David R. Henderson  

Superfreakonomics on Geo-Engineering

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Back in 2009, I posted three pieces on Steven D. Levitt and Stephen J. Dubner's book Superfreakonomics. As with their first book, there were strengths and weaknesses. I highlighted them here, here, and here.

I never posted, though, on their chapter on geo-engineering, that is, using technological steps to prevent or offset global warming. I recommend the chapter. It's cleverly titled "What do Al Gore and Mount Pinatubo have in common?" Their answer: "both suggest a way to cool the planet, albeit with methods whose cost-effectiveness are a universe apart." I would add, "Both spewed hot air."

They quote Nobel prize winner Paul Crutzen, a Dutch atmospheric scientist. According to Levitt and Dubner, Crutzen stated that injecting sulfur in the atmosphere "is the only option available to rapidly reduce temperature rises and counteract other climatic effects.

There are many other nuggets, too numerous to mention here, which is why I recommend the chapter. For a numerate look at geo-engineering that covers some of the same ground, see this Econlib article by Robert Murphy, "The Benefits of Procrastination: The Economics of Geo-engineering," December 7, 2009.

One big criticism, though. In laying out what an externality is, they give the following example:

In the United States alone, more than 100,000 coal miners died on the job over the past century, with another estimated 200,000 dying later from black lung disease. Now those are externalities. (italics theirs)

On second thought, I won't give my criticism. Instead I'll post a question for readers: are those externalities? To make the case that they are, what do you need to assume? Are those assumptions correct?


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COMMENTS (18 to date)
Brian writes:

Coal miners don't get paid a wage to go into coal mines? Perhaps "coal miners" are really just innocent bystanders who happen to find themselves a half mile underground when a cave-in occurs.

Kevin writes:

It seems like we would need to assume-away the agency/decision-making ability of those coal-miners; working in a coal mine was something that happened to them, rather than a risk they willingly internalized.

GregS writes:

Steven Landsburg pointed to the same passage about coal miners at his blog, probably with the same criticism you're thinking of. I believe he even suggested that such an egregious error shouldn't have made it past the editors.

They aren't externalities, because the costs are predictable and are imposed/borne by people who are party to the transaction.

Jason writes:

We also have to assume that the miners were not compensated for taking the risk.

MikeP writes:

I think those who think agency or compensation makes something not an externality are not being strict enough.

Slaves suffered various costs that did not affect free labor. Are those costs therefore externalities?

No. They are completely internal to a transaction. That one party is not a willing party to the transaction doesn't make the cost an externality. It simply makes in a poorly compensated internality.

Garrett M. Petersen writes:

In order for those to be externalities, the coal miners would have to have been exposed to coal dust when they were not working. If they were exposed as a consequence of working for the coal company, the possibility of getting the black lung would be internal to their labour transaction with their employers, but if the coal dust wafted through the windows of their homes while they slept, it would truly be an externality. This makes an additional assumption that if they didn't work in a coal mine, they would still live close to it, since otherwise the coal dust reaching their houses would still be internal to their labour decision.

Seems pretty implausible.

Andrew writes:

It seems plausible to argue that the early deaths were externalities, as black lung disease wasn't widely understood until the 1950s. It is unlikely that coal miners received a compensating differential for something that people didn't know existed.

Steve Reilly writes:

Are unintended consequences somehow impossible in geo-engineering? It seems unlikely that laws mandating bike helmets could cause problems, but pumping lots of SO2 in the atmosphere will go exactly as planned.

Alexandre Padilla writes:

Is it possible that their assumption is that costs of retrieving the dead bodies or health care costs of treating black lung disease is born (at least in part) by the society? Is it possible to also believe that these costs (death or black lung disease) are considered as external costs because they are born by family members?

I am not sure it's a correct assumption or a correct interpretation.

NoGodsOrKings writes:

"Now those are externalities."

No, those are costs. I'm always glad to see authors go out of their way to clearly establish that the reader should stop taking what they have to say seriously.

Mark Bahner writes:
For a numerate look at geo-engineering that covers some of the same ground, see this Econlib article by Robert Murphy, "The Benefits of Procrastination: The Economics of Geo-engineering," December 7, 2009.

Yes, I maintain that even if people in the year 2100 are as poor as the IPCC predicts--and I think that the IPCC underpredicts by a factor of 100 or more--then it still will be a piece of cake for them to remove CO2 from the atmosphere to get back the the pre-industrial concentration of about 300 ppm.

Global warming is not "irreversible"

Mark Bahner writes:
For a numerate look at geo-engineering that covers some of the same ground, see this Econlib article by Robert Murphy, "The Benefits of Procrastination: The Economics of Geo-engineering," December 7, 2009.

Yes, I maintain that even if people in the year 2100 are as poor as the IPCC predicts--and I think that the IPCC underpredicts by a factor of 100 or more--then it still will be a piece of cake for them to remove CO2 from the atmosphere to get back to the pre-industrial concentration of about 300 ppm.

Global warming is not "irreversible"

Ken B writes:

No. If office workers in Toronto got black lung from dust wafting up from Virginia, that would be an externality. Miners know of the dangers and make that part of their reserve price.

A trickier example is my heartburn when my son's school showed Al Gore's movie.

Hazel Meade writes:

This is off topic but ...

In the United States alone, more than 100,000 coal miners died on the job over the past century, with another estimated 200,000 dying later from black lung disease.

Objectively, that is far worse than the expected death-toll of even a worse-case nuclear accident. And that is in the event it actually happens. The expected rate of deaths and injuries for nuclear is lower than any other power source once you take into account the low probability of such events.

IIRC someone estimated that the net death toll from Fukushima (which is about as bad as it can get - three simultaneous reactor meltdowns) will be around 200 excess cancer deaths over the next 40 years. And much of the economic cost in terms of lost land use is unnecessary considering the likely number of excess cancers.

The point of this is that all the fear of nuclear is just frankly statistically illiterate.

David R. Henderson writes:

@Hazel Meade,
The expected rate of deaths and injuries for nuclear is lower than any other power source once you take into account the low probability of such events.
Hazel, Well said.
I remember one day walking into work at the White House and running into one of my bosses, Bill Niskanen. I was the energy economist at the Council of Economic Advisers at the time. Somehow Bill and I got talking about nuclear. Bill said that the debate over nuclear was strange and then said why: "Nuclear power is the safest, cleanest, and most expensive energy around." (This was before wind and solar were much discussed.) I'm not sure about the most-expensive, by the way. To what extent is this expense imposed by government because of the very statistical illiteracy that you refer to?

August writes:

I happen to believe rapid cooling of this nature is far more dangerous than the supposed global warming. Warming tends to mean more growth, longer growing seasons, etc...
We could see releases of cooling gasses thanks to fracking, and subsequently see the downsides of this proposed geo-engineering silliness.

ThomasH writes:

Why is Al Gore's name referenced in regard to a serious discussion of whether or not anthropomorphic climate change is occurring?

David C writes:

I'm guessing a few of the deaths are externalities. If your company hires an incompetent worker and said incompetent worker gets you killed, that's probably an externality. Black Lung, on the other hand, is a fixed probability that you can estimate ahead of time and nobody else's decisions are likely to affect that.

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