David R. Henderson  

Murphy on Geo-Engineering

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The option of geo-engineering makes it much safer to continue using fossil fuels and thereby pass on extra trillions of dollars of wealth to the next generation at possibly little or even no cost.

So writes Robert Murphy in the Featured Article on Econlib this month, "The Benefits of Procrastination: The Economics of Geo-Engineering."

Murphy compares the cost of doing nothing about global warming with the cost of Waxman-Markey and writes:

Of the estimates in the eleven studies published since the year 1995, the worst case is a global GDP loss of 1.9 percent.


For example, the Congressional Budget Office surveyed a range of studies and concluded that the cap-and-trade emissions targets in the Waxman-Markey climate bill would reduce U.S. GDP by 1.1 percent to 3.4 percent by 2050. Thus, the midpoint of this range, 2.3 percent, is higher than the worst estimate of unrestricted climate change (in any surveyed study published within the last fourteen years). In other words, the costs of Waxman-Markey exceed even the most optimistic estimates of benefits. Moreover, the damage to the economy occurs decades earlier than the full benefits of avoided climate change and the Waxman-Markey plan, even if adopted by all major governments, would not eliminate all climate damages.

But what if the cost of doing nothing turns out to be much higher than the high estimate above? That's where geo-engineering comes in. But rather than reading my repetition of his argument, read the article.

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COMMENTS (14 to date)
Sonic Charmer writes:

Isn't the supposed split between CO2 reduction/regulation/cap-n-trade on the one hand, and "geo-engineering" on the other, artificial?

Why isn't "let's we, as a society, use laws/taxes/paperwork to artificially restrict the amount of CO2 in the atmosphere with the hopes of achieved a certain climate" considered a form of "geo-engineering"? Just because it's lo-tech?

The question is not whether to use geo-engineering "or" the Al Gore solution. Al Gore is proposing a type of geo-engineering every bit as much as any other geo-engineering fan. The question is, is geo-engineering needed at all, and if so, what is the best method?

SydB writes:

Does he have any models to back up his analysis, or is he just slinging words around? Seems to me it's the latter.

Liam writes:

I really liked the article, David. It's an interesting idea.

I summed it up as, Is Geo-Engineering a fix? No. Is it a temporary fix? It can be. So let's prepare and test some of the temporary fixes and gather more data on exactly what needs to be done instead of spending all the money now and hoping in 50 years it pays off.

I have been in Sales a long time and I can tell you hope is not a strategy.

Pete writes:

A couple of thoughts...

I'd like to see the actual studies estimating that global temperature rise will actually provide us positive GDP growth. Taking into account factors such as lower crop yields, it seems clear to me that warming the globe will have substantial negative effects. I'm mostly curious if these studies assume we will flatline at 3 degrees Celsius or continue to warm - any climate model I've seen suggests temperatures will continue to accelerate once they break the 2 degree Celsius threshold.

Murphy's a-b-c scenario is clever, but misguided. He proposes "draconian emissions cuts" once things get really bad, but the only way to get draconian emissions cuts is to shut down any fossil fuel power plants along with the transportation sector. I think he is severely underestimating the cost of truly grinding the economy to a halt, something Waxman-Markey will not do. In addition, he proposes a geoengineering solution that we must hope for, because no current geoengineering techniques allow us to simply comb the atmosphere and remove carbon.

It surprises me that economists do not give more credence to the idea of unintended consequences of geoengineering. When you think of geoengineering as interfering in a spontaneously organized and self-regulating system, it sounds a lot like interfering in a free market. I would expect the idea of unintended consequences, taken from my micro principles class, to carry more weight than it does.

I'll readily admit to being a climate change sympathizer - I'm 20 and expect to live until at least 2050, if not 2080. For me, the uncertainty gives me greater reason to support a strategy of being careful, rather than simply dealing with it down the road.

H writes:

Why should I take seriously the opinions of people who don't even believe that climate change is man-made or that it is a serious problem?

David C writes:

What's most strange to me is that the studies seemed to have settled on studying 2.5 C warming when most estimates are that global warming will be higher than that. No one has studied the costs of greater than 3 C temperature increases.

Philo writes:

Murphy writes: "[C]ritics claim that geo-engineering solutions would cause international tensions. For example, Russians might balk if the United States controlled mirrors in space that could regulate how much light entire continents received, while the leaders of India would be upset if a specific geo-engineering proposal interfered with the annual monsoon." But *any* would-be solutions to worries about the global climate will occasion international tensions. There can be no avoiding international tensions, since all nations are affected and different nations have different interests. And the international decision-making process is bound to be very messy.

Dan Weber writes:

Let's say Exxon Mobil decided that it was in its interests to lower global temperature by 2 degrees, and so built the $250 million factory in some remote region without anyone's knowledge and shoved the SO2 into the air.

1. How long would it take for this to lower temperature?

2. Would people be able to figure out where this factory was quickly?

3. Once found, what happens?

Doc Merlin writes:

3. Once found, what happens?

They are fined for sulfur dioxide pollution.
Also, of course we have had warming since the seventies, we have cut back heavily on soot and SO2 production. Car exhaust has become so much cleaner, factories produce far fewer particulates, etc.

Bob Murphy writes:

SydB wrote:

Does he have any models to back up his analysis, or is he just slinging words around? Seems to me it's the latter.

Your comment intrigues me. As David quotes, I was relying on a survey of models of the economy and climate. So yes, those estimates all came from models.

And in the geo-engineering scenario where I invented numbers, I said in the actual text that I was loosely basing them on a model, and in the footnote showed you exactly where to go in Nordhaus' book to get his modeling results.

I am being quite sincere when I ask, what did you mean by the above?

Bob Murphy writes:

H wrote:

Why should I take seriously the opinions of people who don't even believe that climate change is man-made or that it is a serious problem?

H, go look at Tol's survey article if you think I'm making things up. I was very surprised myself at how low the estimates were.

It's ironic, isn't it? You're in the position of not believing the peer-reviewed models on the likely impacts of global warming. I hope you are not going to say Joe Romm has more credibility on forecasting economic impacts, than actual environmental economists.

Douglass Holmes writes:

You need to convince us that it is reasonable to believe that we can identify the rise in temperatures, the cause of the rise, the extent to which it is man-made, and what can be done about it.
Most people get pretty upset when the price of gasoline goes up significantly. Reducing CO2 emissions enough to keep the earth's temperature from rising is going to require significant reductions in our standard of living beyond increasing the price of gasoline.
Convince us that it is really required.

David C writes:

Douglas Holmes, in response to your first three questions:


You may get a little confused; just as a warning.

As for the fourth part, that takes a bit longer, but is a little less confusing. Here's one example:


One paragraph from the above describing a collective action problem:
"Even so, we are still trying to figure out which weatherization projects we should do. The whole package would probably cost $4,500 and save us something like $400 a year. We may not stay in the house nearly long enough to justify the investment."
A well devised solution to the above would boost the economy and reduce emissions.

TokyoTom writes:

Murphy may have a point about the cost of Waxman-Markey, but beyond that he is arguing at strawmen and failing to consider alternative policies, such as cap-and-dividend (or alternately using revenues to eliminare corporate and payroll taxes), enhancing efficiency/conservation by eliminating public power monopolies, eliminating subsidies for dirty coal embedded in the Clean Air Act, removing federal insurance caps and easing licensing hurdles for nuclear power.

We can do much to address climate concerns in ways that clearly enhance wealth, and carbon can be priced in ways that are progressive rather than regressive, but we never hear a peep about this from Bob. Does he not want a freer and more efficient economy?

Further, Bob totally fails to address ocean acidification (ecept to quote Gavin Schmidt to indicate it may be a problem), and it seems that Bob doesn`t really have a clue about the very long-term duration of the threat posed by emissions of CO2. Absent very extraordinary measuers, we are committing the climate to millenia of change.

GDP arguments are singularly unconvincing, not simply because damage to ecosystem assets is not counted (other than perhaps perversely as positive GDP growth as people are forced to pay money for adaption), but also because such they fail to measure RISKS, and in any case, such measurements are fundamentally incapable of measuring PREFERENCES.

Sure, we have to seriously consider geo-engineering options, because we now, for all practical purposes, have no real prospects of stopping rapid growth in CO2 levels as economic growth continues worldwide. We have painted ourselves into a corner, and continue to tighten the corner for our children. Bob fails to understand that the geo-engineering options he considers are all very limited bandaids with potential costs that are unlikely to be borne solely by those who try to implement them.

Finally, given all of the uncertainities about the costs and benefits of geo-enginnering options AND the existence of policy options other that cap-and-trade, Bob is totally unjustified in his sweeping generalizations that procrastination may be optimal. "An ounce of prevention is worth a pound of cure" comes to mind, as well as the thought that if one has trepidations about the nature of the road ahead, it makes sense to get ready, including studying geo-engineering - but it`s hardly a precaution if one, instead of taking his foot off the gas, rather slams it down on the pedal - exactly the "conservative" course that Bob actually counsels.

Let`s not ignore that the "status quo" course is actually a path of continued massive geo-engineering, via CO2, other GHGs, soot from coal fires and coal-powered plants, and continuing tropical and Siberian deforestation.

How convenient that the "conservative" course is the one that suits those who have been generating climate risks, and who are loath to surrender their "homesteading" rights over our atmosphere and central governments.

And how convenient that they pay Bob.

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