Carbon Rationing Will Hurt the Poor Worse, Argues Skeptical Environmentalist Bjorn Lomborg

In today's Washington Post, Bjorn Lomborg, who heads up the Danish think tank, the Copenhagen Consensus Center, argues that imposing steep immediate cuts on carbon dioxide emissions in an attempt to slow man-made global warming will cause far more  harm than it will do good. Why? First, the costs of carbon rationing would far outweigh the benefits. And second, such cuts could provoke a damaging "green" trade war. To get a sense of what would be involved in trying to achieve even moderate carbon dioxide reductions, Lomborg looks at the case of Japan:

Japan's commitment in June to cut greenhouse gas levels 8 percent from its 1990 levels by 2020 was scoffed at for being far too little. Yet for Japan -- which has led the world in improving energy efficiency -- to have any hope of reaching its target, it needs to build nine new nuclear power plants and increase their use by one-third, construct more than 1 million new wind-turbines, install solar panels on nearly 3 million homes, double the percentage of new homes that meet rigorous insulation standards, and increase sales of "green" vehicles from 4 percent to 50 percent of its auto purchases.

Japan's new prime minister was roundly lauded this month for promising a much stronger reduction, 25 percent, even though there is no obvious way to deliver on his promise. Expecting Japan, or any other nation, to achieve such far-fetched cuts is simply delusional.

The new international goal, agreed upon by the big economies at the G-8 meeting this summer, aims to keep the increase in the planet's average temperature under 2 degrees Celsius above what it was in pre-industrial times. What would this cost? 

Imagine for a moment that the fantasists win the day and that at the climate conference in Copenhagen in December every nation commits to reductions even larger than Japan's, designed to keep temperature increases under 2 degrees Celsius. The result will be a global price tag of $46 trillion in 2100, to avoid expected climate damage costing just $1.1 trillion, according to climate economist Richard Tol, a contributor to the Intergovernmental Panel on Climate Change whose cost findings were commissioned by the Copenhagen Consensus Center and are to be published by Cambridge University Press next year. That phenomenal cost, calculated by all the main economic models, assumes that politicians across the globe will make the most effective, efficient choices. In the real world, where policies have many other objectives and legislation is easily filled with pork and payoffs, the deal easily gets worse. 

And then there is the looming prospect of a "green" protectionism. Already several European leaders have suggested that countervailing tariffs be imposed on imports from countries that refuse to ration carbon. And there are provisions in the Waxman-Markey climate change bill passed by the House of Representatives in June that would do the same thing. The result?

The struggle to generate international agreement on a carbon deal has created a desire to punish "free riders" who do not sign on to stringent carbon emission reduction targets. But the greater goals seem to be to barricade imports from China and India, to tax companies that outsource, and to go for short-term political benefits, destroying free trade.

This is a massive mistake. Economic models show that the global benefits of even slightly freer trade are in the order of $50 trillion -- 50 times more than we could achieve, in the best of circumstances, with carbon cuts. If trade becomes less free, we could easily lose $50 trillion -- or much more if we really bungle things. Poor nations -- the very countries that will experience the worst of climate damage -- would suffer most.

In other words: In our eagerness to avoid about $1 trillion worth of climate damage, we are being asked to spend at least 50 times as much -- and, if we hinder free trade, we are likely to heap at least an additional $50 trillion loss on the global economy.

Lomborg's bottom line:

To put it bluntly: Despite their good intentions, the activists, lobbyists and politicians making a last-ditch push for hugely expensive carbon-cut promises could easily end up doing hundreds of times more damage to the planet than coal ever could.

Go here to read the whole Lomborg op/ed. See Lomborg's recent reason.tv interview discussing climate change costs and benefits here. And take a look my recent column asking "Is Government Action Worse Than Global Warming?"