Global Warming--Where do I stand?

The discussion over my post on George Will's column on global warming clearly shows that I have been unclear as to where I stand on the global warming broohaha.  Part of that is intentional as I have found that we get more discussion when I am vague then when I'm specific.  The other part is unintentional as I am conflicted.  Sometimes my internal economist conflicts with my internal socially responsible humanitarian/environmentalist regular human being and things get confused--and you don't want to hear what my internal drummer has to say, trust me.  Anyway, here's my attempt to clear my conflictedness. 

Is global warming happening? 

Internal Human:  I'm pretty sure it is.  Most scientists--some of them even reputable--seem to agree and they know a lot more about climate than I do.

Internal Economist:  Probably, but that's not the real issue.  The real issue is whether current and future generations are better off or worse off--either in reality or in perception--due to global warming.

Is global warming caused by human behavior? 

Internal Human:  Probably, but the scientists don't seem to be quite as sure on this.  There seems to be an awful lot of coincidences that eventualy have to be interpreted as increased greenhouse gases caused this.  But I don't think causality has reached the point of scientific certainty yet. 

Internat Economist:   Probably, but that's not the real issue.  The real issue is whether current and future generations are better off or worse off--either in reality or in perception--due to global warming.

Assuming global warming is happening and it is caused by human behavior, should we do something about it?

Internal Human:  Of course, you moron.  Global warming is bad and we caused it so we have to stop it, reverse it, do whatever we can to save the earth for future generations.

Internal Economist:  Well, that depends.  Simply because we have demonstrated that global warming is happening and that we caused it, that doesn't automatically imply a call to action.  What are the consequences of action versus inaction?  Is climate change necessarily the equivalent of climate degradation?  Why is change always bad in this context?  Shouldn't we compare the expected benefits and costs of action against the expected benefits and costs of inaction rather than simply declare: Change is bad..therefore we must prevent (or reverse) the change?

Aren't we better off erring on the side of caution?

Internal Human:  Yes.  The potential consequences of being wrong are dire. If complete environmental/ecosystem collapse is even a small possibility why shouldn't we take preventative action now?

Internal Economist:  To an extent 'yes.' But only to the extent that we are unable to measure the level of uncertainty surrounding the set of possible consequences.  The precautionary principle is often interpreted as 'we must take action now to prevent unknown but potentially disastrous future consequences."  Often left out of that interpretation are the potentially disastrous current and future consequences of action.  For example--and yes this is an unrealistic scenario, but hopefully it illustrates my point--suppose we take action by mandating production technologies for all greenhouse manufacturing facilities.  The inevitable consequence is a reduction in per capita income and per capita welfare...for most if not all of the world's population.  Are you willing to make the decision that this is a good trade-off:  Everyone is worse off today to prevent everyone from being possibly worse-off tomorrow?  I'm not willing or able to make that judgement.

So if you aren't willing to make such a judgement, what good is economics?

Internal Economist:  Aha...you walked into my trap.  The point is, we have to let individuals make this choice for themselves within the bounds of restraining the costs imposed on others.  No doubt there are external consequences of individual behavior...and these must be accounted for in the design of regulation.  We have to know what these consequences (up to a measurable level of uncertainty) are before we can create the set of incentives that cause the least economic damage.  Now don't panic just because I am focusing on economic damages.  In my world, economic damages include ALL costs of a particular action:  lost welfare, lost environmental values, lost biodiversity...everything.  The problem with the popular interpretation of economics is that it is often assumed that we ignore all of these costs.  Quite the contrary.   Economists are obsessed with measuring all of the costs and benefits of actions.  The problem?  That's really hard and complicated and messy and difficult to explain. 

Internal Human:  Idiot.

Comments

[gmoke]

Twould be nice for people to stop the merry-go-round argument on climate change and begin to do the thought experiment of envisioning a zero emissions society. I mean zero emissions the way W. Edwards Deming meant zero defects on a production line. Given the track record of those companies and institutions who have already started down the zero emissions path, such a strategy would most likely mean your Internal Human and Internal Economist could kiss and make up.

[David Jeffery]

This got me thinking a couple of things:

1. OK, let's assume that climate change is NOT climate degradation - that there's no NET environmental harm because some places get drier but others get wetter, most places get warmer but some maybe get cooler, some productive agricultural regions are degraded but maybe other areas become more productive, there's more tropical disase but maybe less people freezing to death in Russian winters. Tropical coral reefs die but maybe new ones grow in previously temperate waters. I don't think this is what the science suggests but let's assume it's true. This doesn't mean there's no ECONOMIC costs though (as you broadly define them) - just the fact of change imposes these. Maybe corn growing struggles in the US but becomes super in Canada - what do we do about this? Do US corn farmers move to Canada? Do US corn farmers become something else and Canadian foresters become corn farmers? All this change imposes huge costs. Maybe there'll be some side benefits but this isn't the creative destruction of new technological innovations - this is just boring uncreative destruction.

2. How does economics deal with the huge lag periods involved? Is this something economics can handle? How do prices signal costs that won't become apparent for decades or centuries? Is this just a question of getting as much knowledge as we can about the future and dealing with it with adaptive management and/or discount rates? Does our economic system that works pretty well in responding to immediate small scale shocks work well in responding to long-term large-scale shocks?

[odograph]

If I were able to approach this as an engineering problem, I'd want to know what the low hanging fruit are. What are the CO2 sources that are most painless to discard? What are the CO2 sinks that are most painless to encourage?

Unfortunately policy doesn't work that way. We repeat these sketches of "full response" leading to "economic ruin."

It's doubly sad of course because these repeated big fights block not just big responses but little ones too. It's obvious that some actors could see that as a useful strategy.

Can a loose population of indiviudal actors reduce their CO2 production? I don't even know. I can choose my car, my refrigerator, my appliances, but I can't choose the upstrem efficiencies of the day to day products I buy in the stores. There is not a carbon label on my computer, and I don't know how much coal was burned in China to make it.

[David Gerard]

That's uncanny.

[Tim Haab]

Odo,

Interesting. Here's a brief abstract from an NSF project I am working on with a chemical engineer and a statistician. Sounds similar to what you have in mind. Unfortunately we are only in year 1 of 5 so we don't have much progress to report yet:

"Economic models of social preferences for environmental amenities and disamenities are well-developed. However, such models are notoriously lacking in links to physical models of the processes that generate the environmental amenity or disamenity, and perhaps more troubling, economic models designed to analyse the impact of environmental policy virtually ignore the differential effects the policy might have on the production processes in various economic sectors. The goal of this project is to develop a systematic framework for modeling the technological, economic, environmental and social aspects of the life cycle of industrial materials, and to illustrate the feasibility and advantages of integrated life-cycle and economic modeling of industrial materials use and apply the integrated framework to the life-cycle of transportation fuels. In the process, we develop methods for studying the impact of targeted environmental policies on multi-scale industrial processes.

In short, we introduce for the first time, a systematic framework and the rigor of multiscale Bayesian methods to integrated socio-economic and life cycle modeling. This permits proper utilization of all types of data and models at multiple levels of aggregation, along with rigorous consideration of uncertainty and prior knowledge. The result is a novel approach for linking a socio-economic model of social preferences to the physical process model of the multi-scale Bayesian LCA, yielding a level of policy analysis detail previously unavailable in the environmental economics literature. Such linkages provide a means of evaluating the unintended consequences and economic inefficiencies created by one-dimensional policy design."

[David Mathews]

Internal Human: I'd stop destroying the environment only if it doesn't cost anything.

Mother Nature: I'm going to destroy the human pest before it finishes destroying everything.

Internal economist: If human extinction is profitable, humans ought to go extinct.

[odograph]

Tim, I can accept that you are an honest environmental economist, looking to improve understanding to the global warming problem.

To slash them down to one-liners:

- learn more about costs, before "changing"
- investigate specific programs for cost and benefit

Those are great, but they could have been done, or "feathered in" 10 or 20 years ago. Something with as limited downside as tree planting could have been accepted and endorsed by all sides.

I feel a real sadness that proposing these things late in the game ... has its own cost and benefit. The benefit is of course new knowledge, but the cost is that these studies play so well into the game plan of the denial/delay lobbies. Those lobbies are a little like the NRA, fighting *any* action, even a small one, as a chink in their defenses.

They love it when a new reason pops up to pause, and do a new study.

I gotta tell you buddy, if you strech that 5 year study out to 10, you'll probably get even more funding.

[Paul Hoffman]

David Gerard's NSF-sponsored approach (modeling the technological, economic, environmental and social aspects of the life cycle of industrial materials) overpowers the imagination. Given unpredictable population forecasts, unpredictable future appetites and future unpredictable invention and marketing of new toys for everyone, it is hard to be confident that the modeling will be at all predictive of our future, whatever we (our power-brokers) choose to do now, two decades before disaster. Nevertheless, let's give the Bayesian models a chance. Even if the numbers turn out wrong, the future of economic forecasting will be made more secure, even if we've all moved to Nairobe in the interim.

[Dano]

The IPCC understood by choosing scenarios that predicting the future is generally fraught with peril. Hence, projections rather than predictions.

Best,

D

[Oron Zachar]

Cost and benefits of global warming: Missing from most discussions of global warming is first an assertion of "what is good for humanity and world prosperity?". Let me start with assuming that world food and energy demands for sustainable existance are the main measures of well being. Then, given a choice between Global Cooling and Global Warming trends, global worming is better. In colder periods, the world as a whole is more arid - leading to famin, and has higher energy demands for heating.

From a long term perspective (~5,000 years), we should have been now in the midst of a cooling trend towards the next ice age. If global warming is delaying this inevitable ice age destiny, then maybe it is one of the greatest of human acheivements.

On the other hand, industrial polution, forest cutting for agriculture, soil degredation, water over exploitation, and loss of biological diversity are indeed very harmful consequences of the modern world. It is unfortunate that the failed sensational arguments over global warming are diverting attention from these real environmental concerns.

CO2 and global warming only increase global percipitation and increase global food yeilds. Global warming, as a whole, actually reduces temperature extremes, since it involves reduced day time temperature and increase of night temperatures.

Anyone truelly concerned about the future state of the world enviromnent and human condition should stop fussing about global warming and start focussing on real harmful trends. Otherwise, it only weakens the scientific community influence and gives polititians an excuse for not taking decisive actions.

[Dano]

CO2 and global warming only increase global percipitation and increase global food yeilds. Global warming, as a whole, actually reduces temperature extremes, since it involves reduced day time temperature and increase of night temperatures.

zzzzzzzzzzzz.

Increased CO2 decreases nutritive yield in graminaceous plants. So, in effect, it decreases overall yield. And the precip is and will be more episodic, leading to decreased soil moisture in places. And plants aren't adapted to the new temp regimes, and as we grow them at the upper limit of their heat tolerance, this has great effects, esp. on rice**.

So "your" premises are false and "your" argument doesn't stand.

HTH,

D

**Note the date and how long the FUD phrases have been in use.