What Are The Stakes in The Climate Change Debate?
Here is one straightforward way to put this in perspective.
1. Let’s start with a very long-term and global perspective of total present value of expected global income over the next several hundred years.
2. Then, estimate the total expected present value of damages expected to be casued by Anthropogenic Global Warming (AGW) over this period.
3. Then, estimate how much of these future warming damages we could avoid at a cost less than the avoided damages, assuming a globally-harmonized, optimally-designed and optimally-executed emissions mitigation program (say, a global carbon tax).
4. Then, subtract the expected costs of this mitigation program from the expected future avoided damages to come up with the bottom-line estimate of the expected net present value of the best-possible emissions mitigation program.
Using Nordhaus’s canonical analysis, here is what these four numbers look like:
The total net expected benefits of the best-imaginable program to combat global warming are about $3.4 trillion. This is about 0.17% of the expected present value of total global income.
Compare the current Waxman-Markey bill to “an optimally-designed and optimally-implemented” carbon tax. Consider what it would be like, in the real world, to cut a global deal. Now consider what it would be like to enforce this for more than a century, not only in Sweden, Japan and Australia, but in China, India and Brazil. Compare this to “a globally-harmonized, optimally-designed and optimally-executed emissions mitigation program.” Do you think the economic drag the real-world deal would create might cause the planet to lose more than 0.17% (or for that matter, 1.7%) of the present value of future income as compared to the case without such a deal? It is extremely likely, in my view.
Numerous very intelligent bloggers have raised the valid point that global GDP, or any measure of money income, is not a comprehensive measure of human well-being. I’ll have a future post on this topic. But it is striking that, at least when looked at in terms of the economy, we should expect the benefits of emissions mitigation to range from losing money (my view) to a positive gain of 0.17%, assuming perfection.
The problem is that we’re putting a global economy with present value of $2,000 trillion at risk to go after less than $4 trillion of expected present value of benefit. The desire to regulate the global economy to avoid the risk of catastrophic climate change is not a one-sided bet.
re: a comprehensive measure of human well-being.
Interesting question, that. A measure that’s defensible all the way down is logical depth. I haven’t found any others.
Stay away from ‘happiness’, for God’s sake.
— Kristoffer V. Sargent · Jun 29, 07:19 PM · #
No, it’s not a one-sided bet.
But unless you subscribe to the notion that AGW is just a bunch of lies made up by those atheist liberal scientist types (in which case there’s no point having a debate), then the precautionary principle seems blatantly obvious here.
Accepting logic and science as a baseline, there is a significant, 50%-and-up chance that the AGW theorists are at least partially right, and that our global ecosystem faces significant and rapid change that threatens its stability and amenability to widespread human habitation.
If we act and the AGW theorists are wrong, the worst-case scenario is that the global economy doesn’t grow quite as fast as it would have otherwise.
If we don’t act and the AGW theorists are right, the worst-case scenario is that human habitation on the planet is significantly disrupted by direct and indirect ecosystem effects of rapid climate change.
You’re willing to roll the dice with the future of humanity for the sake of a couple percent of lost growth.
— Travis Mason-Bushman · Jun 29, 09:06 PM · #
Travis:
I take your point, and consider you to be sincere about this (that sounds patronizing, but that’s not how I mean it). The problem with your argument is the numbers, not the idea.
In order to accept your argument, I think a rational person needs to convert the (rational) fear of very large damages from climate shifts to numbers, or else go into pure Precautionary Principle land. As per our earlier exchange, I can easily come up with 51 non-crazy risks to humanity (killer asteroid, mutant variant of the HIV / Avian virus, bioengineered weapons, thermonuclear war, etc.). If I apply your logic, we should be willing to spend “a couple of percent” of GDP on each. But 51 X 2% = 102%; I’ve just used up all of GDP and can’t prevent all of these risks. I know that you know that trade-offs are necessary, and assume that you see this as the need for some “reasonable” balancing of inevstment of resources against risks. But this just comes back to the quantification question: how much is reasonable?
I’ve never argued that this is some kind of conspriracy, and have been widely attacked from the Right for this. I think the concern about AGW is rational, but I think that humanity is likely to face many challenges over the next two hundred years – most of them unpredictable – and we need to carefully husband our resources and maximize our options.
— Jim Manzi · Jun 29, 09:23 PM · #
Jim,
Are you suggesting that because we can’t do something about everything, we should do nothing about anything? That strikes me as absurd and nihilistic.
Asteroids, etc. are red herrings. We really have no control over an asteroid striking the Earth – that’s random chance and fate of the universe. Similarly, whether HIV/avian flu mutates is out of our hands.
We know what human action is causing anthropogenic global warming – the introduction to our atmosphere, within the span of 200 years, of the carbon which accumulated over billions of years in coal, petroleum and natural gas, along with widespread deforestation that has removed shorter-lived carbon traps.
We also know what actions we can take to reduce our production of carbon dioxide – burn less fossil fuels, and when we do burn them, capture and sequester the carbon dioxide produced.
We have a defined, human-caused threat to the future of humanity and a set of defined steps humans can take to reduce the threat. Nothing else you listed is analogous, except perhaps nuclear weapons – and yes, I think if we could spend 2% of GDP to eliminate nuclear weapons from the face of the Earth, that would be money well spent.
— Travis Mason-Bushman · Jun 29, 09:47 PM · #
Jim, if I understand your point, it’s sort of like saying, “Given all the various things threatening traditional families, worrying about whether or not the gays can marry and what if any corrosive effect that might have on families speaks of misplaced priorities.”
Fair parallel?
— Tony Comstock · Jun 29, 10:31 PM · #
Do you think the economic drag the real-world deal would create might cause the planet to lose more than 0.17% (or for that matter, 1.7%) of the present value of future income as compared to the case without such a deal? It is extremely likely, in my view.
Do you consider the possible loss here to be fat-tailed, as in there are many likely scenarios in which global emissions mitigation causes a much greater loss than 1.7%, and this cannot be foreseen soon enough to repeal the emissions controls and avert the loss?
— Consumatopia · Jun 29, 11:17 PM · #
“Do you consider the possible loss here to be fat-tailed, as in there are many likely scenarios in which global emissions mitigation causes a much greater loss than 1.7%, and this cannot be foreseen soon enough to repeal the emissions controls and avert the loss?”
Everyone’s got to take their own hedges against black swan scenarios. We planted a smaller orchard this year. If the plumage stays white, the orchard will still have a pleasant fragrance and bear delicious fruit.
— Tony Comstock · Jun 29, 11:30 PM · #
I want to add that discussions like the global warming one we’ve been having are a big reason why I read The American Scene on a daily basis. Thought-provoking writers, a cross-section of views and comment threads that generally feature passionate, reasoned and honest debate. TAS is neither an echo chamber nor a mudfight. Bravo.
— Travis Mason-Bushman · Jun 29, 11:53 PM · #
Consumatopia:
Yes (though not in this post, which focuses only on expetced value). See this post for my response to Weitzman’s fat-tail argument.
— Jim Manzi · Jun 30, 01:22 AM · #
“ Of course they aren’t quantifiable – we only have one planet. Does this make the logic for insurance less compelling, as Manzi claims, or more? Insisting on quantifiability in this case is simply a way of arguing against any kind of environmental constraint until it’s too late. It’s cloaking denialism in a sheen of science, rather than trying to actually address the ethics of the underlying issue.”
This is from one of Andrew’s readers, I think it’s a great point. One way to filibuster your way to winning an argument is to demand the other side quantify when that’s impossible – but deciding on action vs inaction is still obviously important. People who do this could be fairly accused of being (intentionally?) obtuse.
There’s an air of just not wanting the bill because you don’t like government action or spending – that you’re just working backwards from that. If the scientific consensus is correct this is a pretty distasteful position – a bit like arguing against funding of public health programs or the CDC in the face of knowing that communicable disease is a real threat.
Much more interesting IMO is the Shellenberger/Nordhaus position that something ought to be done, but it’s not this. They have a good argument that acknowledges scientific consensus and proposes a plan to do something about climate change (just not the Waxman bill).
Conservatives, OTOH, like to give lip service to climate change, but seriously, if it’s up to Manzi and NR types and Republicans, does anyone think they’d really do anything other than just wait and see? There’s no real energy on the right behind this, they’re held back by various constituencies that don’t believe in evolution, scientific consensus is not a factor for them. If 2070 comes along and all hell has broken loose it’ll just be “oops! almost everyone from back then is dead now anyway, it’s not our (2070 Republicans) fault! Let’s all move forward – not lay blame for the past!”. Etc.
— Steve C · Jun 30, 02:19 AM · #
I’m glad you will be addressing the “non-economic effects” argument soon, Jim, and I look forward to reading what you have to say. To me this is a primary reason for supporting climate change mitigation.
In fact, it is in part a classic economic argument — you have one good (coral reefs, let’s say) whose consumption is in danger of irreversibly plummeting, perhaps almost to zero, and other goods for which there is no such danger. Logic suggests that we should expend more resources on “endangered” goods because it is important to our well-being to preserve the diversity of our experience (due to diminishing returns).
Obviously such logic can be taken too far. But to me, the fact that we are destroying coral reefs, perhaps irreversibly and perhaps completely, quite simply tells my brain, even with no other information, that something is wrong. If human action is capable of preserving a unique category of natural beauty, that to me is very valuable and very worth trying for.
Of course, other problems are more severe — malaria, AIDS, poverty, etc. If you ask me, we should be expending more resources on all of these problems (assuming the resources can be channeled productively). But the effect of global warming on the diversity of potential human experiences is real and worth trying to find some way to account for.
— mk · Jun 30, 02:45 AM · #
…it was a thing unavoidable, a necessary ingredient in the best of worlds; for if Columbus had not caught in an island in America this disease, which contaminates the source of generation, and frequently impedes propagation itself, and is evidently opposed to the great end of nature, we should have had neither chocolate nor cochineal.
Dr. Pangloss: the merits of syphilis.
— Stew · Jun 30, 03:35 AM · #
I have been reading your posts and thinking they made sense and at the same time knowing that Waxman etc.. was going to be a bad bill and wondering what the right action was here. But I read some things on Andrew Sullivan that made sense to me.
One point compared waxman to earlier environmental legislation, such as the clean air act, pointing out that they all started out weak and were strenghtened until the became effective. The seems to me to be a pretty likely description of what will happen with global warming legislation.
The second convincing point was that action taken by the rich countries would infulence the poor. I think this is true. It is also true that the rich countries caused the vast majority of the problem—a global problem—and they have the moral responsibility (and the wealth) to take the lead in dealing with the problem.
I also agree witht he point that no one can predict innovation. Does anyone really think that fossil fuel burning is the peak of energy production technology, that we can’t do better (or different)? Or that we can’t figure out some way to use or sequester or convert CO2? Conservatives and libertarians should have more faith in the market right? This is a huge opportunity. There is money to be made.
And finally, it has occured to me lately that we are getting into very dangerous territory here. We are talking about altering the global climate. To what degree we don’t know, but when you are talking about the climate, the scope of potential harm is vast (global, in fact). Global climate events like volcanoes and asteroid collisions caused huge die-offs in the past. This is really something that we don’t want to be messing with. We have all these models and speculations about what might happen, but we all know from the current finacial crisis that when dealing with compelcated systems future events are very hard to predict. They say that there is an outside chance that the tempreature will rise 9 degrees and extrapolate effects from there, and that’s fine, but there is a 100% chance that there are global warming effects that no one has even consedered, and some of those effects could be hugly, globally catestrophic, destroying way more than 1% of world GDP.
So I think that we have to take action (and that we will take action). Waxman is a weak start similar to other eventually effective enviromental legislation. It will put pressure on industry to innovate their way out from under it and it will show people that the government takes global warming (somewhat) seriously. It is a good PR move, if nothing else. I think they should pass it—even if it is just symbolic—then start working to make it better. What else is in the pipe? Nothing as far as I can tell.
— cw · Jun 30, 04:29 AM · #
Yes (though not in this post, which focuses only on expected value). See this post for my response to Weitzman’s fat-tail argument.
I get that Weitzman’s attempt to quantify uncertainty is problematic or at least unfinished, but were you really arguing in that post that we should take no account of uncertainties in policy whatsoever? That we should only consider quantifiable risks, with comparisons of expected value having the final say?
— Consumatopia · Jun 30, 12:41 PM · #