The Costs of Climate Inaction
Matt Zeitlin remarks that “while this may be outside the purview of the Congressional Budget Office, it would be nice if they could score — somehow or another — the economic benefits of the world not melting down.”
I think the main issue here isn’t so much that it isn’t possible to develop such a metric, as that a dollars and cents approach to the costs of letting the world burn tends not to capture what’s going on. For example, even a very optimistic take on the consequences of climate change is going to say that things will look very bleak for Bangadesh. But Bangladesh is a poor country. Consequently, the economic costs of Bangladesh’s 161 million people all dying tomorrow would be relatively modest—their whole GDP is only about $225 billion. The cost to Americans of Bangladesh being wiped off the face of the earth would be tiny. But that doesn’t mean it’s okay for Americans to be blithely unconcerned about activity that threatens the lives of hundreds of millions of people in the developing world.
Second, probabilities:
The impact of a 10 degree or more warming of the globe is simply not very well-understood. The climate science along is hard to model. It’s possible that it will set into motion feedback loops that rapidly spiral out of control. The geopolitical implications are also difficult to get a grasp on. But from a strictly selfish American-centric point of view, a lot of the correctly weighted costs of climate change come from the 5-10 percent chance that things will be much worse than expected rather than from the costs arising under the most likely scenario. More modeling of the price of inaction is still worth doing, I think, but it’s critical to keep in mind that the dominant issues have to do with the risks of utter catastrophe and with the consequences to relatively poor people—neither of which are well-captured by a simple account of the likely economic cost of inaction.
37 Responses to “The Costs of Climate Inaction”
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June 23rd, 2009 at 8:37 am
Let me know when you’re serious enough about this supposed problem to either:
– advocate an end to such conveniences as car, rail, and air travel
– advocate an end to most heating and cooling
or
– start advocating for a crash program of nuclear power plant construction
Because Wind and Solar aren’t going to cut it, and electric vehicles powered by coal plants merely shift the emissions to somewhere else.
Until one of those two things happens, this is all advocacy for something else, using “climate change” as a fear mongering stalking horse. Because a real crisis would involve real change, not a few small adjustments at the margins that, nevertheless, manage to jack prices up tremendously.
June 23rd, 2009 at 8:41 am
Also some of the worst stuff will happen to people far in the future. Which may or may not matter to us.
June 23rd, 2009 at 8:45 am
James, it’s not necessary to end those things, of course. If some car travel migrates to rail (and some short-range air travel as well), and if cars themselves all operated at the fuel efficiency of today’s most-efficient cars, and if heating/cooling systems all operated at the efficiency of today’s most efficient systems, we would have no problem. We would fulfill even the strictest and most catastrophist standards out there. As for nuclear power, there are novel technologies that get around the problem of eternal radioactive waste, and certainly those are worth pursuing, rather than “clean coal” fantasies. So maybe we’re in limited agreement there.
June 23rd, 2009 at 8:46 am
What’s so bad about Kansas suddenly having beachfront property? Huh, huh!?!? Ever been to Kansas in the winter? I didn’t think so! I’m sure the people there will appreciate it being above 60 degrees all the time! And polar bears! Ever seen one? WTF are you supposed to do with a polar bear anyway? So the ice caps melt, big deal! If God didn’t want us burning fossil fuels he wouldn’t have invented the internal combustion engine. Now excuse me, I have a dinosaur to ride off into the sunset…………and it’s a hot sunset too!! Green THIS!
June 23rd, 2009 at 8:48 am
Um Robertson I would just point out that a Cap and Trade system on CO2 would be a implicit giant subsidy for Nuclear Power. We may decide that we want to restrict Nuclear anyway becasue of waste and non-proliferation concerns, but with a Cap and Trade system these restrictions will be harder to defend. What we shouldn’t do is scare people into thinking that any of this stuff will lead to an end to car, rail and air travel. Thats just nonsense.
June 23rd, 2009 at 8:50 am
Oh Glenn Beck what would we every do without you?
June 23rd, 2009 at 8:50 am
What Rich said. James, look up the fallacy of the excluded middle. You’re practicing it.
To add to Matt’s point: there’s also the small matter of, you know, actually environmentalism. Even a relatively moderate warming of the globe is likely to push a lot of species to extinction. There are some of us who still think that matters. So it’s not just the human economic costs that need to be factored in.
June 23rd, 2009 at 8:53 am
Actual environmentalism doesn’t preclude cost benefit analysis. We still have to decide if protecting polar bears is worth what it will cost us. And Global warming isn’t the only environmental issue so we have to ask whether in other areas we are spending as much as we are on reducing CO2 emissions. I think preventing global warming is worth it, but if it cost 5% of GDP rather than about .5% I might have a different view.
June 23rd, 2009 at 9:03 am
Well, I’m all in favor of cost-benefit analysis.
But I think the environmental bottom line is likely to be the acidification of the oceans via dissolved CO2 — that’s potentially a huge issue for marine invertebrates.
June 23rd, 2009 at 9:17 am
Where does the 5-10% as an estimate that feedback loops will be triggered come from? We have *no* data on which to base an estimate like that.
And when I see model estimates (in any field, not just climate related) that look like that (i.e. roughly steady state, and then growing to infinity), what comes to mind is “wild-ass-guess ” not “likely approximation of reality.”
It’s hard for me to understand how–after our economy was just decimated by people who put way too much faith in their mathematical models of future events–people aren’t a bit more skeptical of the models that we’re using to determine the state of one of the most complex systems in existence a century in the future.
June 23rd, 2009 at 9:20 am
That’s a pretty odd looking graph.
June 23rd, 2009 at 9:27 am
[...] For all you coming here from Yglesias, he’s very much right that just calculating the “costs” of climate change in terms of, say, expected US GDP [...]
June 23rd, 2009 at 9:54 am
And of course, the Democrats don’t plan to do ANYTHING to change that graph in any appreciable amount.
June 23rd, 2009 at 9:56 am
TW Andrews: You don’t appear to have the faintest idea about why the Wall Street models of the housing market failed. If you did, you would realize it was because they ignored what was assumed be extremely low probability catastrophic outcomes — exactly what you want us to do with climate change. You’re the guy selling CDS protection on Super Senior tranches of bonds like hot cakes to get cashflow because default rates can’t POSSIBLY get high enough to trigger losses. You’re AIG.
June 23rd, 2009 at 9:57 am
James Robertson is partly right, however he doesn’t go far enough. We are talking about an absolute reduction of 80% of emissions with a growing population. We will need to deindustrialize. There is in fact no way of achieving the necessary reduction. These programs are pipedreams.
June 23rd, 2009 at 10:05 am
The sad fact is that Americans do not care. I remember when I lived in London in the mid-1980s during the “Feed the World” video events, there was a snide undercurrent that I began to detect with the Tory-leaning students of “let the market” sort it out. When I returned home, I’d see Sam Kinneson (sp?) tell jokes like, “I got one word for those poor starving kids in Africa: leave! Move! Get the hell out of there! I don’t wanna watch you people with flies in your eyes. Don’t you have a brian in your head?” etc. So I don’t think we in the aggregate care at all. The sad fact is that we don’t really care about poor people in the United States, so why do we care about really really really poor people in the rest of the world?
June 23rd, 2009 at 10:07 am
You don’t have to look on the other side of the world to find people who will be devastated by climate change. Louisiana’s coastal erosion qualifies as catastrophic and has for DECADES and no one seems to have noticed. This affects over a million people in South Louisiana, and our enormous seafood industry, and a huge chunk of domestic oil and gas production, and our port system (largest in gross tonnage in the WORLD, ships out all those midwestern agricultural products)… this needs attention NOW, not in fifty years. We have less than a decade to begin reversing the land loss.
June 23rd, 2009 at 10:11 am
Eh, but if Bangladesh became uninhabitable, the spread of 160 million environmental refugees, and the resulting civil wars and ethnic conflicts, would engulf India, China, Thailand, and other areas that are economically important. And of course those areas will be having their own environmental problems in addition to the problems caused by refugees. In the end, whatever effects the global economy does effect our economy.
The main problem is not that the costs of global warming will fall disproportionately upon the poor. That is a problem, but even if you only care about the costs to our country, taking serious action to stop global warming is still a no-brainer. The bigger problem is that there are so many intervening causal factors in determining how much global warming will cost our country that realistically, any estimate is going to be very vague, and will be ripe for attack on that basis. Which is one of the many eternal problems with cost-benefit analysis – it tends to exaggerate the importance of certain costs and understate the importance of benefits that will likely be huge, but can’t be precisely measured.
June 23rd, 2009 at 10:22 am
In fact, if we can get methane and other NON-Co2 greenhouse gases under control (which traditional environmentalism would also advocate), we wouldn’t have to touch co2 itself (not that we shouldn’t or won’t–this is just to give a sense of the options available to us). Dr. Hanson himself is now saying we should focus on methane (as all know, about 23 times the climate effect of co2 measured over a century–even worse ratio in short term impact. methane is a real climate monster. And methane is eminently controllable in a cost-effective manner, since most control or reduction programs involve using it for energy, displacing fossil fuels).
for a really scary, NON-co2 gas, look into HFC’s http://solveclimate.com/blog/20090430/state-department-climate-move-hits-snag-white-house
And, it is interesting that looking into these and related issues you will find that the Obama Administration is not playing a progressive, but rather a rear-guard reactionary role. Larry Summers in particular is advancing ‘economic’ (read:’commercially advantageous for our friends in industry’) reasons to subvert and sidestep cap and trade. very disappointing to me, an ardent obama supporter.
Larry Summers is the Donald Rumsfeld of the Obama Administration.
June 23rd, 2009 at 11:08 am
When I see comments like Mr. Robertson’s (#1), I am reminded of that old saying, “Many hands make light work.” My point is that we need all actions at all levels by all of us. We certainly need a fundamental transformation of our culture and society to be less dependent on fossil fuels, less consumer-oriented, less energy-dependent in all ways. This goes far beyond changing out our lightbulbs, adjusting the thermostat, living in smaller houses closer to work, eating less meat. But we need those also. We may even need nuclear power, and we certainly need more site-based solar and wind and geothermal. And yes, we need to address the population issue head-on. I take this position in opposition to Mr. Robertson’s dualistic, even Manichaean either-or position.
June 23rd, 2009 at 11:21 am
“Dr. Hanson himself is now saying we should focus on methane (as all know, about 23 times the climate effect of co2 measured over a century–even worse ratio in short term impact.”
I’ve been enjoying the latest ad – Chevron’s, I believe – about how they’re purifying their methane by filtering out that nasty, nasty, CO2. Forget the fact that methane is a worse graeenhouse gas than CO2, when you burn it, it produces CO2 on nearly a molecule for molecule basis. This isn’t something that Chevron could possibly not know. They are assuming that people are stupid to an extent I’ve never seen before.
June 23rd, 2009 at 12:09 pm
There’s a error (egregious variety) in the line of thinking that James Robertson proposes. Unless you do X, you’re insincere about the issue. You don’t teleport immediately to your desired endpoint. Instead, you take a step at a time. Of course, if you don’t want anyone to go to your desired endpoint, you might mock the baby steps it takes to get things going.
Robertson might drive his car into a city bus on his way home, killing everyone on board and numberous bystanders. He’d be responsible for hundreds of millions of dollars in damages. Does he carry hundreds of millions of dollars in liability insurance? I bet not. Is he insincere about being a safe, responsible driver? Ask him.
June 23rd, 2009 at 3:35 pm
Rail runs on… diesel or (effectively) coal. Which means that cap and trade raises the cost of that too. And no, there’s no implicit subsidy for nuclear. The administration is doing everything short of a wooden stake to stop nuclear power from being an option. What you are asking for is a pricing out of coal, oil (et. al.) and a replacement by wind and solar.
And even there, your own side doesn’t want to play ball. See the efforts to stop wind installations, to stop powerlines, and to prevent decent sized solar installs (like the proposed Mojave desert one).
You want to make it expensive to use the current mainstays of power production, and aren’t the least bit interested in making any other power sources feasible.
Good luck with that.
If you actually succeed, and gas and home heating prices skyrocket, the electoral disaster the Republicans gave themselves in 2006-2008 will be something the Democrats will hope they can limit themselves to.
June 23rd, 2009 at 4:10 pm
To do a cost-benefit analysis for the United States alone would require having climate models that can forecast anthropogenic effects on a spatial scale as small as different regions of the U.S. Unfortunately, current climate models are unable to do this. While some information is obtainable from the planetary scales for which the models do appear to have skill, I doubt that’s enough for the kind of analysis that Matthew wants (not to say this will keep anyone from trying, of course).
June 23rd, 2009 at 8:37 pm
“melting down….burn…”
People who use worsd like these in relation to the predictions of global warming either don’t know what the hell they are talking about, are trying to mislead with rhetoric, or both. Either this disqualifies one from being taken seriously as a commentator on the subject.
Needless to say (one hopes), under no plausible scenario is even the most extreme greenhouse-induced global warming going to make the world “melt” or “burn”.
June 23rd, 2009 at 8:49 pm
i agree with everything you say, but that graph is ridiculous. the most recent data is already below the 90 percent confidence interval estimated in 2000. couldn’t they have rerun the forecast using the most recent data?
June 23rd, 2009 at 9:12 pm
To get some idea as to where the hairshirt ideas that Matt would like to inflict on us lead politically, have a look at this post on Clean Technica.
Note how few people would be willing to make the relatively small sacrifice of giving up their iPods, never mind how many would not give up A/C.
If Democrats pass a policy that raises the price of energy dramatically – something Obama admitted would happen during the campaign – then you’re looking at an electoral drubbing for the Democrats of fairly epic proportions. Sure, Republicans look pretty dead right now. Consider the fact that the Democrats looked pretty dead in 1994.
June 23rd, 2009 at 9:15 pm
And Jeffrey – as I’ve said before, I work out of my home office, I drive less than 5000 miles a year (in a 20 year old car with no A/C). I have taken mass transit once or twice during the entire last year. If you want to get into a “who’s greener in real life” competition, I suspect I’d win, even though I truly don’t care
June 23rd, 2009 at 10:59 pm
What is up with James Robertson?
There’s this weird argumentative strain of otherwise intelligent Republican that always says things that amount to “Well, Democrats are right about the problem, and their solutions are headed in the right direction, but by god they’ve left out my pet answer, so I’ll just insult them and vote for somebody who’ll make everything worse.”
So start a Democrats for Nukes club. Jeez. Here you just sound like an idiot.
June 23rd, 2009 at 11:14 pm
I don’t think Democrats are right about this problem – I think the obsession over this is ridiculous at best, completely stupid at worst. What is being proposed will drive the cost of power up tremendously, which will pull money out of the pockets of most Americans. Based on the advocates on your own side of this argument, the impact of the sort of legislation being discussed will be nearly irrelevant – which makes it all even dumber.
That’s why I’ve said that if you people were actually serious, you would be calling for the shutdown of nearly all current power sources. Heck, based on the supposed threat to the planet, any country that stands in the way of preventing the outcomes you fear (like China and India) should be made into pariah states.
But wow, no one is proposing any of that – which leads me to believe that very few of you are serious about this stuff. Because if you were, you might start being honest about the full total cost of where your proposed policies will lead. Instead we get utterly ridiculous missives from Matt about how the poor will magically get a $40/year benefit, and the rich will only pay $250 or so per year extra. The dishonesty in such advocacy is appalling, and Matt – and the rest of you – should be ashamed.
If you want to push “solutions” for the climate change “problem”, fine – but have the decency to be honest about what those proposals will cost. It won’t be a small amount, and it won’t allow us to live the lifestyle we live now.
June 24th, 2009 at 2:42 am
James Robertson said:
Let me know when you’re serious enough about this supposed problem to either:
– advocate an end to such conveniences as car, rail, and air travel
– advocate an end to most heating and cooling
or
– start advocating for a crash program of nuclear power plant construction
Uranium is rather rare. I have read estimates (although not recently) that if we went nuclear, we would exhaust the world’s supply in about 40 years. So this is not a very good long-term solution.
We would also have to solve the nuclear waste problem, which has been around for 30 or 40 years and is currently stalled.
By the way, I did not use any heat last winter. Granted, Oregon winters are rather mild, but it did get down to 40° inside during one cold spell. I try to avoid the A/C in the summer (I use a window fan), but if it gets above 90°, I’m heading for the “on” switch!
June 24th, 2009 at 2:57 am
Sonic Charmer said:
“melting down….burn…”
People who use worsd like these in relation to the predictions of global warming either don’t know what the hell they are talking about, are trying to mislead with rhetoric, or both. Either this disqualifies one from being taken seriously as a commentator on the subject.
Needless to say (one hopes), under no plausible scenario is even the most extreme greenhouse-induced global warming going to make the world “melt” or “burn”.
Given the context of this discussion (global warming), it should be reasonably clear to even the casual reader that “melting down” is about our icecaps and glaciers melting.
Your extreme statements (not to mention misspellings and a weird sentence construction – did you mean “Either of these…”?) prevent me from taking you very seriously as a commentator on the subject.
I will grant, however, that the his use of “burn” is a bit excessive.
June 24th, 2009 at 3:02 am
How embarrassing to complain of another’s grammar, and then screw up a sentence of my own, which should have been:
I will grant, however, that
thehis use of “burn” is a bit excessive.I guess I should go to bed…
June 24th, 2009 at 5:48 am
I keep on hearing “renewables will not cut it” and “we can handle nuclear waste”. What happens in the future is of paramount importance to me, even if I am not alive to see it, my family will be. It is just wrong to say that there are ways of disposing of nuclear waste safely. The UK regulatory authorities have denied permission for deep level disposal of radioactive waste on two occasions. Radioactivity cannot be prematurely removed from an isotope, it just has to be stored until its radioactivity reaches a safe level, for thousands of years. It is the government and the tax payer that is bearing that cost. Clean coal is also far from reality, but carbon capture is at least possible and there are a number of technologies about to be scaled up for practical use. Also, we could use biochar, using our current waste to produce carbon free energy (in fact positive carbon reductions) use more renewables and make improvements to the distribution grid and improved storage of energy through renewable production of hydrogen and ethanol and the use of pumped storage to stop our depenedence on ANY non-renewable energy production. In Europe, the Clavenden Group have just worked out with a major investment in the grid, all of Europe could be running on renewable energy in thirty years, fifteen if levels of investment were substantially increased.
Do not buy in to the propoganda of the nuclear industry. Safe, Cheap and Clean? Nuclear is not!
June 24th, 2009 at 6:37 am
Re: Where does the 5-10% as an estimate that feedback loops will be triggered come from?
Feedback loops work both ways: they can have a negative damping effect too. Given that the Earth’s climate has never “spiraled out of control” in the past despite massive shocks, and given that current warming is less than the models predict, I suspect that these negative damping effects are indeed operating. This is not cause for complacency or inaction, but the graph at the top of this post is simply not credible.
June 24th, 2009 at 11:31 am
Alan,
Given the context of this discussion (global warming), it should be reasonably clear to even the casual reader that “melting down” is about our icecaps and glaciers melting.
Nice rescue attempt, but evidently Zeitlin’s actual quote is “the economic benefits of the world not melting down”. Ice caps are not “the world”, nor vice versa. If he meant, as you assert, to refer to/connote merely the issue of whether ice caps “melt down” (completely? even that scenario would lie well outside any reasonable GW prediction), he could have. Didn’t though.
How embarrassing to complain of another’s grammar, and then screw up a sentence of my own,
Tell me about it. Anyhow, I would have thought Matthew Yglesias readers would be fairly inured to bizarre spelling/grammar mistakes by now. For the record though, yes I was disturbed that the habit appeared to rub off on me….
I will grant, however, that the his use of “burn” is a bit excessive.
Well ok then. So, we agree. Best,
June 25th, 2009 at 2:01 pm
Given that the Earth’s climate has never “spiraled out of control” in the past despite massive shocks,
Google “Snowball Earth”