Spending Trillions one a Billion dollar problem is not Science

By Tino

Marginal Revolution writes about Yale Economist R. Mendelsohn, estimating the effect of global warming on the US economy. Not surprising, the effect is expected to be a net benefit. I have never understood why people think a few degrees warming is inherently bad. The last wasming had beneficial effects. Within the US there are large climate differences, without the warmer areas being worse of.

It is not only the US who will handle global warming with ease. Even the worse hit region (India, due to the monsoons) will only loose 4.9% of GDP for 2.5 degree warming, most likely an overestimation given the moderate rises of temperature we seen so far. For the world as a whole the cost is expected to be 1.5% of GDP by 2115.

Remember Kyoto alone is expected to costs 2% of GDP by 2050, and is just a first start. To reverse global warming you need many Kyoto’s. Most American estimates are higher. But people do not see global warming as an mondane event, instead getting their vision from hollywood movies such as Waterworld and Day after Tomorrow. This is the result of the unscientific image of doom the ideologis in the enviremental movement have spread.

You doubt they are ideologists rather than science-driven? Carl Pope, Executive Director, of the The Sierra Club had a debate with Lomborg In the latest issue of Foreign Policy. Instead of environmentalism he started attacking the US for “bullying Chavez”(!) and wrote gibrish aobut how capitalism exploited workers in 19th century Britain (common myth among socialists, the standard of living of workers of course increased during that period).

Hugu Chavez is semi-dictators who is rapidly destroying Venezuelans democracy. His best friend and idol is Cubas Fidel Castro’s. Why are there no eyebrows raised among the readers of FP?!?

The biggest hysteria over global warming among ordinary people is the rising sea levels. Many educated people are actually convinced global warming poses a “threat to our survival”. In fact, the extreme case scenario is a raise of 88 cm (expected rise is 40 cm). It would be laughable to call this a threat to humanity if the belief was not so common.

Sea levels have risen through the twentieth century by 10-25 centimeters without anyone noticing. Even the worst-case scenario is easily neutralized by spending some money on construction. The IPCC themselfs estimate a loss of 0.1% GDP by 2100.

The nation often used to motivate all this is the Maldives. But the Maldives sea levels have actually been falling along with global warming. Even if Mörner is wrong, the costs if razing the Maldives one meter is negligible compared to the trillions Kyoto and Kyoto II, III and IV etc will costs. (any thoughts Paul?)

One often hears people accusing us Global Warming realists of being ignorant or anti-science, for opposing Kyoto. But in fact it is those people who are unscientific. Global warming and how to handle it is a question for two types of scientists, Climatologists and Economists. Ignoring the latter part is no less scintific than ignoring (or exagerating) the former.


Trent McBride wrote:

Just to be fair - the worry is not simply on increased temperatures, it's climate change, which includes, but is not limited to, increasing temperatures. Thus, while still possibly small, these estimates run the risk of underestimating the economic mal-effects.

-- July 12, 2005 9:37 PM

Jacqueline wrote:

So what if it helps the US economy? What about the rest of the world? Should we be allowed to just muck up their climate? Especially considering that most of the worst impact will be on many of the countries least able to afford to cope with it?

-- July 13, 2005 12:17 AM

Kevin Brancato [TypeKey Profile Page] wrote:

A few quick points:

By default, current international arrangements already permit the US to muck up the climate of other countries to a certain extent.

Let's pretend that nations are people. If the question is of one of reigning in externalities, and we wanted an exchange nexus to govern the relationship, we should ask how much the US is willing to pay for the right to much up other climates. The answer is a lot more than the muck up will cost other countries. Kyoto leaves on the table a huge amount of unexploited gains from trade.

I'd argue that the current status quo (more mucking up, higher output) is much closer to the optimal position than the Kyoto position (less mucking up, much less output).

What right does the US have to do this mucking up? None, as I see it. What right do other countries have to lower the US standard of living or rate of economic growth? None, either, I'm afraid.

-- July 13, 2005 8:09 AM

Tino wrote:

Jacqueline I think I made it pretty clear the costs to the WORLD as a whole of a temperature increase as whole is also small (1.5% of GDP) compared to the costs of stopping global warming (at least 5% of GDP, probably more).

The climate change is all through the effect of temperature increase (the only effect of greenhouse gasses) So historical experience with temperature increases include everything else.

One think people don’t seem to understand is that global warming will also mean global moderation. Most of the warming will be at night and in colder places (which is why you should laugh every time NYT tries to scare you by using temperature change in the arctic).

Kevin makes an excellent point. If the world is panicked enough to go though with massively expensive Kyoto they will readily pay (comparably) small compensation to Maldives, India and Africa.

In the end I am pretty sure the net results of a couple of degrees warming will be positive to the world economy, if you take into account the massive utility gained from better weather. Is it likely that Russia, Scandinavia, Canada, Central Europe etc will compensate the US and other big CO2 countries with billion?

-- July 13, 2005 3:25 PM

ivan wrote:

As a recent report of the British House of Lords put it:

"The Kyoto Protocol makes little difference to rates of global warming and has a naive compliance mechanism, which can only deter countries from signing up to subsequent tighter emissions targets"

In other words: the Kyoto-protocol is rubbish.

-- July 15, 2005 4:50 PM

InvestingGuy wrote:

Not sure if bloggers on this site have found this Web site, but it has some of the best and professionally written critiques of Kyoto and the junk science hypothesizing hockey-stick-like spikes in temperatures, as well as the enormous economic costs of Kyoto.


-- July 19, 2005 2:17 AM

Post a comment


Listed below are links to weblogs that reference Spending Trillions one a Billion dollar problem is not Science:

» Four fine posts from economics blogs from Newmark's Door
Tino at Truck and Barter declares that policy on Global Warming should use two types of science: climatology and economics. Professor James Hamilton patiently and clearly explains that causal relationships in cross-sectional data can be different from ... [Read More]