I just ordered a new book from Amazon.com

Economic Principals reviews Nordhaus' A Question of Balance:

No issue throws off more apprehension and confusion among a certain set than does global warming. Since the Norwegians last year propelled Al Gore’s film documentary, “An Inconvenient Truth,” into the stratosphere by awarding half a Nobel Peace Prize to the former presidential candidate ..., the proposition that continuing industrialization is going to require some extensive mitigation of its effects on the atmosphere has become much more widely accepted.

But what?  How much?  Where? And when?

A new book, A Question of Balance, by William Nordhaus, casts more intense light on these matters than any other. Nordhaus, of Yale University, is a master economist, a gifted expositor, a canny rhetoretician. Most important, he is a scientific diplomat.  He has been in constant touch for many years with a wide range of experts in other fields, not just natural scientists ... and social scientists ..., but designers of the human-built world as well .... It is unlikely that we will see a better framework for discussion of these issues for many years.

Comments

[Don]

Those with an interest in Nordhaus's history of involvement in global warming will be interested in, "From Chicken Little to Dr. Pangloss: William Nierenberg, Global Warming, and the Social Deconstruction of Scientific Knowledge," by
Naomi Oreskes , Erik M. Conway , Matthew Shindell
Historical Studies in the Natural Sciences Feb 2008, Vol. 38, No. 1: 109–152 (winter 2008).

[Dano]

Those with an interest in Nordhaus's history of involvement in global warming...

Indeed. I saw Marty Hoffert recently and he sure can carry that big Apollo-type project baton that Nordhaus passes.

Although I always recommend The Death of Environmentalism for good examples of Nordhaus ideas. And I recommend this video from Oreskes on the history of climate change denialism and the industry funding behind much of the denialism.

Best,

D

[tidal]

Dano, are you confusing your Nordhauses? William, not Ted (although Eli has mentioned that Ted is William's nephew).

[Dano]

Ah. Yes, that's right. Thanks, Tidal. Amazing what gets forgotten when multitasking madly.

Best,

D

[Don]

Damn. I wish my nephews reflected by ideology.

[Bob Murphy]

John,

When you get Nordhaus' book, be sure to look at his tables showing that the proposals of Al Gore and Nicholas Stern would end up costing over ten trillion dollars more than they would benefit. At the same time, Nordhaus' optimal carbon tax only yields net benefits of $3 trillion in PDV.

So that means Nordhaus shows that a poorly implemented climate change policy could do more than 3x as much net harm, compared to the net benefits of even a theoretically optimal carbon tax.

[odograph]

I don't know where that $10T comes from, but I'd guess that it is (1) somebody's worst case, and (2) totaled over a very long time.

[joshua corning]

I don't know where that $10T comes from, but I'd guess that it is (1) somebody's worst case, and (2) totaled over a very long time.

Odo; the anti-efficiency lobby.

And I recommend this video from Oreskes on the history of climate change denialism and the industry funding behind much of the denialism.

Heh as if anyone needs funding to read a graph showing dropping global temperatures and then comparing it to IPCC models that projected far higher temperatures. Oh yeah I forgot you work for government...yeah for you that would take million dollars.

Who else would think spending billions on the clean air act to clean the air less then was cleaned before the act is an efficient use of resources.

Anyway i don't know which Nordhaus is which....I know I like the one who took a blow torch to the Stern report.

[Bob Murphy]

Odograph,

The $10 trillion figure (and btw I bumped it way down to cover myself in case the numbers are revised from the version I originally studied, the actual rounded numbers on his website are $17 trillion for Stern and $22 trillion for Gore) comes from William Nordhaus' own model, and is contained in the book that John ordered. See page 82 (Table 5-1) in this pdf of Nordhaus' galley.

Is Nordhaus trustworthy on these matters? Some think so, to wit:

A new book, A Question of Balance, by William Nordhaus, casts more intense light on these matters than any other. Nordhaus, of Yale University, is a master economist, a gifted expositor, a canny rhetoretician. Most important, he is a scientific diplomat. He has been in constant touch for many years with a wide range of experts in other fields, not just natural scientists ... and social scientists ..., but designers of the human-built world as well .... It is unlikely that we will see a better framework for discussion of these issues for many years.

So my point is, if we're going to praise Nordhaus and cite him as proof that if the economists "do it right" then they too agree on the benefits of a carbon tax, let's also realize that Nordhaus shows if the politicians screw it up (what are the chances, right?!) then it could be much worse than doing nothing.

[Bob Murphy]

I don't know where that $10T comes from, but I'd guess that it is (1) somebody's worst case, and (2) totaled over a very long time.

Odo,

I've clarified the source, but now let me address your two specifics objections:

(1) Actually it's a "best" case, in the sense that Nordhaus assumes the entire world implements Stern or Gore's proposals in textbook fashion. If, in contrast, some countries (like China) opt out, or if the participating countries don't perfectly enforce the regime and exempt a few politically popular industries, or if there's a worldwide recession in 2030 and governments relax the carbon controls, then the net costs go way above the figures of $17 and $22 trillion.

(2) Of course it's totaled over a long time; it's the present discounted value of the policy over (at least) a 150-year horizon; it may even be a 250-year horizon.

This objection on your part is kinda funny. The shorter we make the horizon, the more expensive any carbon program is going to be. When it comes to a carbon tax, the pain is upfront; it's not until 50 years into it that the program starts yielding net benefits.

Incidentally, that $3 trillion figure for the net gains from a theoretically optimal carbon tax is also totaled over a long time. And again, if you shortened the horizon, then its net benefits would go down.

Does that make sense to you? Sure we can quibble about the estimates--and the biggest objection alarmists have to Nordhaus, is that he picks middle-of-the-road damage estimates rather than catastrophic ones, plus that he just does an expected value approach--but do you see how shortening the horizon will always make carbon programs appear worse in a cost/benefit calculation?

[odograph]

(2) Of course it's totaled over a long time; it's the present discounted value of the policy over (at least) a 150-year horizon; it may even be a 250-year horizon.(2) Of course it's totaled over a long time;

You know, I tell the peak oil guys that any prediction requiring a "technology" assessment can't go past a decade, or two.

That's because the world is re-invented every three to five decades, in ways we cannot predict.

That is a crucial difference between the atmospheric modeling of what CO2 will do, and these long range economic argument about what it will all mean.

So, in response to your repeated "of course" I must answer: lolz