Freeman Dyson’s selective vision
In the New York Review of Books, Freeman Dyson reviews two recent ones about global warming, but his review is mostly shaped by his own rather selective vision.
1. Carbon emissions are not a problem because in a few years genetic engineers will develop “carbon-eating trees” that will sequester carbon in soils. Ah, the famed Dyson vision thing, this is what we came for. The seasonal cycle in atmospheric CO2 shows that the lifetime of a CO2 molecule in the air before it is exchanged with another in the land biosphere is about 12 years. Therefore if the trees could simply be persuaded to drop diamonds instead of leaves, repairing the damage to the atmosphere could be fast, I suppose. The problem here, unrecognized by Dyson, is that the business-as-usual he’s defending would release almost as much carbon to the air by the end of the century as the entire reservoir of carbon stored on land, in living things and in soils combined. The land carbon reservoir would have to double in size in order keep up with us. This is too visionary for me to bet the farm on.
2. Economic estimates of the costs of cutting CO2 emissions are huge. In an absolute sense, this is true, it would be a lot of dollars, but it comes down to a few percent of GDP, which, in an economic system that grows by a few percent per year, just puts off the attainment of a given amount of wealth by a few years. And anyway, business-as-usual will always argue that the alternative would be catastrophic to our economic well being. Remember seat belts? Why is it that Dyson’s remarkably creative powers of vision (carbon-eating trees for example) fail to come up with alternatives to the crude and ugly process of burning coal to generate electricity?
3. The costs of climate change are in the distant future, and therefore should be discounted, in contrast to the hysterical Stern Report. I personally can get my head around the concept of discounting if the time span is short enough that it’s the same person on either end of the transaction, but when the time scales start to reach hundreds and thousands of years, the people who pay in the future are not the same as the ones who benefit now. Remember that the lifetime of the elevated CO2 concentration in the air is different from the lifetime of CO2 to exchange with the biosphere. Release a slug of CO2 and you will increase the CO2 concentration in the atmosphere for hundreds of thousands of years. The fundamental tenet of civil society is to protect people from harm inflicted by others. Are we a civilized species, or are we not? The question is analogous to using economics to decide whether to abolish slavery. I’m sure it was very costly for the Antebellum Southern U.S. to forego slave labor, but it simply wasn’t an economic question.
4. Majority scientists are contemptuous of those in the minority who don’t believe in the dangers of climate change. I often find myself contemptuous of efforts to misrepresent science to a lay audience. The target audience of denialism is the lay audience, not scientists. It's made up to look like science, but it's PR. We have documented Lindzen’s tortured and twisted representation of the science to non-scientists here and here. If Lindzen had a credible argument to support his gut feeling (and apparently Dyson’s), I can promise that I for one would take it seriously. I’ve got kids at home whose future I worry about. If Lindzen were right, no one would be happier about that than me. But I do get contemptuous of bullshit.
24 May 2008 at 6:01 PM
Dyson is a good physicist, but far too often his predictions and analyses of thing’s strictly beyond the realm of physics seem far too speculative and don’t seem to address current problems. Dyson Spheres, Dyson Trees, and genetically engineered plants for Carbon Sequestering all make for good thought experiments and “what-if” scenarios, but none of this stuff addresses current problems in any meaningful way.
Of course, Dyson also seems to think the costs of global warming are only in the distant future, so I suppose this deficiency in his “dyson vison” doesn’t bother him that much.
24 May 2008 at 6:06 PM
I am beginning to have severe doubts on that score.
Good point with #4. I’m not contemptuous of deniers per se, just of the misleading ‘facts’ they use. Anyway, fight fire with fire. If they’re going to go out of their way to insult their ‘opposition’…
24 May 2008 at 6:12 PM
You do a great service by this discussion. I hope the NY Review of Books can reprint or note the link for their readers.
It is crucial that media editors get up to speed on these issues.
Many thanks for responding.
24 May 2008 at 6:27 PM
It’s nice to recognize the carbon storage value of trees and forests, but genetic engineering may have unacceptable unintended consequences or won’t obtain the desired results. In response to warming, below-ground biological activity will increase and with it the rate of turn-over of old soil carbon pools, so the “extra” carbon that may be pumped into the soil by genetically altered trees may not stay for long. See María Jesús Iglesias Briones, Nicholas J. Ostle and Mark H. Garnett. Invertebrates increase the sensitivity of non-labile soil carbon to climate change. Soil Biology and Biochemistry. Volume 39, Issue 3, March 2007, Pages 816-818.
In addition to modifying trees to pump more carbon into the soil, some have suggested that we should take genetic engineering in another direction as well - to weaken the cell walls of plants so that the cellulose can be more easily converted to biofuels. I hope we are thinking through all the unintended consequences, such as structurally weakened trees that are less able to grow to great size and consequently less able to store carbon.
For more information on the carbon storage value of forests (*not* genetically altered), see the recent report of Oregon Wild., here: http://tinyurl.com/2n96m5
24 May 2008 at 6:46 PM
Thank you for the excellent words. Freeman Dyson is way too smart to ignore, but everybody makes mistakes.
24 May 2008 at 7:55 PM
My heartfelt thank to David for his comments on Freeman Dyson, not only for rebutting Dyson’s utopian ideas but for showing us non=-scientists that science is not all bad, that there are honest scientists, and that debate and dissent constitute progress, not obstruction or fundamental disagreement . Too many otherwise progressive people make too little effort to listen to these debates. If they did, they would stop being suspicious of science and realize that science is not our enemy but one of our most powerful tools to counteract ideology, propaganda and the conspiracy theories that inhabit our society and the internet in particular.
24 May 2008 at 8:02 PM
Dyson accepts the consenus and refers to his predictions as “a story, not science”, from what I have seen he likes to play the devils advocate. No different in motive and moral, or less confusing in content, than some of the ‘rantings’ of Lovelock. To write either off as malevolent/uniformed/stupid/senile would be foolish. BTW: I don’t accuse realclimate of having done that, but my own prediction is that others will.
24 May 2008 at 8:31 PM
Very useful post.
Dyson jumped the shark on global warming a while back. See
http://climateprogress.org/2007/08/15/freeman-dyson-climate-crackpot/
Then again, although a brilliant ‘theoretical’ scientist, he’s never been all that practical. He was, after all, one of the “geniuses” pushing Project Orion — the incredibly absurd idea of creating a rocket ship powered by detonating nuclear bombs (you can Google it).
Finally, the discounting issue, while important, is not as important to cost-benefit analyses as the serious prospect of catastrophic outcomes, as Harvard’s Weitzman has shown:
http://climateprogress.org/2007/09/11/weitzman-economics-climate-change-catastrophe/
That said, the mainstream economic policy think tank — Resources for the Future (RFF) — wrote a major report, “An Even Sterner Review,” that concluded, “we find no strong objections to the discounting assumptions adopted in the Stern Review”! And RFF is about as middle of the road as you get.
See also http://climateprogress.org/2007/06/18/dont-discount-the-stern-review/
24 May 2008 at 8:44 PM
David
“The problem here, unrecognized by Dyson, is that the business-as-usual he’s defending would release almost as much carbon to the air by the end of the century as the entire reservoir of carbon stored on land, in living things and in soils combined.”
I am certainly not an advocate of “business-as-usual”. And I am a strong advocate of energy sources that do not use carbon. But I am wondering if there is enough recoverable carbon to release quite as much carbon to the air you suggest here. I really don’t know one way or the other.
Al Crawford
[Response: There is about 5000 Gton C of coal, compared with about 500 (trees) + 1500 (soils) on land. Of oil and gas there are only a few hundred Gton each. Coal is the real issue. David]
24 May 2008 at 8:47 PM
I think the 4% discount rate is fruitloooooopy.
I don’t see how he can claim 4% is conservative. Holocene economists appear woefully unprepared for the Anthrocene. How could they be? It’s a wheat field today. It was a wheat field 100 years ago. In many cases it was a wheat field a century ago, or much longer.
I wonder what discount rate an Australian agricultural economist would recommend?
- The Economist
Under the “warming is going to be peachy keen” notions, some newly warmed place else is going to grow replacement wheat, right? Did the Canadians forget to plant their new fields?
24 May 2008 at 8:59 PM
I think the “discounting” argument is particularly fallacious in this case. What if we applied the argument to cancer or to an epidemic? Clearly, the worst costs are well down the road, so if we do nothing now, we will be in a better position to pay those costs later. Discounting does not do a good job when a system has positive feedbacks that ensure greater damage if nothing is done.
Unfortunately, I think that there are a lot of scientists (non-climate scientists) who do not like the idea that we will have to divert so many of our resources in the near future to mitigating climate change instead of making progress in other (their) areas of science. However, it won’t do us much good to know the mass of the Higgs Boson if our civilization cannot feed itself.
24 May 2008 at 9:02 PM
I’m still waiting for my jetpack, flying car and robot servant, I’m not holding my breath until genetics magically solves the carbon problem.
24 May 2008 at 9:10 PM
Dyson has a long standing preoccupation with bioengineering plants to do remarkable things, like providing space habitats. It is unfortunate that he used this public forum to inappropriately ride his hobby horse. As for his comments on Lindzen and Rahmsdorf, I wonder how he would feel about individuals claiming that quantum electrodynamics, a remarkably successful theory to which he made major contributions, is wrong.
24 May 2008 at 9:29 PM
Dyson suffers from the same mental blinders as a lot of dreamers, who can only dream of a better world. I suppose this is entangled with the Judeo-Christian view that “things will get better just you wait” thing, played out in the world of physics and science for the pleasure of a secular audience. Of course, 50 years of seemingly endless progress would seem at first to prove them right, it really is upwards all the time. Until one realizes that the progress was based on the unleashing of stored energy to drive the pistons of industrial might, and almost nothing more.
Successful dreamers, the ones who make a living at selling dreams, usually have a happy vision to share. They will write you a book about that. People like to buy their books and read them to feel better about the vague terror that is creeping into their days and nights. Nobody wants a sad book about nightmares, catastropie and individual responsibilty. Nobody wants to think about rolling back 600 years of “progress” to some other world that feels uncomfortably like the Middle Ages. No not that, surely technology will pull us out of this. Think Happy Thoughts. Buy something shiny.
We are asleep, walking. Almost 7 billion, oblivious. Genetically engineer us a clue if you can.
cb
24 May 2008 at 9:29 PM
Re: the notion that costs of cutting CO2 emissions are a few % of GDP. Global warming is only a symptom of our collective disease of striving for ever greater growth. Other symptoms include massive extinction of species, resource exhaustion (e.g., peak oil), reducing the long term carrying capacity of the planet, etc. The list is long. If global warming doesn’t get us, then one of the other upcoming problems will.
The notion that our economy will grow ad infinitum is absurd. We might be able to sustain economic growth for another 20-30 years at best, and then things get ugly. We should be thinking about how to preserve the habitability of the planet for future generations. Right now, your kids’ future (and mine, too, regretably) is looking very bleak.
The point is, forget about GDP. Don’t even engage in the argument, because it trivializes the challenge we face. This is about saving Mother Earth, and arguing over dollars and cents obscures the real issue.
24 May 2008 at 10:00 PM
Dyson is talking through his “sphere” (in a manner of speaking).
Biochar seems to be an important process in permanently removing carbon in the atmosphere while increasing crop/plant growth:
http://en.wikipedia.org/wiki/Biochar
24 May 2008 at 10:11 PM
On point 3. Your final argument about economics and slavery is weak. The derogatory term “the dismal science” for economics comes from Thomas Carlyle who attacked economists such as John Stuart Mill for supporting the emancipation of slaves and argued for the reintroduction of slavery in the West Indies. And the “idea, that people are just people, can be traced from Mill back to Adam Smith’s Wealth of Nations.”
See http://en.wikipedia.org/wiki/Dismal_Science and http://www.econlib.org/library/Columns/LevyPeartdismal.html
24 May 2008 at 10:22 PM
Brett: Speaking as a card-carrying economist (no throwing of rotten tomatoes, please), I have to say that we have little choice but to express such things in dollars (meaning currency, not necessarily US$). We have to make economic decisions, by which I mean the allocation of scarce resources, and the only way to do that is by trying our best to measure the costs and benefits (including avoided catastrophes) in some common unit. Since many of the things we’ll do, like impose a price on carbon or move people away from flooding coastal areas or find ways to replace farm land poisoned by encroaching salt water, will be measured in dollars already, that’s probably the right choice.
Yes, it’s very distasteful, and yes, it seemingly trivializes almost every aspect of the GW challenge. But because we have so many options to choose from, we need a way to rank and combine them to make the most of our scarce resources to achieve the desired goal.
24 May 2008 at 11:00 PM
Hmmm…
How is it that economic analyses that end up deciding that we need do nothing now because it will be cheaper using some theoretical new technology, never come up with how much we need to be taxing ourselves now to invest to pay for what our grandchildren are going to have to do? When I start seeing the delayers proposing tax rates, I’ll start to take them seriously.
Oh, and how do we compensate the folks that are being harmed by AGW now?
Tim
24 May 2008 at 11:13 PM
David, thanks for calling the thing by its right name. It’s time the press stepped up to the plate and acknowledged that much of the public controversy is traceable to deliberate nonscientific efforts to mislead.
Also I agree that discounting is the wrong way to think on very long time scales. On the other hand I also agree with Lou Grinzo (#18) that our circumstances are sufficiently complex that we need some sort of quantitative way of expressing our choices. Whatever model we construct will be far less reliable than any climate model, but quanlitative understanding may emerge from the right quantitative models. However, I very much doubt that the correct measure of long-term well-being is commensurable with currency at all.
Will my descendants in a hundred years be better off with $100 in Scenario A or with $90 in scenario B? Clearly that depends on the rate of exchange between scenario A and scenario B. But, as far as I know Chase bank does not buy hypothetical dollars from, say, the universe where Karl Rove was a successful used car dealer in Amarillo and left the rest of us alone. When you consider the matter, you will see that there really is no medium of exchange across hypotheticals. It is very easy for me to imagine cases where the $90 in scenario B is in fact not only preferable but vastly preferable to the $100 in scenario A.
I conclude that money is intrinsically a short term measure. In a sense, that is what the discount rate is trying to tell us. It’s not that the future is worthless; it’s that its worth isn’t meaningfully measured in 2008 dollars at all. Insofar as economics reduces all decisions to a medium of exchange at a particular, such a theory cannot be useful in long range planning. This doesn’t release us from our moral obligation to our distant descendants or the world they will inherit.
25 May 2008 at 12:16 AM
I tend to read a lot of press releases about global warming in my spare time. The most recent ice core samples were extended from 600,000 years ago to 800,000 years ago. The story hit the news about two weeks ago. The core samples showed that co2 is now higher than at any time within the past 800,000 years.We are at 385 ppm , with no end in sight to a rapidly increasing ppm figure. In fact, I’ve read that 450 to 550 ppm is forseeable. My research indicates that the Siberian peat moss, Arctic tundra, and methal hydrates(frozen methane at the bottom of the ocean) all have an excellent chance of melting and releasing their stored co2.Recent methane concentration figures also hit the news last week, and methane has increased after a long time being steady.The forests of north america are drying out and are very susceptible to massive insect infestations and wildfires, and the massive die offs-25% of total forests, have begun.And, the most recent stories on the Amazon forecast that with the change in rainfall patterns one third of the Amazon will dry and turn to grassland, thereby creating a domino cascade effect for the rest of the Amazon.With co2 levels risng faster now that the oceans have reached carrying capacity, the oceans having become also more acidic, and the looming threat of a North Atlanic current shutdown(note the recent terrible news on salinity upwelling levels off Greenland,) and the change in cold water upwellings, leading to far less biomass for the fish to feed upon, all lead to the conclusion we may not have to worry about NASA completing its inventory of near earth objects greater than 140 meters across by 2026(Recent Benjamin Dean astronomy lecture here in San Francisco). Note: Tungusta blast in Siberia 100 years was an object only 30 meters across. I’ve said it before on this most excellent website, RealClimate, and I’ll say it again:I’m not a scientist, but I know what I read. 385 ppm, and climbing rapidly. End of story.Period.Falling 80% below 1990 levels by 2050?Lieberman- Warner bill needs to be “fall 80% below 1990 levels right now” for there to be any chance at all. I’ve got the guts to say it, so I’ll say it again. Humans, fall right now 80% below 1990 levels of worldwide manmade co2 output, or you’ll go the way of the dodo, dodo.Then, according to this cool new book I’m reading called “The World without us”, by Alan Weisman,the Earth will gradually be recovered with forests and grassland, and new species will arise.Where are those crystal skulls when you need em, Freeman?
Mark J. Fiore, Harvard 1982, Boston College Law School, 1987,often hikes in Western Marin County, CA, where there are still some redwoods not yet shriveled.
markfiore50@hotmail.com
25 May 2008 at 12:30 AM
Kudos to 18. Lou Grinzo. Investments needed to combat AGW need to
pass economic muster, by economists, not climatologists.
No matter how morally righteous environmentalists may feel, the
best allocation of resources belong to economists and politicians
that represent the public, balancing current and future human needs.
How much should we sacrifice for future generations?
How about as much as past generations gave us?
Re. 15-Brett states that the idea of infinite economic growth is
absurd. Nonsense! Economic growth is a function of the human mind
and its capacity for knowledge. It’s as large as the universe!
Peak oil in a few years will be as important as peak whale oil 120 years ago. Environmentalists frequently sound like Malthusians
full of todays limitations as absolutes.
Society will always change, the climate will always change, and the
human mind will find a way to adapt and prosper.
25 May 2008 at 12:30 AM
[#18] “Yes it’s distasteful” No it’s not distasteful, it’s folly. “Distasteful” is when you need to take some medicine or other for your future good, though it is unpleasant at the time, and you do it anyway because you know you will feel better. “Folly” is taking the wrong medicine or none at all because you don’t understand the threat of your illness, and then you die.
Climate change has the potential to change ours into a different planet, different in significant ways from the planet on which we evolved and our civilizations put root. Using modern concepts of economics IN ANY FORM to weigh a problem of such vast and terrible scope is folly. Just because the last 200 years was all about economics does not alter the looming reality that economics as we have recently known it might be at an abrupt, perhaps permanent, end.
We need a new language for this. I am told that the Inuit have 20 different words for “snow”. Modern thinkers seem to have a very tiny vocabulary for discussing “progress”, stuck in a linear space of percentage increases and per capita consumption. This even at the moment that we desperately need to define the idea of progress in a much more rich language to include resource progress, individual progress, spiritual progress, sustainable progress, retro-progress, intelligent progress, deranged progress, progress that-hurts-us-now-but-preserves-future-generations, progress-that-builds-on-past-lessons, JIT-progress, and what have you.
Economics simply cannot be about growth of the GDP when the carbon output of the GDP is poised to erase our very civilization. There is no product, gross or domestic or otherwise, once Earth is a different planet and humanity is one moving, wretched mass of refugees.
cb
25 May 2008 at 12:55 AM
I’ve read Stern [which uses numbers from IPCC, which came from World Bank, etc], the MIT study and its Appendix C, and the NRDC report, among others.
People seem to:
A) Specify a scenario, and project GDP forward by applying a CAGR, usually around 2% [but varies]. At 2.2% (as in NRDC], US GDP would be ~7X larger in 2100 than now.
B) Then costs of mitigation or damage are computed in some bottom-up manner.
C) Then C = B/A by year gives the fraction of GDP.
CONCERNS:
The standard economic projections appear to totally ignore Peak Oil+Gas. Contrary to them, a few biophysical economists seem to think that economic growth is actually influenced by work = efficiency * energy, and that in fact, that’s a pretty good model for the 60% of GDP growth usually attributed to “Solow Residual” or “Total Factor Productivity”. If that makes any sense, the downslide of Peak Oil+Gas over the next few decades might just impact that nice growth CAGR. For example, the last page of Ayres shows 3 curves depending on efficiency. [Effective message to US: either get more energy-efficient (and build renewables) *really* fast or see GDP stop growing and even shrink. Other message: stretch oil&gas as far as we can.]
We all know that predicting trends based on past trends can get clobbered by surprise inflections in underlying factors if they are not properly accounted for. For instance, if one ignores laws of physics, one can predict Moore’s law goes on forever … but nobody in the semiconductor business does that.
We’ll probably find out by 2020 whether the happy CAGRs are real, or whether the biophysical economists have a real issue.
The other concern, as with the NRDC, is that the damage costs might be substantially underestimated. Local government people around the San Francisco Bay Area already have concerns with preparation for sea level rise. We have a massive amount of infrastructure built at or near sea level, and built with $20/bbl oil, i.e., cheap energy.
In 2100, if someone is building dikes or steel+concrete sea walls, they will have little or no petroleum. They will have electricity and biofuels, but phyiscal work gets really expensive, especially when you don’t know how high the water is going to get before it stops - it’s *not* quite like the Netherl;ands dike-building efforts.
So, it may well be that later damage costs are underestimated as well, because the *replacement* costs of coastal facilities will be very high, as will costs of water infrastructure, and pumps, and such.
So, especially for the economists out there:
a) Can you help me understand why the standard GDP models are immune to peak Oil+Gas?
b) Why won’t post-petroleum damage costs be much higher?
25 May 2008 at 1:12 AM
Dyson is a visionary, I like his ideas.
A tree that is a biodiesel pump in your back yard ? that I want !
Modify the Maple Syrup trees ?
Carbon credits pumping cash back ?
Biodiesel trees will need a lot of CO2
Greenhouses run over 1,000 ppm CO2.
The last thing you want is to make CO2 biologically unavailable.
25 May 2008 at 4:00 AM
Cat Black above, said it so well, I just want to repeat his/her words:
“Dyson suffers from the same mental blinders as a lot of dreamers, who can only dream of a better world. I suppose this is entangled with the Judeo-Christian view that “things will get better just you wait” thing, played out in the world of physics and science for the pleasure of a secular audience. Of course, 50 years of seemingly endless progress would seem at first to prove them right, it really is upwards all the time. Until one realizes that the progress was based on the unleashing of stored energy to drive the pistons of industrial might, and almost nothing more.
Successful dreamers, the ones who make a living at selling dreams, usually have a happy vision to share. They will write you a book about that. People like to buy their books and read them to feel better about the vague terror that is creeping into their days and nights. Nobody wants a sad book about nightmares, catastropie and individual responsibilty. Nobody wants to think about rolling back 600 years of “progress” to some other world that feels uncomfortably like the Middle Ages. No not that, surely technology will pull us out of this. Think Happy Thoughts. Buy something shiny.
We are asleep, walking. Almost 7 billion, oblivious. Genetically engineer us a clue if you can.”
Time will tell. Not the magazine Time, but time itself. Writ large.
25 May 2008 at 4:41 AM
[Quote]
“that the business-as-usual he’s defending would release almost as much carbon to the air by the end of the century as the entire reservoir of carbon stored on land, in living things and in soils combined. The land carbon reservoir would have to double in size in order keep up with us.”
[/Quote]
Have I have missed something? Because, presumably this means that assuming the “business-as-usual” scenario, that the carbon off-setting industry, is more about off-ripping and making promises that are impossible to keep. All in-order to make money while deceiving the public that offsetting offers a realistic prospect of successfully combating climate change.
Of course this ignores the following probable but naive mindset: “So I can now increase the size of my carbon footprint, because It’s all offset!” - which would be even worse than the “business-as-usual” scenario.
25 May 2008 at 7:03 AM
One (of many) questions that must be answered is, “Is it possible to sustain the increasing wealth of a growing world population and not damage the natural environment past the threshold where it can support life?
Our economic system is based on unending growth, and as world population increases the only way that can be done is by increasing the rate at which we use natural resources.
The “reduce, reuse, recycle” approach can help, so can more efficient manufacturing and advancements in material sciences (allowing fewer resources to be used in manufacture and production of products of the same or better quality).
But can anyone doubt that if it is business as usual for the forseeable future that we are headed for a Malthusian limit?
That limit, if reached, will of course hit some sooner than others. The others are the “haves” while that “have nots” will be the first reduced to a subsistence existence. Maybe we are seeing the approach of that limit now?
Is a “steady state” world economy possible? I do not know. But you would think that obviously intelligent, informed(?) and educated people like Dyson would acknowledge there is a problem that can be fixed.
If my son and daughter-in-law choose to have children they deserve a world that is as good as we can hand to them for their years of stewardship.
25 May 2008 at 7:25 AM
Conrad Lautenbacher, head of NOAA, continues to misrepresent the science of global warming to lay audiences, in what he said recently, below:
Whether there is warming or not, no one doesn’t want solid, scientific information,
NOAA chief urges creation of a new National Climate Service to coordinate information
By RANDOLPH E. SCHMID , Associated Press, May 13, 2008
http://www.startribune.com/nation/18899439.html
25 May 2008 at 7:56 AM
I am a great fan of Freeman Dyson, but in this instance I believe your comments are largely correct. He has some imaginative ideas, but they are for the future and they may be needed to get to James Hansen’s goal of 350ppm of CO2. But as Joseph Romm points out in “Hell and High Water” waiting for tomorrow’s technology to solve today’s problems is an invitation to mass extinction. We will have to go to a WWII footing if we are to have any chance of saving the planet. There is no way we can convince the rest of the world that we believe this to be a serious problem without substative action on our part. “It is hard to preach abstinance while sitting on a bar stool.”
25 May 2008 at 8:09 AM
Why should we turn to economists for this? They are the ones who have been discounting environmental damage for well over a century. The paradigm of eternal growth is outright insane, and the dismissal of society-wide negative impacts has been disastrous time and time again. Any attempt to assess the “economics” of climate change should be scientific. It should not be the god-awful pseudoscience that has helped bring us to the climate problems we have today.
25 May 2008 at 9:43 AM
On a related note, there is an article on the Economics and Ethics of Climate Change in the June 2008 Scientific American, authored by John Broome. He discusses the economic forecasting of the impact of global warming by N. Stern and by W. Nordhaus. The author points out that economists cannot avoid making ethical choices in formulating their advice. It’s a good article, but I was hoping for a summary of the physical science, something SciAm would do well. As for Dyson, he’s a big hero of mine. Nice to see he’s doing well at 85. And I love the idea of those carbon-eating trees. It’s obvious that the cheapest solution would be a major breakthrough in technology.
25 May 2008 at 9:48 AM
Re # 22 Fred Jorgenson:
” the best allocation of resources belong to economists and politicians that represent the public, balancing current and future human needs.”
I suppose it depends on which humans you are referring to. Seems to me the political fortunes of the decision-makers tend to play a major role in this.
25 May 2008 at 10:51 AM
Let us not forget that very soon we will be developing some sort of quantum nano technology which will make all our dreams come true instantly at no cost whatsoever so therefore we can do anything we want right now.
Meanwhile, I am a Sober Minded Realist and all you Gloomy Enviro-Whackoes need to chill out.
25 May 2008 at 10:58 AM
Before the experimental proof of Dyson’s favoured Quantum Electrodynamics, what would have been the result of a cost-benefit analysis using a 4% discount rate? My guess is that noone would have bothered continuing work on verifying QED. The reason is simple: the consequences of successful experiments, in terms of economic benefit, would have been unimaginable to economists of the day. The costs, however, would have been easier to determine. A similar situation exists with QCD, extra-solar planet discovery, Mars missions, GM, NASA, CERN, CSIRO, and so on.
While a discounting argument is helpful on shortish time scales during which technological change is guesstimatible, it is unfortunately questionable (ie “the science is not settled” on discounting methodology) over long run time scales involving inter-generational populations - IMHO.
25 May 2008 at 11:07 AM
In response to that article’s #4 point.
Whenever someone says something silly like that, I point out that there are now ZERO scientific institutions that say that manmade actions aren’t a primary cause of the warming we’ve experienced in the past few decades.
Even the American Association of Petroleum Geologists now agrees.
http://greyfalcon.net/whatwouldittake
If there was so much disagreement, that person should be able to find at least 1 institution in the entire world that says otherwise.
And if they can’t find one, then you’ve got to admit, that’s a pretty overwhelming agreement within the scientific community.
25 May 2008 at 11:58 AM
Re Fred Jorgensen @ 22: “How much should we sacrifice for future generations?”
Verses how much should we sacrifice future generations?
25 May 2008 at 12:19 PM
#24, John Mashey: The models _do_ have finite resources of oil and coal. If you look at page 20 you will see that in the reference case, oil and coal prices go up over time despite the improvement in technology happening simultaneously. What you do see is a lot of oil shale and tar sands use. Also, biofuels start being used even in the absence of a carbon price.
Mind you, one can argue that the reference reserve of oil and coal may be too large. And certainly, if today’s oil prices hold for the next decade it will be evidence that the model severely underpredicted oil prices in general. Though one can also argue that we don’t see investments in oil shale and tar sands because of anticipated future climate policy.
In any case, returning to Freeman Dyson’s vision: what he doesn’t get is that without a carbon price, there is no more incentive to develop good carbon eating trees than there is to reduce emissions. So why not place a carbon price on society (either through a tax or a cap) and let society solve it either through bioengineering, conservation, or renewables? Rather than trying to pick the winner now and leaving it up to government to develop it…
25 May 2008 at 12:30 PM
re: #16
==Biochar seems to be an important process in permanently removing carbon in the atmosphere while increasing crop/plant growth:==
But what if Biochar does not work?
What if it has the reverse effect?
http://gristmill.grist.org/story/2008/5/2/211036/2352
http://gristmill.grist.org/story/2008/5/21/15367/8993
25 May 2008 at 12:33 PM
Re, Re#9, David, do you mean conventional oil or all oil inlcuding the so called unconventional heavy oils also known as tar sands and shale ? Some people are stating that estimates here are in the 3 to 5 trillion barrels and alos hard to extract will not stop people trying at $200 a barrel of oil when the light crude begins to top out.
[Response: I meant conventional. You’re right, if you count the tar sands and what not the number goes up considerably. David]
25 May 2008 at 1:24 PM
‘If you look at page 20 you will see that in the reference case, oil and coal prices go up over time despite the improvement in technology happening simultaneously. ….”
In which year of his model does the barrel price hit $138?
25 May 2008 at 1:28 PM
The Scientific American article referred to in #32, + discussion, is at:
http://www.sciam.com/article.cfm?id=the-ethics-of-climate-change
I too am bothered by the use of discounting in the GW context. John Broome in Sci Am begins his explanation of the logic of discounting by asserting that: “The costs of mitigating climate change are the sacrifices the present generation will have to make to reduce GHGs”. This seems incorrect to me. Surely we should be considering the GHGs we’re emitting now to represent a growing debt that will have to be repaid in the future (in economic losses due to rising sea-levels etc and/or the costs of actually removing GHGs from the atmosphere), and seeing whether we should discount this debt. Since it’s not usual to write off international debts (e.g. government bonds) even when the generation that created them and benefited from the expenditure has passed away, an analysis based on the idea of a debt being run up by the present generation suggests to me that we shouldn’t be discounting at all. Surely the idea that we can freely emit GHGs now because in the future we’ll be rich enough to deal with the consequences is like the pre-credit crunch logic that we can all afford to take on huge mort-gages because our houses will be worth more in the future. Debts have a nasty habit of getting out of hand.
Prompted by the Sci Am article, I posted more detailed discussion of this idea a few days ago at:
http://unchartedterritory.wordpress.com/2008/05/21/sternly-bemused/
and
http://unchartedterritory.wordpress.com/2008/05/23/still-sternly-bemused/
25 May 2008 at 2:48 PM
Cat Black (23) says, “[#18] “Yes it’s distasteful” No it’s not distasteful, it’s folly. “Distasteful” is when you need to take some medicine or other for your future good, though it is unpleasant at the time, and you do it anyway because you know you will feel better. “Folly” is taking the wrong medicine or none at all because you don’t understand the threat of your illness, and then you die. …”
Your rage is blinding. That’s not what Lou said at all.
25 May 2008 at 3:04 PM
Like Lou above, I also am a card-carrying economist, so you may want to discount what I say (ha ha)…
For the people who think economists have nothing to contribute to this issue, I guess all I can do is remind them that the various solutions being proposed to tackle climate change involve things economic. E.g., a tax on carbon or a cap-and-trade program. The hard sciences alone don’t tell us how many dollars per ton a carbon tax should be, just as it would be ridiculous for an economist to try to calculate that figure without asking help from the climatologists.
As far as discounting for future generations: You need to use a discount rate to make sure you’re helping them as much as possible. It seems that some posters here are objecting not to the discounting per se, but to the conversion of everything to dollars and cents. I have no problem with that objection.
However, if we’re going to quantify future damages from climate change into dollar terms, then we need to discount those numbers to sensibly determine how much it’s worth spending today to try to mitigate those damages. The reason is simple: We could take the money and invest it, giving a larger inheritance to future generations. Discounting makes sense even if the recipient isn’t alive yet. Presumably our grandkids would rather get something worth more than something worth less. And so that’s why it would be silly, say, to spend $900 today to avert $1000 in damages in the year 2100. It would make more sense to take that $900 and buy T-bills, and keep rolling them over for our descendants.
Again, if that talk sounds crazy to you, because “you can’t put a number on climate damage!” OK fair enough. But your problem isn’t with the discounting per se.
[Response: My problem is with discounting over long time frames, longer than a human lifetime. What if the ancient Greeks two thousand years ago had come up fossil energy, allowing them to thrive for a couple of hundred years? Would we thank them for leaving us a degraded world? Or do you think there would be some bank account somewhere where we could get all the invested money back, with interest, in compensation? David]
25 May 2008 at 3:11 PM
I have been hoping that RealClimate would discuss the ideas of William Nordhaus. Unfortunately this review pays more attention to easy targets such as carbon eating trees and Richard Lindzen.
Dyson does a reasonable job on Nordhaus, although I agree that the rest of the review is largely, well, fanciful, factually inaccurate, or maybe the rather unprofessional last word that David used. Dysan does not mention that Nordhaus proposes a $30 per ton carbon tax starting now, increasing to $100 per ton. This is hardly the position of a denialist; it is a lot more than anyone is doing now. It is totally wrong to place him in the same category as Lindzen.
A serious critique of Nordhaus will ask how the costs of climate change are calculated, on which climate change scenario are they based, what are the uncertainties, etc. There is a problem with limiting the timescale to a century when the more serious effects of climate change take place after that. The choice of discount rate can be questioned, but I think it is unrealistic to wish it away to zero, as Stern did.
Nordhaus provides us with a model to evaluate climate change strategies. It is an improvement over the hand waving that is usually done. Climate science uses models to make more rigorous predictions, Economics must do the same. We can criticize the content of the models, but we should not reject the competence of climate science or economics to do their respective jobs.
I hope that RealClimate will make a more serious attempt to deal with this issue. Perhaps you can invite Nordhaus to do a guest commentary.
[Response: There is a lot of guesswork involved in that sort of modeling, but the really big question, as I understand it, is the issue of discounting. David]
[Response: Actually, discounting is not the whole picture. There is considerable difference in the ways damages are calculated (they were higher in Stern). Mike Hanneman from Berkeley has many interesting things to say about this. - gavin]
[Response: So do Don Brown, Nancy Tuana, and others associated with the Penn State Rock Ethics Institute and climateethics.org. For those interested in such matters, I would urge you to check out the site. - mike]
25 May 2008 at 3:34 PM
Tim Joslin (#42): The theory behind discounting is that you are choosing between two uses of your dollar: do you spend the dollar mitigating climate change today, so that you save X dollars in some future time period, or do you use the dollar to invest in some other area with some payback, such that you will be Y dollars richer in the future.
In this case, the future generation will be both the recipient of the X dollars of saving resulting from mitigation, or the Y dollars in income generated from investment, and therefore, there are times when you want to incur a debt of climate damage because of a benefit of a stronger economy.
Of course, this includes a number of assumptions:
1) a dollar saved by not mitigating today does indeed lead to greater wealth in the future. It might also be spent on immediate pleasure: eg, I will pay you tomorrow for a hamburger today (particuarly apt given the role that our demand for beef plays in GHG production). And it has to lead to greater wealth for the population incurring the damage (eg, no fair having America save by less mitigation at the cost of Africa in the future having famines).
2) that mitigation is actually expensive. Some would claim that energy efficiency will actually pay for itself.
3) that the damage in the future is not of catastrophic proportions: eg, it isn’t acceptable to use discounting to argue that saving 1 billion dollars today, at a 5% discount rate, is worth the destruction of the economy in 400 years (if that future economy is worth less than 300 quadrillion dollars). I’ve seen suggested in at least one place (Weitzmann, perhaps?) that the discount rate should be tied to the overall rate of economic growth of the economy: for small perturbations, therefore, assuming the world economy grows at 4% a year, then you discount at 4% per year. However, for perturbations that actually reduce the economic growth rate, you have to start changing the discount rate: if the economic growth rate turns negative, you’d actually start reverse discounting. And of course, if you think that the world economy cannot sustain 4% growth forever, then you’d have to adjust the future discount rate appropriately.
4) That you appropriately value natural resources. What’s the economic value of a lost mountain ecosystem? Not only today, but in 100 years, when presumably the population will be more ecologically sensitive than today’s, if we extrapolate environmental trends?
25 May 2008 at 4:42 PM
re #45, Blair, you state re Nordhaus and his proposals for substantial carbon taxes, that “this is hardly the position of a denialist”.. Quite right, but who has indicated that Nordhaus is (or might be) a “denialist”? I don’t see any indication of that in the article at the top of this thread. I haven’t read Nordhaus’s book (that Dyson reviews), but the question that Nordhaus addresses relates to some sort of “cost-benefit” analysis that incorporates consideration of present costs and benefits and those of future generations. That all seems very reasonable and is exactly what economists should be considering. There probably aren’t any easy answers.
In Nordhaus’s recent Inagural Article in the Proceedings of the National Academy of Sciences [Geography and macroeconomics: New data and new findings; William D. Nordhaus Proc. Natl. Acad. Sci. USA 103, 3510-3517 (2006)] he concludes:
“Finally, using the G-Econ
data to estimate the impact of global warming, we estimate that an
equilibrium doubling of CO2-equivalent greenhouse gas concentrations
will have significantly more negative impacts than was
found in earlier studies.”
That also doesn’t sound like a “denialist”!
I agree with you that it would be valuable to have a “guested article” by Professor Nordhaus or other economists. Clearly these are issues that physical scientists can impact by careful presentation of data and interpretations concerning changes to the physical environment in a warming world. While the economic impacts might appear obvious in a qualitative sense, policy decisions require an interplay of expertise involving physical science and economic science (or “science”!) and it would be very useful to have some expert insight into the latter as a guest article here.
25 May 2008 at 4:48 PM
Correct me if I’m horribly wrong, but don’t you get increased economic activity from manufacturing and selling compact flourescents, solar panels and wind turbines?
Why can’t mitigating climate change and GHGs produce economic stimulus, rather than be a drag on the economy?
25 May 2008 at 6:01 PM
re: #38 marcus
“#24, John Mashey: The models _do_ have finite resources of oil and coal. If you look at page 20 you will see that in the reference case.”
a) can you point at exactly which page 20 you mean?
b) But, when I said the “standard economic projections appear to totally ignore Peak Oil+Gas”, maybe that was not sufficiently clear, although I thought there was enough context. Let me try again:
The *economic projections* (of GDP) appear to just use some more-or-less constant CAGR… out through 2050 or 2100, whether they say anything or not about finiteness of resources. That seems to imply that real GDP grows with zero impact from having to redo the majority of the world’s energy infrastructure in the next century, just to keep the energy/person from dropping, and world GDP will be 7X higher in 2100. I’ve cited one of the economists who does think that (work = energy * efficiency) matters to GDP.
So, let me try asking one more time, especially of the economists here:
A) DO people (especially the economists) believe that US (world) GDP growth over the next century is essentially unaffected by Peak Oil+Gas? I understand that seems to be the mainstream position, and I do not lightly reject that.
B) If so, can you explain to me why Ayres+Warr, and Charlie Hall are wrong in thinking that energy (or work = energy*efficiency) actually matter for economic growth? Or what high-EROI energy sources you’re expecting to seamlessly replace fossil fuels? I.e., see Charlie Hall’s Balloon Chart on EROI. Two of our friends are ex-Chairman of Shell and ex-Vice-Chair of Chevron, and *they* are seriously worried about what it will take to replace oil fast enough.
=====
MY FEAR IS THAT THE REAL ISSUE IS:
Arguments about discount rates and mitigation cost percentages are less important than:
“Can we go all-out on efficiency and renewables *fast enough* to keep world (US) real GDP at least flat… and not end up, out of desperation, burning a lot more coal to keep the lights on and do CTL synfuels … with bad results.
A really bad scenario could be:
a) We burn fossil fuels *as fast as we can*, rather then *investing* them.
b) And then, it turns out, energy actually matters to real wealth, and the people of 2100 might end up being *poorer* than now, and have to deal with worse climate change.
Anyway, I’d really love for somebody to ease my mind, with *serious* pointers to energy/economics data/papers on this. Thanks.
25 May 2008 at 6:04 PM
Lamont (48) wrote “Why can’t mitigating climate change and GHGs produce economic stimulus, rather than be a drag on the economy?” It can. I opine that it largely will be, due to ingenuity and innovation.
25 May 2008 at 6:45 PM
Marcus (#46), I agree with most of what you say, especially your point 4, which implies the environmental costs of GW damage will actually rise in real terms (a negative discount) and is what we see in practice: e.g. just from the news this weekend, Scotland is prepared to pay to reintroduce beaver after 400 years, and Japan is prepared to recreate wetland from productive agricultural land to reintroduce oriental white storks.
Re. your point 1: the problem is that the “$s saved by not mitigating” are in fact being spent largely on consumption, rather than investment. Your point 2 is valid, of course, and your point 3 is particularly important. If GW ever destroys fixed capital faster than we can create it then we’re in big trouble. And this is entirely feasible if you consider the potential for sea-level rise to lead to the loss of dozens of large cities. OK, it’s not GW, but to illustrate the point, I read that the recent Sichuan earthquake has destroyed 5m buildings - how many months or even years of Chinese construction does this represent?
But my main point is that talking about “mitigation costs” is (IMHO) incorrect. Costs to reduce emissions is a second order term. It’s like my girlfriend telling me to slow down on the motorway (=freeway) and me replying that I’ll stop accelerating. In this analogy, it is my speed per se, not how rapidly it is increasing, that is incurring the cost to me of my girlfriend being annoyed. Hence I’m suggesting it would be better to model GHG emissions as a debt, rather than talk about the costs to reduce the rate at which the debt is accumulating.
Consider Bob Murpy’s numbers (#44): if I have $1400 today I could (A) spend $900 on fossil fuel to heat my home and have $500 left plus a liability of $500 worth of environmental damage at today’s prices that will eventually occur as a result of my GHG emissions or (B) spend $1200 on wind-generated electricity plus $200 left over. My argument is that the $500 worth of damage will increase with GDP, since economic damage caused by GW will be proportionate to the total GDP whenever it occurs (e.g. consider that Stern discusses insurance losses in terms of total global GDP). As the $500 I invest will also increase with GDP, I actually have $0 left in case A. If I’m held accountable for my environmental debt, I’d be better off in case B when at least I’d have the investment proceeds of $200.
Blair Dowden (#45) notes the “problem” of limiting the timescale to a century. Not only is it wrong to assume an arbitrary cut-off point before the GW problem is actually fixed since the climate will still be here, I suggest that the available precedents suggest no time-limit can be assumed for environmental debts if these are accounted for similarly to any other kind of national (or institutional) debt. I’m sure they told me in school that the country is still paying for the Napoleonic Wars (I’m in the UK). I now doubt that this is literally true in a direct sense, but even if it’s not the case that the war bonds issued then are still in circulation, the debt has been rolled over since, or at a minimum the UK has been able to borrow less because it was paying the coupon on those bonds. The point is that the precedents are for perpetual debts. The national accounts of developed nations (& many other classes of institution) have been continuous for centuries.
Also (#45) I understood Stern does not use a zero discount rate, but actually just a “low” one (1.4%). I’m questioning whether the rate should in fact be zero (actually negative because of Marcus’ #46 point 4, as already mentioned, but I don’t want to overplay my hand!).
In summary, it seems to me that talking about “mitigation costs” accepts the classical economic position that environmental externalities can be ignored, which we now know is too simplistic. The idea of “mitigation costs” implies there’s a cost relative to the default case, which is that e.g. GHG emissions are free. This is incorrect - the default case involves costs (and always has done - GHGs from 100 years ago are contributing to our problems, albeit that they are swamped by more recent emissions) that are not at present being fully accounted for. What we have now realised is that we need to internalise these costs and attribute them to those economic activities causing environmental damage, e.g. by imposing carbon taxes. It therefore seems to me that rather than discussing “mitigation costs”, we should be talking about the “carbon debt” being accumulated by those economic activities resulting in GHG emissions.
25 May 2008 at 6:46 PM
I just received my copy of the New York Review with the Dyson article last night and didn’t get to read it until this afternoon.
I was happy to see that Real Climate responded to the article so quickly, but I urge Real Climate to send its post to the New York Review as a letter. The journal has always printed well thought out responses to its articles and offers the writer of the articles a chance to respond.
This would be an excellent opportunity to provide information to those who had just read the Dyson article and might be convinced by it. Also, it would be good to see Mr. Dyson defend his ideas. They are interesting, but not very tightly rooted in any probable reality. I am reminded of a comment by Isaac Asimov that, by World War II all science fiction writers had predicted fully functioning humanoid robots, and none had predicted the computer.
Thanks for an excellent post.
25 May 2008 at 8:47 PM
David wrote:
My problem is with discounting over long time frames, longer than a human lifetime. What if the ancient Greeks two thousand years ago had come up fossil energy, allowing them to thrive for a couple of hundred years? Would we thank them for leaving us a degraded world? Or do you think there would be some bank account somewhere where we could get all the invested money back, with interest, in compensation?
If the ancient Greeks had attained our current level of technology, then right now I think we would all be thousands of times wealthier than we currently are. If the Earth were a bit warmer than it is right now, that would definitely be worth the extra wealth; everyone would turn up the AC in his or her hovercraft on the way to his or her 10-hour-per-week job.
Yes this is a fanciful scenario, but only because you gave me a fanciful assumption and asked about its implications.
There are billions of people who right now lack basic utilities like clean drinking water and dependable electricity. If they are encouraged (forced?) to try to leapfrog over fossil fuels and go right to solar or whatever, their development will be hindered. And hence their grandchildren will be much poorer than under the business-as-usual case.
I used the T-bill example just to make the point, but it doesn’t rely on direct lineage. E.g. you and I benefit right now from the capital accumulation of earlier generations. When people work with tools and equipment, their labor is much more productive than if we all had to start from scratch with just nature and our bare hands.
Obviously, if you think that business-as-usual will lead to catastrophic damages, then a rational response would be to limit GHG emissions in the present, notwithstanding the high cost. But I’m just saying, the way to handle this in economic terms is to realize that the future damages are so high (measured in $$) that, even with discounting, they are still higher than the present costs of mitigation.
One other point: I want to second the statement of a previous poster, that yes Stern actually does discount future climate damages. This is because of the small probability that those generations won’t exist to enjoy the fruits of our current, costly mitigation efforts. E.g. there could be nuclear war, an asteroid could blow up the world in 2025, etc.
But Stern does not allow a “pure” discount rate, where the utility of future generations is discounted simply because of its futurity. So that’s why his overall discount rate is lower than Nordhaus’, who bases his on the market’s observed discount rate.
25 May 2008 at 8:53 PM
David Benson wrote:
Lamont (48) wrote “Why can’t mitigating climate change and GHGs produce economic stimulus, rather than be a drag on the economy?” It can. I opine that it largely will be, due to ingenuity and innovation.
I agree that human ingenuity will always find ways to make a given situation better. But the point is, requiring a reduction in CO2 emissions takes away our range of options. Other things equal, it necessarily makes us poorer.
Now of course, most posters here would say other things aren’t equal. They would say the costs of mitigation are outweighed by the avoided damages of further global warming.
I’m not arguing that point right now. I’m merely saying that it’s not correct to, say, count up the “green jobs” as a benefit of a carbon tax or cap-and-trade program. This is because you would have to then include all the jobs that were destroyed (in SUV manufacturing, coal-fired power plants, etc.) by those measures.
If the government passed a law forbidding the production of anything that was yellow, that could only make us poorer. By the same token, if the government says industry has to reduce its carbon emissions by x% next year, in and of itself that makes us poorer.
25 May 2008 at 9:22 PM
re 42, 44, 45, 46, et al. This demonizing of economic discounting is simply astounding. First, for the record, it is accountants who (must) convert everything to dollars and cents, or otherwise ignore it. Economists take a much broader view and include qualitative stuff. They do look at things from an economic point of view — assessing costs and returns, e.g., though not always in monetary units.
Bob Murphy explained discounting in rudimentary easy to understand terms that evidently went flying over many heads here like a jet plane. From what I read here everyone hates discounting because of their presumed outcomes or the guessed-at assumptions that they think might be made by the discounters, as Gavin implied or as Marcus did all over the place (I think). Or like David’s world disaster stemming from the Greeks living it up for 200 years on fossil fuels, though I have no idea what he meant. Marcus says, “…a dollar saved by not mitigating today does indeed lead to greater wealth in the future. …” It should read a dollar saved by not investing in this or that today will give you a dollar + NN cents to invest in a later this or that, which if then costs less that $1.nn proves to be a good deal. But you can’t spend the dollar on a hamburger.
Simply asking the simple question, “what does it cost” really does not taint the whole process in the least. I agree the assumptions should be both quantitative and qualitative and realistically account for all factors and effects in the assessment.. But demonizing “discounting” per se is somewhat like outlawing multiplication.
[Response: I meant that I think discounting breaks when it is applied over time spans long enough that the people who pay the eventual costs in the future are not the same as the people making the decision today. I don’t think people a thousand years from now would benefit from our maximizing our profits, the way that the discounting theory would seem to suggest. Instead I think it’s pretty obvious that they would be harmed by us not cleaning up our messes. I think that reaping benefits now by making a persistent mess is unfair to people in the future, no matter what your discounting may say. It all sounds like so much trickle-down, to me. David]
25 May 2008 at 10:02 PM
re: #51 Tim
“My argument is that the $500 worth of damage will increase with GDP, since economic damage caused by GW will be proportionate to the total GDP whenever it occurs (e.g. consider that Stern discusses insurance losses in terms of total global GDP).”
I’m not sure that’s a completely correct interpretation: I think the damage percentage is likely to be higher, and the cost higher, but for different reasons, notwithstanding Stern Section 19.2.
Please look at the first few paragraphs of post #24. As far as I can tell, Stern does something similar:
a) P.183, footnote 35 says “Extrapolated version of IPCC’s A2 scenario, characterized by annual GDP (per capita) growth of about 1.9%… Annual average population growth is about 0.6%.” I.e., this would be 2.5% total GDP. {I talked to Bert Metz of IPCC, and he said they just got their economic projections from the usual palces like World Bank.]
b)) Some costs may be proportional to GDP.
c) Some costs may be bottom-up rollups of various costs, i.e., like the NRDC report I mentioned. For instance, Stern says “Defending New Orleans alone from flooding during a Category 5 hurricane is expected to cost around $32B.” I don’t think that cost necessarily is proportional to US GDP, although it might well occur that if the cost is that high, but US GDP is not high enough, it won’t be done. Likewise, the costs of managing sea level rise in the SF Bay Area are likely to be whatever they are, rather than just be a percentage of US or world GDP.
d) Anyway, in some cases, costs are *expressed* as percentages, but were derived as c) over a). If a) turns out to be lower:
Category b) will have same percentage, lower total.
Category d) will have same value, higher total.
My other concern is that a great deal of adaptation needs *energy*, and especially pushing dirt and building with steel and concrete, and such activities seem like they’re going to cost more, and are not amenable to Moore’s Law cost reductions.
25 May 2008 at 10:10 PM
Lamont Says:
“Correct me if I’m horribly wrong, but don’t you get increased economic activity from manufacturing and selling compact fluorescent, solar panels and wind turbines?”
This is a common economic misperception because it does not take into account opportunity costs. For example, a boy that breaks the cobbler’s window creates economic opportunities for the glassmaker but that is a false benefit because this money would have been spent by the cobbler on something else.
The economy would have been better off if the cobbler had invested the money in light blubs that would allow him to work later. This would still create some economic opportunities for the glassmaker but it would also improve his productivity and allow him to provide shoes at a lower cost. Repairing a broken window simply forces him to increase his prices to recover the lost money.
Artificially increasing the cost of energy will create economic opportunities for some but the total wealth of the society will go down because their is less money to invest in things that actually improve productivity.
26 May 2008 at 1:12 AM
To build a little on Tim Joslin’s interesting post above, there are two key characteristics of the “climate problem” that conventional economic analysis seems to find difficult. The first is the climate commitment - the fact that there are at present unquantified but inevitable climate changes built into the system as the planet gets back into energy balance. The benefit of mitigation only begins to have effect 20 - 30 years after the expenditure. In that sense, spending on mitigation is rather like making a term deposit in the bank, but with no knowledge of the final payout except a (currently) rather vague notion (in the political domain) that it will be worthwhile. Leave aside the difficulties of dealing with the longer/est term damages. Until we can get a good handle on the near term, it will remain difficult to make good policy decisions. The worst case remains that the tough decisions will not begin to be made until the damage is too obvious to ignore, and that’s when the climate commitment really comes home to roost.
The other issue is to do with the essentially one-way nature of the changes we can see coming. Getting back to 350ppm as Hansen suggests might enable us to stabilise the climate system, but it will not be the same climate we’ve enjoyed over the last few thousand years. We may avoid the worst outcomes, but the damage will still be large. We will not be able to “restore” the Greenland ice cap in any meaningful way, though we might be able to keep a few polar bears alive on an ice reserve in the far north. And how do you put a price on the presence of an ice cap, or a cost on its loss? Clearly, there has to be some concept of natural capital, but as we’re already spending it instead of living (sustainably) on the interest, we have a bigger problem. The “triple crunch”, I believe it has been called: the combined impact of resource depletion (in its widest sense), population growth (9 billion by 2050), and climate change.
Until we get economic assessments that deal with all of those at the same time, we are shooting in the dark.
26 May 2008 at 1:40 AM
Discounting and uncertainty: a non-economist’s view by Steve Sherwood can be found here:
http://www.springerlink.com/content/j05kv97607nn24rq/fulltext.pdf
26 May 2008 at 1:48 AM
I had a read of Dyson’s article, but haven’t read Nordhaus’s book, so I am not sure how accurate Dyson’s interpretation of Nordhaus’s book is. In a passage from a different book written by Dyson he claims that we should not be too worried by climate change because there are significant uncertainties from getting information from global climate models. What Dyson does not understand is that these uncertainties are actually a reason for more action on climate change. The possibility of low probability catastrophic events, or climate sensitivity being significantly greater than the median predicted value, leads to expected costs that are much greater than would be predicted by conventional cost benefit analysis. As Joe mentioned, there has been some important recent work in this area by Marty Weitzman.
Both the role of uncertainty and an ethical approach to discount rates (where the value of someones life in the future is not significantly less than the value of someones life during the present) undermine Nordhaus’s policy gradualism. There are also uncertainties associated with Integrated Assessment Models (IAMs) such as DICE. An IAM could deal with ‘known knowns’ related to climate change, but I have my doubts about how well it would deal with ‘known unknowns’ or ‘unknown unknowns’.
26 May 2008 at 3:37 AM
JCH (#10), Australia is currently receiving more rain than at any point in the records. See the BOM website. Some areas are in drought. Our country has always had drought, and always will do. Google the ‘Federation drought’. Nothing at all to do with supposed climate change, and all to do with a government not willing to take responsibility for water supplies.
26 May 2008 at 3:42 AM
I hope Mr Dyson’s assumptions that Genetic Engineers will develop “carbon-eating trees” in a few years are based on better theoretical foundations than those of other scientists who also assumed 60 years ago that Physicists like him would crack the nuclear fusion problem in a few years !
Still waiting for the 50 year technology to come, I’m afraid
26 May 2008 at 4:24 AM
The primary cause of severe climate change is the destruction of the rainforests that form a cooling band around the Earth’s equator. The massive release of carbon that results from cutting down forest trees is far more damaging than the combined greenhouse gas emissions from coal power plants, jet aircraft, ships, trucks and cars.
This is not properganda from environmental activists and committed tree huggers - this startling information comes directly from an authorative report of the Oxford-based Global Canopy Programme, compiled by the world’s leading rainforest scientists.
The content of the report was handed onto the United Nations and adds credulence to the unprecedented consensus of more than 2000 climate scientists from the International Panel on Climate Change who all agreed, unequivocally, that the war against climate change will be won - or lost - on the trees that we grow and destroy.
Deforestation accounts for around 25 per cent or one quarter of the total global emissions of heat-trapping gases. Transport and industry accounts for just 14 per cent of human-made emissions and aviation only 3 per cent, without taking into account the direct damage of jet fumes being ejected directly into the Earth’s fragile atmosphere.
Is it time to do something?
[Response: These numbers seem off. Deforestation is about 2 Gton C per year, fossil fuel use and other industrial activities are about 8 or 9, according to a recent PNAS paper by Canadell et al, or the IPCC. Volcanic emission is maybe 0.1 Gton C. You’ve got 25% + 14% + 3% = 42%, is the rest natural according to your report? David]
26 May 2008 at 5:42 AM
Fred Jorgensen writes:
Like it or not, physical laws impose limits to growth. We can’t grow our population or our production indefinitely, and we certainly can’t do so at exponentially increasing rates. It’s easy to demonstrate that compound-interest expansion brings us smack up against physical laws in geologically very short periods of time (e.g. 7,000 years or so before population growth must stop, even if we can move anywhere just by wiggling our nose and turn stars and galaxies into food at a whim). In real life we run into obstacles long before that.
A significant fraction of humanity is not prospering. You can’t translate your experience as a middle-class North American or European into world experience.
26 May 2008 at 5:50 AM
Franko writes:
There’s no realistic prospect of that happening in less than a billion years.
26 May 2008 at 6:21 AM
(JBH) I got my B.A. in economics and spent too many years in grad school in economics; I’ve been out of economics for 30 years, so I am rusty. BUT: AFAIK Economics as presently conceived is radically, systemically flawed for dealing with “the environment” and problems thereof. Economists think of “the environment” as a luxury consumer good, when it ought to be thought of as land. Furthermore they mostly ignore land, considering it simply another form of “capital”, assuming that capital and land are perfect substitutes, when in reality they are more often complements. Often they assume waste is nonexistent, NEVER do they model cumulative toxicity. Often they assume “future technology” will give us perfect substitutes for resources that are depleted. They do not consider that “production functions” may change, may BE changed by environmental degradation. Herman Daly is the only economist I have heard of who has seriously faced the question of sustainability, and he is not widely influential.
26 May 2008 at 7:09 AM
The thing I don’t quite get is calling someone who wants to do weird stuff to get rid of carbon emissions a “visionary”, when the real excitement is in moving out of a fossil-fueled world. In computing, we have this thing called Moore’s Law, an example of a learning curve law, which gives us so many times cheaper technology every year. The same is happening with photovoltaics, as well as other renewables. When, on the other hand, you use coal and oil, the price has only one direction to go as demand increases, now that we are starting to hit limits on cheap extraction: up.
What’s so visionary about wanting to find ways to keep oil and coal front and center? I bet people there were people with really visionary ideas about modernizing the horse and buggy in 1908. Pity about that Henry Ford dude.
What we really need is to pump R&D $$ into getting solar and wind down to as close as possible to the cost of coal-fired power generation as soon as possible; limited supply is already making coal more expensive (most types have approximately doubled in cost over the last 12 months). Add on carbon taxes to keep it that way as use of renewables reduces pressure on coal demand. Advances in technology will kill the economic damage bogey. Wind and solar can get cheaper if we make the equipment better; making a better power station won’t make oil or coal cheaper.
“oil shale and tar sands”?? I’m going to invest in a horse whip factory. That was a pretty good business c. 1900. All it needs is a bit of visionary R&D on how to cut the depth of horse manure in the streets.
26 May 2008 at 7:15 AM
Economists have a preference for stating outcomes in currency, which, after all can buy everything. Since much accounting uses this approach to value lives, perhaps in this case, the inverse is appropriate, to evaluate policies by their effects on lives and deaths. Remember, that back in the 60s, the tobacco companies made the calculation that it would be less expensive in dollars to resist bans on tobacco, and there have been millions of lives that ended prematurely since. They were right.
Climate change denial and now delay follows the same course, Nordhaus’ business has not been to deny but to value inaction cheaply and encourage delay. That string having run out, he now retreats to slow action. Unlike slow food that will leave a bitter taste.
The real problem with doing nothing now will be the cost in lives not air conditioning later. That means you, your kids and the rest
26 May 2008 at 8:34 AM
The issue of economic efficiency in the context of AGW fervor is important. Do we impose economically harmful policies that have no meaningful impact on CO2 levels (Kyoto, Stern) just because it feels good to ‘do something’ and impose pain on the untenured materialistic masses?
The snarky dismissal of Dyson’s thoughts about CO2-eating trees would be more convincing if it were not delivered from the standpoint of an even more distant location in wishful-thinking land: Solutions based on massive world-wide carbon policy mandates [edit] is far more fanciful than any science-fiction style technological approach to AGW.
[Response: Obviously spending money for no good purpose is pointless so suggesting that this is what anyone is advocating is a strawman argument. As for the rest of your comment, it appears completely divorced from the reality of what anyone is seriously proposing. If you are of the opinion that nothing could possibly work and therefore there is no point trying (whether that is a carbon tax, cap-and-trade, mandates to improve energy efficiency, a switch of subsidies from fossil fuels to renewables etc.), then say so and then we can ignore you. If that isn’t the case, constructively add to the discussion by talking about what you think might work. The ‘wishful thinking’ is associated with people who think that simple criticism makes the whole problem go away. It doesn’t. - gavin]
26 May 2008 at 8:38 AM
This series of comments pretty much makes Dyson’s point. Almost all of the commenters begin with the assumption that the science is settled and then set out to demonize Dyson for claiming it is not and for pointing out that standard economic analysis (presented by Nordhaus) does not support the political agenda of Stern/Gore et al. The two points made by skeptics are: (1) the models are imprecise and fail to take into account complex interactions in the biosphere, and (2) the proponents of more radical regulatory regimes to counter global warming fail to take into account standard economic analysis of costs and benefits. Those two points remain largely unrebutted in (what sounds to me like) the quasi-religious dialogue prevalent in this forum. Suppose that you are a true skeptic trying to get to the right answer and then re-read the above posts. Believe me, you will not be convinced.
[Response: The two points you make have been quite thoroughly addressed, but you weren’t paying attention. First, regarding Nordhaus, how is it that the same people who are so ready to point out problematic aspects of climate modelling are completely convinced by the kind of economic models that Nordhaus uses? His analysis doesn’t even take the baby steps toward incorporating the probability distribution of harm that Weitzman’s model uses, and if you think that climate models have some aspects that are difficult to get right, you ought to have a look at RICE and DICE. Besides that, there’s the highly questionable issue of the discount rate assumed by Nordhaus and many other economists. David addressed that specifically in his post. Regarding the biosphere, there is in fact a great deal of work on the land carbon cycle, and Dyson is being far too much of a techno-optimist. While there is some chance that the biosphere might moderately increase it’s carbon uptake (which would somewhat delay doubling of CO2), the science also supports a very real possibility that the biosphere will turn around and become a net source of carbon, adding further to the carbon due to fossil fuel burning. That is a real disaster scenario, and it’s not one that can be discounted. It happend once before in a warming world. During the PETM, the biosphere released up to 6000 gigatonnes of carbon into the atmosphere, in the form of CO2. –raypierre]
26 May 2008 at 9:26 AM
The real problem with doing nothing now will be the cost in lives not air conditioning later. That means you, your kids and the rest.
But this is also the “real problem” with severe restrictions on the use of fossil fuels. As I said earlier, there are billions of people who don’t have what we consider to be necessities of life. They really are dying every day in ways directly traceable to this lack.
So if your criterion is, “Minimize the number of premature deaths over the next 200 years” or something like that, it doesn’t automatically follow that a massive carbon tax now is the answer. It could be the answer, but it is an empirical question. Many posters here are acting as if altruism for others necessarily implies support for radical curbs on carbon emissions, when it doesn’t. You would have to (a) care about future generations, and (b) agree with some of the more catastrophic predictions, in order to support radical measures today.
On the issue of discounting, I agree that on the face of it, it sounds crazy to even ask, “How many future people are worth one person today?” But as I tried to get across (obviously not very persuasively) in earlier posts, the fact is that the price of current purchasing power is higher than (right now) the price of purchasing power in the year 2100. So there needs to be some discount rate (and people can argue about how high it should be) to make sure present mitigation efforts are as effective as they can be.
One final note: I am not saying that the psychological motivation of most “deniers” is concern for people dying of dysentery in Africa today. Of course not. But even so, it is a fact that there are people we know are dying today from poverty. Their efforts to climb out of poverty will be hampered by mitigation proposals. So it’s not simply a matter of, “Do you value human lives?” It’s an empirical an ethical issue of, “Is allowing x more people to die for sure over the next 20 years, counterbalanced by models that lead us to believe we will thus save x+y people over the next 200 years?”
Incidentally I am not being sarcastic in writing the above. The answer may very well be “yes, it is worth it.” I’m only trying to show that it is a question of balance, to quote Nordhaus. It’s not simply, “Do I value my SUV more than 80 kids 100 years from now?”
26 May 2008 at 9:35 AM
It is very easy to put a cost on climate change. Take the maps of infrastructure location. Takes the maps of sea level rise at one metre increments. overlap the maps. Knock out each infrastructure node that gets engulfed. add in a cost to rebuild that node at higher ground. sum the costs of node builds. that’s zeroth order estimate. go to first order estimate by examining follow-on effects into supply chains etc. go to next order by … etc. every study that I am aware of has trivialised the cost of climate change.
[Response: Don’t forget that the cost of climate change is more than just in goods traded in markets. Human suffering, species extinction, loss of ecosystems — some economists have methods to put dollar values on these,but they are all questionable. Amartya Sen favors considering costs more broadly, and not just aggregating them all into currency. Take a look at some of his essays in “Rationality and Freedom.” –raypierre]
26 May 2008 at 10:10 AM
Re: #68 Yes. How good is that money when there’s nothing to buy? Check out the latest issue of Fine Homebuilding and the price builders are paying for old growth timber for its structural and aesthetic values. America’s virgin timberlands were low-valued and wasted at that time. Today, things are different. How much are our grandkids going to be willing to pay for a cool breeze, trees, (I’m channeling Pink Floyd here) and a bit of decent summer weather?
26 May 2008 at 11:18 AM
My understanding of the Project Orion was based on the suprising discovery that nuclear explosions can have a pronounced direction. The stand that one of the early explosions was raised on was almost completely undamaged following an explosion. I’m sure that the bomb makers — and the general public — had expected that the blast would develop like a star expanding in all directions at once. If the destructive, chaotic energy goes thataway then an equal force, which theoretically could be channeled, goes the opposite way. Building a ship rigorous enough to withstand the unimaginable acceleration with all of its other systems intact would probably be beyond engineering, but it’s not prima facie ludicrous.
26 May 2008 at 11:20 AM
Greg (#61):
As is made explicit in numerous reports by the Australian Bureau of Meterology (eg. here) and is very apparent in their maps and other data presentations (eg. here) the national rainfall averages obscure the fact that there have been trends toward a considerable increase in rainfall in the Australia’s tropical north west and devastating decreases in the south west and south east. This, in combination with significant increases in temperature that have increased evaporation, has lead to record minimum inflows to streams and rivers in the south, including to the entire Murray Darling Basin which is in a parless state.
If you are an Australian then I’m sure that you are aware of all this. Why try to misrepresent the dire nature of the reality with which our nation is struggling to cope? Hopefully, by some miracle all the climatologists are wrong. But it is a very slim hope to cling to. I’m no climatologist, but having intently followed the debate here and elsewhere it has become very clear to me that the climate scientists know what they are doing, are honest and that their science is very coherent, clear and supported by the data. By contrast, the denialist PR is self contradictory and is clearly spun and twisted in a deceitful attempt to confuse the lay public.
Would it not be prudent to accept that the trends we are seeing are probably the early signs of the predicted global warming, to acknowledge that it is very likely to continue to get worse in the manner that the scientists predict, and to start acting now to both limit and adapt to it?
26 May 2008 at 11:27 AM
26 May 2008 at 11:40 AM
Actually it was an economic question. The mostly coal burning north-eastern mercantile interests in the United States were opposed to the Antebellum South’s cotton trade with England. I object to your insinuation that Northern monopoly capitalism was motivated by some ulterior moral purpose of which there is no evidence.
[edit - keep on topic and don’t personalize criticisms]
26 May 2008 at 12:26 PM
Taking his lead from Nordhaus, Dyson writes, “Carbon-eating trees could convert most of the carbon that they absorb from the atmosphere into some chemically stable form and bury it underground.”
I’m sure genetic engineering holds many surprises in store for us, but, being the non-visionary type that I am, I just can’t imagine giant, non-biodegradable roots or tubers being a feasible means of carbon sequestration, even if they could be created. Aside from the logistical problems (Where would these GM-trees be planted? In place of what? At what cost, and to whom? What happens when the giant turnip-like roots start to fill up the ground, or impact aquifers, or infiltrate sewer systems?) Given the current opposition to fairly innocuous GM crops (e.g., http://www.csa.com/discoveryguides/gmfood/overview.php), it’s not clear why Nordhaus and Dyson at all confident that society will embrace GM-trees having the capability of altering our atmosphere and possibly our climate?
Dyson also writes, “Biotechnology is enormously powerful, capable of burying or transforming any molecule of carbon dioxide that comes into its grasp.” Perhaps, but this unbridled optimism strikes me as far more speculative than the GCMs that skeptics keep trying to refute.
26 May 2008 at 1:17 PM
Issues of practicality aside, is it just me or does anyone else find the idea of genetically a carbon eating/sequestering life form a terrifying stupid idea? What happens if this organism is out there in the wild and CO2 levels have dropped to pre-industrial levels?
[Response: The answer is that you trigger a Snowball Earth. –raypierre]
26 May 2008 at 1:21 PM
Re #53:
Bob Murphy, this seems interessting. Let’s assume that the world was 2500 BT (before today) at the same point as now.
The emission would be 9GtC/yr at a growing rate of 3.3%/yr in 2500 BT(, without deforestation).
Which emission of carbon to the atmosphere would you suggest in your case for the time from 2500 BT to today? Maybe you can give a list with values every 100 yr or so for interpolation.
Uli
26 May 2008 at 1:21 PM
Bob Murphy wrote: “There are billions of people who right now lack basic utilities like clean drinking water and dependable electricity. If they are encouraged (forced?) to try to leapfrog over fossil fuels and go right to solar or whatever, their development will be hindered.”
You assert that “their development will be hindered” but you offer no reason to believe that this would be so. And there is evidence that the opposite is true: that rapidly deploying clean, renewable energy technologies and avoiding destructive fossil fuels is not a hindrance but the key to sustainable development in the poor world.
With regard to dependable electricity for example, the fastest growing technologies for generating electricity worldwide — by far — are photovoltaics and wind turbines. According to Worldwatch Institute, global production of PV panels increased 51 percent and wind-generating capacity increased 27 percent in 2007 alone, continuing multi-year double-digit growth rates for both technologies.
In many cases, small-scale distributed photovoltaic and wind-generated electricity is proving to be the most cost-effective and fastest path to rural electrification in the developing world, where the financial, technological and industrial resources to build large centralized power plants of any kind, and the grids to distribute their electricity, don’t exist. Wealthy-nation support for the rapid dissemination of such technologies in the developing world leads directly and powerfully to creating a better quality of life for people there, and also reduces the growth in emissions from electricity generation.
With regard to clean drinking water, anthropogenic global warming is a grave threat to the drinking water supplies of billions of people all over the world. Ending global warming is an absolutely urgent necessity for preserving drinking water supplies.
26 May 2008 at 1:25 PM
In response to post #70, raypierre wrote:
The two points you make have been quite thoroughly addressed, but you weren’t paying attention….Besides [Nordhaus’ dubious model], there’s the highly questionable issue of the discount rate assumed by Nordhaus and many other economists. David addressed that specifically in his post.
Hang on a second. The following is David’s addressing of the issue of discount rates:
I personally can get my head around the concept of discounting if the time span is short enough that it’s the same person on either end of the transaction, but when the time scales start to reach hundreds and thousands of years, the people who pay in the future are not the same as the ones who benefit now.
There’s no polite way I can say this, but the above is honestly analogous to me (an economist) criticizing the IPCC at a website like WeHateGore.org and saying, “Personally, I don’t see why we should put any faith in these models. They can’t even tell me if it’s going to rain next week, so when the time scale goes to hundreds or thousands of years…!”
So whatever your thoughts on discounting, David’s expression of personal confusion over the practice of economists hardly counts as a thorough disposal of the practice.
And yes, some people pointed to Weitzman’s work, and the RFF paper. Again, this is analogous to me pointing to Lindzen and saying, “Look, even an MIT expert on this stuff agrees with me! These models are bunk!”
It’s hard to keep the different objections separate on this thread. As I keep pointing out, a lot of people here don’t like the idea of using dollar measurements in the first place, in which case the discussion of discounting is superfluous.
But if you are prepared to accept that a cost/benefit test of proposed mitigation measures isn’t absurd, then the next step is to ask whether future costs and benefits should be given equal weight to present ones.
And I’m saying the answer is no, because whether we agree with it or not, the market right now undervalues future dollars. So we can achieve our aims more cheaply by recognizing this basic fact, rather than declaring it immoral.
I’ll try one more analogy to get the point across. Suppose there is a homeowner trying to decide whether to spend $1000 renovating the insulation in his house, in order to save $100 on utility bills per year. Should he do it or not?
If David is right, then before we can answer that question, we need to know how old the homeowner is. After all, if he’s going to die in two years, then clearly the expenditure isn’t worth it, right?
(The standard answer of course is no, the age of the homeowner is irrelevant, assuming he wants to pass on as much wealth as possible to his heirs. They will reap the benefits of the efficient purchase of insulation. They would rather get the insulated home, and $800 less in cash, than the non-insulated home, and $800 more in cash. [The $200 comes from the two years of life left in the homeowner, in which he lowers his utility bills from the new insulation.])
[Response: There is a real difference between assessing a discount rate for dollar investments for which clear alternatives are available (i.e. why bother to invest in something special if the bank interest rate is higher than the expected return), and assessing the worth of non-economic goods (’the social discount rate’). Confusing the two concepts is at the heart of most of the noise surrounding this issue. To give an extreme example for clarity, if someone uses a bomb to blow up someone today, that is surely just as heinous as if they bury the bomb and set it to blow up tomorrow (or next week or next year). It is equally unethical to set the timer for a day in the future as for a hundred years, yet any substantial social discounting would downgrade the crime to a misdemeanor given a long enough lead time. There is a difference and pretending that only the economically illiterate think so, is not constructive. It is however an ethical decision, and can’t be proven one way or another using economics alone. - gavin]
26 May 2008 at 1:28 PM
One final comment, and then I think I should quit while I’m ahead (or not too far behind): Nordhaus is actually on “your” side in this. He has been one of the most vocal economists on the importance of climate change.
If you think he is unduly activist, it might be because, as a professional economist, he sees costs of your personally favored policies that you aren’t considering.
26 May 2008 at 1:52 PM
Whoops–typo: I meant above to say that if you think Nor