If you read only one article this week—nay, this month—make it this one from the increasingly indispensable Eric Pooley: "Surprise—Economists Agree! A consensus is emerging about the costs of containing climate change. So why is no one writing that?"
The point is that despite what you read in the media, there is in fact a fairly broad consensus among economists about the costs of climate change mitigation. Namely:
- The costs of inaction are far higher than the costs of action, and
- the costs of action are fairly modest—between 0.5 and 1 percent of GDP by 2030, a far, far smaller impact than the current economic crisis is having.
This is why, in the words of economist Robert Stavins, "There is general consensus among economists and policy analysts that a market-based policy instrument targeting CO2 emissions ... should be a central element of any domestic climate policy."
Why is the media so bad at conveying this consensus? That’s what Pooley investigated in more detail in his discussion paper [PDF], which Joe Romm covered here and which is also an absolute must-read. The reasons are basically twofold:
- The media is terrible at distinguishing between reputable economists and hacks, and
- economists argue vigorously among themselves even when they agree on the big picture, and this can obscure the larger consensus from the view of journalists.
I would add the extraordinary efficacy of industry-funded right wing think tanks and media outlets at placing their hacks as authoritative sources. They are incredibly good at it, and not just in this area. Journalists aren’t just poor judges; the hacks are actively thrust upon them.
Now, as it happens, I agree with Romm that the scientific consensus, as represented by the latest IPCC report, probably understates the case—that climate change is more severe and urgent than the report indicates (and most journos don’t even do a good job of accurately representing that degree of urgency).
I also agree with a growing number of economists—people doing bottom-up studies that try to take efficiency and innovation seriously, like the folks at ACEEE—that the economic consensus probably overstates the cost of addressing climate change. I would bet a substantial sum of money that by 2030 we will look back at efforts to eliminate GHG emissions (should we ever make them in earnest) as an enormous economic boon to the country, every bit as fateful as the move from whale oil to electricity. It will unlock a new era of economic growth and prosperity.
But I realize that both these views are outliers. I realize journalists are obliged to accurately represent the middle of the bell curve of opinion.
Problem is, they’re not doing that on the economics. Not even close. They’re getting it just as badly wrong as they got the science for years and years.
So all you journos, please inscribe this sentence into your memory:
Most economists agree that the costs of addressing climate change will be modest and that the costs of failing to do so will be enormous.
Top 25 reasons to give a damn about climate change
Comments
View as Flat
Russ Posted 5:47 am
13 Feb 2009
Fed Calls Gain in Family Wealth a Mirage
It's always seemed to me this high discount rate concept begged the question, since the religious belief that exponential growth will continue unabated in perpetuity, and that everyone will just get richer and richer forever, is precisely one of the articles of faith being challenged by dire climate crisis projections (as well as Peak Oil and other looming pickles).
I imagine this wealth/growth revocation is just a preview of things to come, and economists, if they have any integrity at all, will have to revise their tenets, and if they have any morality at all, will have to recognize that the still wealthy first world has to decide whether to use some of that wealth to help alleviate the circumstances of what will almost certainly be a materially poorer future, or instead to use all of it in the continued binge which will just bury the future completely.
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Delay And Deny Posted 7:00 am
13 Feb 2009
I'm investing heavily that improving temperatures will lead to an economic boom time for humanity.
"If you ask me, I think it's just another ball of hydrogen!" -- Captain Fraddock, S1E11
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GreyFlcn Posted 9:09 am
13 Feb 2009
Is this one,
http://greyfalcon.net/gingrich2
And Lomborg's argument that if you assume the least possible damage from global warming, and assume zero positive fringe benefits from dealing with global warming, that it makes more sense just to nothing.
(Yes, these are the assumptions that go into Lomborg's model)
-David Ahlport
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JohnMashey Posted 9:33 am
13 Feb 2009
I've looked at Stern, the Nordhaus DICE model, MIT, the assumptions by IPCC, etc. Regardless of what else they say, they all seem to think that economic growth continues indefinitely like it has for the last century. That in effect assumes no impact from Peak Oil and its relatives, which seems "odd".
I know it's a tiny minority opinion, but the work from Robert Ayres & Benjamin Warr, Charlie Hall, etc seem worth considering.
http://www.iea.org/Textbase/work/2004/eewp/Ayres-paper1.p ...
and especially
http://www.cge.uevora.pt/aspo2005/abscom/ASPO2005_Ayres.p ...
the last page of that models the US economy under various assumptions about efficiency, and it doesn't look like everlasting growth.
If you believe Ayres & co, we have to move even faster on investing fossil resources on energy efficiency and sustainable supplies, before the future downtrends in (oil&gas) wreck the economy or drive people to use even more coal instead of shutting it down. Also, if you believe them, there are many scenarios in which energy efficiency+sustainability aren't just needed to help climate, but are actually negative costs, or at least, help avoid even worse economic downturns.
Companies often spend the profits from an existing business that is clearly going way, to invest in replacements. If they do that while they still have capital, they stay in business, but if they wait too long, they go bankrupt.
Note: I don't want to get into arguments about whether or not economic growth is "good", simply express the worry that the consensus (that mitigation costs are modest) may be nowhere near strong enough, and they might have the sign wrong on costs...
In more detail:
http://scienceblogs.com/deltoid/2009/02/the_economists_co ...
-John Mashey
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hapa Posted 10:00 am
13 Feb 2009
"the cost of BAU is greater than the cost of avoiding the iceberg" is about as obvious a conclusion as one can reach without being a bad gambler.
"the cost of mitigation is minimal" is an argument for a world that doesn't care about its own future. smart people define their goals and then figure how to pay for them.
and apparently not "needless to say," ordinary budgets end at boundaries -- i need only enough money to cover MY expenses, and if i screw up, many people in my network can catch me. this operation is bounded by the top of the atmosphere and the sea floor and has no safety net. underspend as you will.
maybe the little depression will help people recognize the risks of lowball public service.
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phanly Posted 1:24 pm
15 Feb 2009
Please see:
http://en.wikipedia.org/wiki/Economic_opinion_on_climate_ ...
and list all major economic reports abut climate change under the appropriate heading.
See also the Wikipedia page linked from there:
Scientific opinion on climate change
It is very useful to have all the major reports listed in one place
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