures were within 2 degrees centigrade of actual mean temperatures. However, the meta-model performed abysmally in the Artic and Antarctic areas, overestimating mean temperatures by 6 degrees centrigrade. Since the main disaster scenarios of global warming involve polar ice melting and sea levels rising, the fact that the models overestimate polar temperature by a huge 6 degrees centigrade tells you how reliable global warming predictions are: not reliable at all.

Overlooked in all the global warming hoopla are the economic benefits of a warmer climate (if we ever get it): less fuel and electricity use in winters, longer growing seasons with higher crop yields, less need for heavy winter clothes, less use of salt on no longer icy roads, etc.

aaron writes:

I suspect that all the doomsday scenerios neglect the fact that we and nature both adapt.

Ronnie Horesh writes:

I agree with the post: get scientists and others to focus on what we actually want to achieve: reduced climate instability, rather than on cutting back anthropogenic greeenhouse gas emissions, which may or may not do anything to help. Better still, inject market incentives into the whole process of stabilising the climate. It can be done.

Don Robertson writes:

Hepatoscopy, reading the future from livers, mainly from sheep, is an empirical science that has come and gone, but which lasted thousands of years. No doubt some Russian and Chinese scientists still explore this phenomenon with the hope of a breakthrough.

Phrenology is an empirical science that measures human intelligence from brain case capacity and shape, though it too is now mostly relegated to the study of archeaological-anthropology, I think because it's not quite so politically incorrect to simply assert our human anscestors were dummies.

I propose to create a new empirical science called phrenological-heptoscopy with which I can endeavor to determine from a measure of brain case capacity and shape, correlated directly to what we can read in the livers of our subjects, and thereby viola! we arrive at a human intelligence quantum function quotient that will predict not only our future, but the future of the planet and the cosmic forces that conspire to destroy us all, from which it may be more modestly determined that it doesn't matter the statistical model you use, it's just the idea of enchanting our young and impressionable students enough so that they start to think about whatever pops into their mind at the time, which is mostly the act that becomes the catalyst of procreation, in college-aged students.

I like all the empirical sciences, but, I also worry about the implications that some human being is going to think he understands the weather well enough that at some point someone in government might decide to try and affect and regulate it.

That's what the Libertarians are really thinking here.

Some government SOB with high aspirations might actually jump all over this model of human misunderstanding and pass some foolish laws that will of course be flouted and ignored, which will indeed precipitate an economic climate crisis of colossal media proportions for the economists who try so hard at what it is that they do so well, whatever that is.

Robertson's rule. No matter the solution to no matter the problem, if it's an empirical solution, the negative biproducts of that solution will outweigh the initial problem tenfold.

It's of no use to trust in the Lord, he's counting on mercury poisoning and a dumbed down educational system to limit the human-caused global warming problem.

I'm noticing a lot of young kids these days reverting back to walking on all fours... Is it just me? Or are these kids really growing thicker knuckle pads?

Now there's an up and coming empirical science for investigation, some empirical trial and error, and a field just waiting for a few bright young students to help it mature into a well documented and scientifically tested full-blown misunderstanding.

Don Robertson, The American Philosopher
Limestone, Maine

An Illustrated Philosophy Primer for Young Readers
Precious Life - Empirical Knowledge
The Grand Unifying Theory & The Theory of Time
http://www.geocities.com/donaldwrobertson/index.html
Art Auctions:
http://www.artbyus.com/auctions.php?a=6&b=4807

RogerM writes:

Dr. T:"Almost none of the models came reasonably close to predicting actual climate..." Can you point me to the web site of the group you visited? I have searched long and hard for evidence that climate modelers have validated their models against historical temperatures. The most extensive validation I found was from the late 1980's and the models failed miserably. Then, in 2004, a group decided to try again, but instead of predicting temperatures, as you would expect, they decided to validate the models against several obscure weather phenomena. I haven't been able to find any evidence of real validation of any computer models of the climate.

Barkley Rosser writes:

bill shoe,

Ah, blame the victim arguments, my my.

No, the biggest single victim of global warming (some would gain, like Canada and Russia), would be Bangladesh. Why? Because the whole country is flat and very low lying, plus has one of the densest populations in the world, plus it is very poor, although growing in real per capita income. They are geographically enormously vulnearable to any increase in ocean level, irrespective of the quality of their government.

Now, I suppose one could say, "that they are poor shows they have had lousy governments' (including presumably the British colonialists).
However, they do have a semi-functioning democracy, if a lot of problems. Theirs is not an obviously seriously badly run country for an overpopulated Third World one, and their economy is picking up, with such things as the recent Nobel Peace Prize winning Grameen Bank started there a sign of that they are trying hard.

The median forecasts are that Bangladesh would take a 20% hit to its GDP in the next century if nothing is done, although I agree that the climate models do need better theory and data and are not limited just by computing capacity.

Matt writes:

"..then which change would we prefer: the world getting warmer or getting cooler?"

Colder. I would prefer, for energy balance, to keep the temperature right at the mean value for the typical glacial cycle, a couple of degrees cooler than we have now.

Who is hurt the most from warming?
Equatorial nations. They get hotter faster than the energy can be transported north.

Actually, we can actually set the temperature where we want by controlling greenhouse gases.

Dr. T writes:

Dear RogerM:

The report I read was a draft of the Fourth Assessment Report (AR4) by the Intergovernmental Panel on Climate Change (IPCC). Their web site is http://www.ipcc.ch/ Unfortunately, the draft is no longer available for viewing. The full report will be released in October 2007.

If you want to read a good critique of the human-induced global warming movements, go here:
http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2006/04/09/do0907.xml&sSheet=/news/2006/04/09/ixworld.html

Michael Sullivan writes:

One percent of global GDP is a lot--close to one trillion dollars. My guess is that if you think outside the box, you can eliminate global warming for a lot less money. Suppose you told scientists and engineers to come up with a way to monkey around with chemicals and stuff to reduce global average temperature. My guess is that the total cost of that approach, including research and implementation, would be only a few billion bucks, give or take.

This is too facile. Anyone can pull numbers out of thin air. Do you have any evidence for that guess? AFAICT, nobody has any idea what it might take to do this. There are some possible avenues of research, but I don't think it's remotely clear whether they are feasible, and if so, exactly what the costs would be in various carbon scenarios.

Where I probably stand with you is that I think puttting energy and money into figuring that out is just as, if not more, important than adopting low and no-cost strategies to reduce greenhouse gas emissions, and that it doesn't make sense to simply reduce greenhouse gases at any cost.

But 1% of GDP, while it is huge, is not so horrible even if it turned out to be the cheapest way to avert a global catastrophe. It certainly doesn't represent "de-industrialization". In the rich world, I think we could offset the whole bit with smarter (and less) regulation and freer trade across the board. I know, it's still a cost, I'm just saying that big as it is, it doesn't send us back to 1900 or anything, let alone 1750. It wouldn't even hold our growth to zero.

So personally, I find the Stern report encouraging. Even given only current technology, the problem is intrinsically solvable at a cost we could afford to pay.

rmark writes:

Junkscience.com may still have the chart showing how the predictions from various climate models have changed over the years.

Monte writes:

Matt,

"Actually, we can actually set the temperature where we want by controlling greenhouse gases."

How do we reconcile this claim with http://www.junkscience.com/Greenhouse/ assertion that earth's atmosphere "does not primarily behave like an actual greenhouse."? Having read through this article, my sense of urgency has suddenly waned. Sell me.

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