Climate Change

Parsing the Benefits of Climate Change

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Global Warming
Image 191: Dreamstime

Over at the Spectator, Rational Optimist Matt Ridley has a fascinating article, "Why Climate Change is Good for the World," that looks at data regarding both the costs and benefits man-made global warming. He finds that the benefits outweigh the costs for most of this century before turning negative. From the article:

There are many likely effects of climate change: positive and negative, economic and ecological, humanitarian and financial. And if you aggregate them all, the overall effect is positive today — and likely to stay positive until around 2080. That was the conclusion of Professor Richard Tol of Sussex University after he reviewed 14 different studies of the effects of future climate trends.

To be precise, Prof Tol calculated that climate change would be beneficial up to 2.2?C of warming from 2009 (when he wrote his paper). This means approximately 3?C from pre-industrial levels, since about 0.8?C of warming has happened in the last 150 years. The latest estimates of climate sensitivity suggest that such temperatures may not be reached till the end of the century — if at all. The Intergovernmental Panel on Climate Change, whose reports define the consensis, is sticking to older assumptions, however, which would mean net benefits till about 2080. Either way, it's a long way off.

Now Prof Tol has a new paper, published as a chapter in a new book, called How Much have Global Problems Cost the World?, which is edited by Bjorn Lomborg, director of the Copenhagen Consensus Centre, and was reviewed by a group of leading economists. In this paper he casts his gaze backwards to the last century. He concludes that climate change did indeed raise human and planetary welfare during the 20th century.

You can choose not to believe the studies Prof Tol has collated. Or you can say the net benefit is small (which it is), you can argue that the benefits have accrued more to rich countries than poor countries (which is true) or you can emphasise that after 2080 climate change would probably do net harm to the world (which may also be true). You can even say you do not trust the models involved (though they have proved more reliable than the temperature models). But what you cannot do is deny that this is the current consensus. If you wish to accept the consensus on temperature models, then you should accept the consensus on economic benefit.

Overall, Prof Tol finds that climate change in the past century improved human welfare. By how much? He calculates by 1.4 per cent of global economic output, rising to 1.5 per cent by 2025. For some people, this means the difference between survival and starvation.

It will still be 1.2 per cent around 2050 and will not turn negative until around 2080. In short, my children will be very old before global warming stops benefiting the world. Note that if the world continues to grow at 3 per cent a year, then the average person will be about nine times as rich in 2080 as she is today. So low-lying Bangladesh will be able to afford the same kind of flood defences that the Dutch have today.

The Tol chapter is not freely available online, but its conclusions evidently mirror those of a 2013 meta-analysis of several integrated assessment models (climate and econometric) published as a working paper. From Tol's analysis:

There are two striking results. First, the impact of climate change does not significantly deviate from zero for warming up to 2.5-3.5°C (unless monotonicity is imposed). On the one hand, this is a sobering verdict on the state of the knowledge. On the other hand, the official position that 2.0 °C is dangerous is not well supported. The second striking result is that none of the frequently used impa ct functions fit very well to the pattern of the primary estimates. This is doubly sobering. Not only is the empirical evidence thin, the models used are not consistent with the evidence. Decisions should be made, however, on the best available knowledge – even if it is not very good. The results show that, while modest warming is not a matter of great concern, more pronounced warming is.

In a 2010 Proceedings of the National Academy of Sciences article, Yale economist William Nordhaus reported, assuming that humanity does nothing to cut greenhouse gas emissions, that his RICE-2010 integrated assessment model finds that climate change damages:

To give an idea of the estimated damages in the uncontrolled (baseline) case, those damages in 2095 are $12 trillion, or 2.8% of global output, for a global temperature increase of 3.4 °C above 1900 levels.

Nordhaus' estimate evidently assumes that the world's economy would grow at about 2.5 percent annually reaching a total GDP of roughly $450 trillion in 2095.

On the other hand, in their New York Times op/ed, "Inconvenient Uncertainties," earlier this month, economists Gernot Wagner from the Environmental Defense Fund, and Martin Weitzman from Harvard University estimate that there is a 5 to 10 percent chance that global average temperatures could eventually exceed 6 degrees Celsius (10.8 degrees Fahrenheit). Based on this catastrophic possibility, they argue:

The scientific method imposes some order, but in the case of climate change, that order is probabilistic. For the sake of science and the planet, we should not become distracted by a false sense of certitude. Imprecise truths are the most inconvenient ones. We know enough to act now. What we don't know should prompt us to even more decisive action.

By decisive action, Wagner and Weitzman favor a carbon tax that would raise the price of fossil fuels and thus encourage the development of new low-carbon energy sources.

For a critique of Weitzman's work on low-probability high-consequence climate change, see my column, "Wagging the 'Fat Tail' of Climate Catastrophe."

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  1. Matt Ridley shows himself up as a denier of science of AGW and does the usual trick of selective cherry-picking. Tol [who likes to set himself as genuine sceptic as he accepts AGW]

    Um.

  2. I, for one, look forward to my beachfront property in mid- Michigan. Before another glacier comes through. Of course, I should be long dead by then…

    1. You just wait Mr. Smartass, until Tony gets here and sets your sorry ass straight. In 5…4…3…2…

  3. “man-made global warming”

    Proofs needed.

  4. “If you wish to accept the consensus on temperature models, then you should accept the consensus on economic benefit.”

    Ulcerative colitis is a disease for non-smokers and ex-smokers. Smoking cigarettes is something of a cure for ulcerative colitis!

    http://pmj.bmj.com/content/76/895/273.full

    Problem is, you go around advocating smoking as a cure for UC, and you’re gonna be laughed at–and you should be. ’cause over the long term, smoking causes lung cancer, among other things. …and, in the long run, you’d much rather have colitis than lung cancer.

    If people go around touting the benefits of global warming, saying that we don’t have to worry about it because of all the benefits, then they’re gonna be doing a huge favor for those progressives who would love to use global warming as a pretext to put even more of our economy under government control.

    1. Sorry, but I don’t see the analogy. In the smoking case, you can actively point to an offsetting harm from the “cure”. In the AGW case, I fail to see the offsetting factor.

      1. Even if you’re just assuming that global warming is real for the sake of argument, within in the context of that argument, you can’t argue that there are benefits to global warming and then turn around and say that AGW just doesn’t exist in regards to the harm it does.

    2. It’s more like finding out that eating more salt is actually good for you.

      1. It isn’t like that at all.

        According to the scenario above, eating more salt is going to kill us, and we’re going to start dying in 2080.

        1. IF present trends continue. Which is not at all a given.

          1. “Present trends” haven’t been continuing since 1998.

        2. “According to the scenario above, eating more salt is going to kill us, and we’re going to start dying in 2080.”

          Actually no, according to the above scenario 2080 is the point where we see net negative impact, we don’t start “dying” until sometime well past that point. Furthermore the 2080 date is based on the 95% likely to be over exaggerated estimates of climate sensitivity used by the IPCC. The best fit for actual measured sensitivity would push it out to somewhere around 2150 before we see net harm from global warming and somewhere past 2200 before “we start dying”.

          In otherwords we are as close to the founding of America as we are to the time when we start “dying” and there is no realistic reason to believe that we would not have invented a better power source than burning fossil fuels and developed sophisticated carbon capturing technologies to clean up the atmosphere long before we hit that point.

    3. You know that active UC increases your chance of getting colon cancer by something like 5% a year. Having a roommate with uncontrolled UC, I’m pretty sure he’d have taken the 1% chance of developing lung cancer over the binary choice of having his fucking colon removed or having colorectal cancer in the next two decades. I can call him and ask him if you want.

      1. The thing is, you can do other things to control your UC–usually. You can get away from your trigger foods. You can take medication to control it. When things go out of control, you can take steroids, which have some nasty side effects…

        But none of those side effects are as bad as lung cancer, etc. If you get colon cancer from UC, they can take out a section of your colon. Hell, they can take out your whole colon if they have to–and you can live with a colon fashioned from your small intestine or a colostomy bag just fine!

        They can’t take your lungs out though. You can’t live without your lungs. Smoking cigarettes as a long term cure for UC is stupid.

        Global Warming as a long term strategy for economic growth is stupid, too–even if it has benefits in the short term.

        1. Who says that the net benefits will only be in the short term? Faster economic growth means more investment in research and development, which makes it more likely that we will develop the technologies necessary to fight global warming if it actually becomes a problem. Seen vs. unseen.

  5. “The latest estimates of climate sensitivity suggest that such temperatures may not be reached till the end of the century ? if at all.”

    That’s a mighty big freaking “IF”.

    1. But we MUST act now through the mis-allocation of resources. The hundreds of billions of dollars we are already throwing into the volcano can only appease Gaea for so long. She must have more! Much, much more.

      1. I vote we toss in all of these AGW wankers. Gaia was always appeased with human sacrifice in the past and they should be more than willing to die for her since that means they will be reducing their carbon footprint.

  6. “They’re gonna be doing a huge favor for those progressives who would love to use global warming as a pretext to put even more of our economy under government control.”

    In other words..

    We have some excellent arguments for not putting more of the economy under government control, and if those arguments don’t involve us going around touting the benefits of smoking global warming, then I think we should try to emphasize those arguments.

    Just think about it from a marketing perspective. On the one hand, you’ve got people who are trying to save the world from massive destruction. On the other hand, you’ve got people saying that the destructive path we’re on is net beneficial for the time being…

    I’d just like to ask everybody to try to remember that which way policy goes on this may depend on how average people perceive us on these things. At best, it looks like we’re whistling past the graveyard. At worst, we look like denialists.

    How many people after reading this, do you think, are going to go around saying that global warming is net beneficial–without qualification?

    1. The estimates of climate sensitivity are wildly exaggerated. Even the alarmists know it, which is why they’re starting to slowly tune back the dial on them. Ridley/Tol/whomever is using those exaggerated figures to come up with the 2080 number, but when the real numbers are settled on, I bet we really won’t have anything to worry about for 150 years.

      As far as the realpolitik, nobody cares about anything behond 10 years or so. That’s why they’re pushing so hard to get their goodies now. Same reason nobody cares about reforming entitlements.

  7. assuming that humanity does nothing to cut greenhouse gas emissions…climate change damages… is utterly retarded seeing as how America itself has reduced it’s carbon emissions to something like 1992 levels. So humanity has already been cutting emissions.

    Also,

    On the other hand, in their New York Times op/ed, “Inconvenient Uncertainties,” earlier this month, economists Gernot Wagner from the Environmental Defense Fund, and Martin Weitzman from Harvard University estimate that there is a 5 to 10 percent chance that global average temperatures could eventually exceed 6 degrees Celsius (10.8 degrees Fahrenheit). Based on this catastrophic possibility, they argue:

    The scientific method imposes some order, but in the case of climate change, that order is probabilistic. For the sake of science and the planet, we should not become distracted by a false sense of certitude. Imprecise truths are the most inconvenient ones. We know enough to act now. What we don’t know should prompt us to even more decisive action.

    So let me get this straight: There’s been no meaningful increase in the last 15 years. There’s a 5 to 10% chance it might increase by 6degrees. And the scientific method is too fucking hard to satisfy, so we should just hand as much control as possible to the governments of the world? And we are the ones being accused of not having an “adult conversation” and denying reality?

  8. Since people are free to move to somewhere else, this study is misguided, since it apparently assumes people will stay in the place they live now, doing the things they do now.

    If the world was to warm by 5 degrees F, the climate in SF would match the climate in LA now. The climate in Dallas would match the climate in Austin now. All the currently just barely uninhabitable places in Canada would become habitable.

    Basically, people could compensate for a large amount of warming by simply driving north (or south if you live in the southern hemisphere) for about 4 hours, and vast stretches of currently unuseable land would become useable.

    1. Look at a globe. The area around the equator is mostly water, except for Africa. Towards the poles, though, are massive stretches of currently uninhabitable land — all of Antartica, about half of North America, a huge chunk of Asia.

      The net effect of warming would be losing a bit of land for human use as the Sahara expands, and gaining a much larger swath of land for human use in the Northern hemisphere.

      1. Exactly. If humans had the technology to set the world’s temperature like a thermostat, then without question we’d choose to warm it up.

  9. The followup to the Ridley’s argument is that since warming is not going to be catastrophic for quite a long time, if ever, we can slow down and come up with better solutions. The current ones like subsidizing expensive, unreliable energy sources and the cronyism that goes with it was sold by inducing climate change panic. In economic terms, adaption looks like a more reasonable idea if warming is not catastrophic and the non-CAGW crowd can show how badly the current political policies have performed.

    1. Good point. The typical “major reductions by the end of the decade” panic rhetoric is based around the presumption that new carbon-intensive investments today — e.g., a new coal-fired power plant — won’t be depreciated away for 50 years.

      But if today’s investments are actually beneficial for most of those fifty years, and on net turn bad only 20 years later, then we have 20 years to figure out something better to do than build coal-fired power plants — without massive harm to today’s freedom and wealth.

  10. Good, LC Bennett! Also assuming smaller population growth (IF govts stop rewarding single-mothers for having babies) and technological innovations, climate change may not matter a-tall!
    Most innovations come from solving a current dilemma,as it arises.

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