Thursday, May 21, 2009

Climate Economics

I consider myself a global warming moderate; I believe that global warming is happening, but I don't think it will destroy the planet or throw us back into the Paleozoic.

I'm not sure the future benefits of doing stuff now to fight global warming are worth the present costs.

And I'm reasonably certain that it's all a moot point, anyway-- we won't be able to convince India and China and Africa (let alone Kentucky and Kansas) to sacrifice For the Good of the Planet and Future Generations.

Anyway, I've been impressed with the quality of information at the RealClimate blog, and so was pleased to run across "Real Climate Economics" (thanks Joseph).

And then I was disappointed.

The home page says: "The peer-reviewed literature demonstrates that there is rigorous economic support for immediate, large-scale policy responses to the climate crisis."

OK. "Rigorous economic support" -- is that the same as a general consensus among professional economists?

So I dig a little deeper, and read Frank Ackerman's "Climate Economics in Four Easy Pieces," which is a philosophical piece basically saying that we should assume that the worst is going to happen and we shouldn't try very hard to measure costs and benefits because our environment is priceless. And don't worry, because spending lots of money on global warming stuff will actually be GOOD for the economy.

Well. I'm not a big believer in assuming worst-case scenarios. That's a good way to do stupid stuff like spend money on an extended warranty for your IPod or invade Iraq. But reasonable people can disagree about the validity of the precautionary principle.

As for not trying to measure costs and benefits: What? How can we have a reasonable discussion without trying to get a handle on how big the problem, and how expensive the solutions, are? Yes, it's hard. Yes, reasonable people can disagree about what value to put on ecosystem destruction or species diversity. But what's the alternative? Just do what feels right? Spend as much as the public will bear? (That's what we'll actually end up doing, of course, but I was hoping for a more rational approach)

And if spending lots of money on global warming will create cool new technologies and create lots of jobs... well, wouldn't cost/benefit analysis show very low costs and very high benefits?

When I have more time, I'm going to give Real Climate Economics one more chance. Here's my "are they biased" test: Do they refer to at least one paper on their web site that computes the benefits of Global Warming on the climate in some places?
Or are they 100% gloom and doom?


Joseph said...

As earlier noted, I hadn't read that economics blog when I forwarded it on!

Anonymous said...

Ah, yes, more of the patented Andresen diffidence.

I wish we got $10 for every "I'm not a big believer in......" comment on this blog.

Only on the policy sidelines do you get to make such remarks. And "not being a big believer in" is not the same as having a belief in something.

So let me ask you about one potential outcome that has real consequences: do you think that we're going to have substantial sea level rises in the lifetime of your children? It won't take much to create problems for millions of people living in low-lying areas. I've said for years that Republicans will believe that government should do something about climate change just as soon as expensive beachfront property begins to get inundated. Well, it won't be just Republicans in trouble.

Perhaps that also gets the standard ho-hum, que sera sera, Gavin response. But I think that it's a matter of some concern.

Of course, another real possibility is that it's already too late. I guess we'll see it when we see it. No worries.

Rich Morse

Gavin Andresen said...

I can try to find a less annoying way of expressing the "I'm not a big believer" idea; the geeky way would be to assign a probability estimate (p=0.4 for stuff I kinda think ain't true, p=0.000001 for stuff I KNOW isn't true, p=1 for stuff I'm certain is true, etc) to my belief.

Do I think we'll have substantial sea-level rise in the next 100 years? Yes, with p=0.7.

Do I think it's worth spending money now to preserve our kids' beachfront property? No, with p=0.6.

I'm not passionate about climate change partly because I'm far from certain that I'm right, but mostly because I think other issues are a lot more important.

Anonymous said...

And I would argue to you that much of the policy efforts that we might undertake on climate change help us to move toward other worthwhile goals, like energy independence.

And many of the undertakings involve very little in terms of expenditure of resources and cultural change.

This is why I find the studied indifference of the climate change skeptics to be so strange. I think that there's something else going on there, some need to push back.

Rebels without a cause, if you will.

Rich Morse

Gavin Andresen said...

I'll have to find time to post on why I think "energy independence" is a silly idea...

That aside, I agree that there will be positive side effects to tackling climate change. And I agree that we all should pay for "negative externalities" caused by stuff we do.

I'm pushing back against the notion that we must spend AS MUCH MONEY AS IT TAKES because THE ENVIRONMENT IS PRICELESS and OUR CHILDREN WILL BE LIVING ON BOATS if we don't so something RIGHT NOW!

I know you're reasonable, Rich-- I'm reacting to the "Real Climate Economics" folks (and yes, I'm exaggerating their position for dramatic effect).