Global warming: Moral vs Economic solutions
freakonomics.blogs.nytimes.com
freakonomics.blogs.nytimes.com
Injecting sulfur dioxide into the atmosphere to cool us down (and create more acid rain) helps our temperature, but doesn't help with the next pollution disaster. Or the one after that.
Spending about 2% of current world domestic product on CO2 mitigation seems perfectly justifiable to me.
Morally, or economically?
A 2% drop in world gdp would lead to at least as bad a recession (likely even worse) than the one we're in now.
During the past year the world gdp rose 3.1% (See https://www.cia.gov/library/publications/the-world-factbook/...) - which was about 2% lower growth rate on gdp.
And a catastrophic failure of the ocean's ecosystem would have no economic impact at all, I guess? An economic analysis can't just ignore the risks of inaction when considering the costs of proposed solutions.
Just for kicks, how many people do you think would die annually if we spent 2% of annual GDP? (Remember to include all the people who will die prematurely because of diverted R&D, less income for medicine, distracted governments & elites, car manufacturers favoring fuel efficiency over safety etc.)
OTOH it is hard to overestimate how prone politicians are to make stupid politically motivated decisions. But if they do that then I blame the politicians, and not the cause.
Not really, when global GDP only grows a few percent each year... '2% of GDP' might seem small, but if we rephrase it as 'half of annual growth' or something more realistic?
> It entirely depends on how that money is diverted...OTOH it is hard to overestimate how prone politicians are to make stupid politically motivated decisions. But if they do that then I blame the politicians, and not the cause.
"My proposal assumes that men are angels and wishes are fishes; assuming that, everything will work out great! We'll have our cake of carbon reduction & not eat the cost of spending 2% of global GDP. And if it doesn't work, I blame anything but my proposal."
Let's run the numbers, shall we? According to http://en.wikipedia.org/wiki/World_economy#Economy over the part of this decade that has been measured, gross world product has grown an average of 3.1% per year, compounding annually. Projecting forward 20 years that means that we expect gross world product to increase 84%. If we go carbon neutral and the final gross world product ends up at 2% less than this simple projection, it grows about 80.5% instead. Thus we'd reduce the amount of total growth by about 4%. Take a 20th power and we find that the amount of growth in the end is reduced by a factor of 0.2% per year, compounding annually. Note that when I say 0.2% I don't mean that it would be 2.9% instead of 3.1%. Instead I mean that it would be 3.0934..% instead of 3.1%.
The per year impact on economic growth rates could quite literally be missed as a rounding error. I think I am quite justified in saying that this is noise compared with our projected future economic growth. But the projected environmental catastrophe we address most definitely is not noise.
> > It entirely depends on how that money is diverted...OTOH it is hard to > overestimate how prone politicians are to make stupid politically motivated decisions. > But if they do that then I blame the politicians, and not the cause. > > "My proposal assumes that men are angels and wishes are fishes; assuming that, everything > will work out great! We'll have our cake of carbon reduction & not eat the cost of > spending 2% of global GDP. And if it doesn't work, I blame anything but my proposal."
Ridicule is always easier than thought. You made a list of ways in which you thought this effort could take lives. But your list is weak. Worse yet you haven't even tried to think about how global warming takes lives.
1. Projections by scientists say global warming threatens food supplies, resulting in potential starvation. 2. Projections by the CIA predict substantially increased geopolitical instability. This is likely to result in wars killing lots of people. 3. The World Health Organization claims that 2.4 million people die each year from air pollution. Today. Continued increases in industrialization on the current model would increase this figure substantially. A move to seriously replace fossil fuels would save many to all of these lives.
After considering those factors I think that I am on solid grounds to claim that a serious attempt to solve global warming, even if it is done stupidly, is likely to save far more lives than the resulting potentially poor allocation of resources will cost. With the difference measured in the millions of lives/year. (Depending on what value you give each life, this alone could justify the whole project without even considering longer-term consequences.)
Now please justify the energy I put into this post. Please come back with a response showing that you've read and thought about what I said, and either found it thought provoking, or found that you have substantive criticism based on verifiable facts.
Hold on, that sounds nothing like what you originally said. I quote, "Spending about 2% of current world domestic product on CO2 mitigation seems perfectly justifiable to me."
'2% of current world domestic product' is rather different from '2% of world GDP 80 years from now'.
> Thus we'd reduce the amount of total growth by about 4%. Take a 20th power and we find that the amount of growth in the end is reduced by a factor of 0.2% per year, compounding annually. Note that when I say 0.2% I don't mean that it would be 2.9% instead of 3.1%. Instead I mean that it would be 3.0934..% instead of 3.1%.
I don't follow your calculations here. When I plug in 3.09% into a compound interest calculator instead of 3.1%, after 20 years I get the same 184% answer. If you suggest we can have our cake & eat it too, I suspect your math is screwy somewhere...
> 1. Projections by scientists say global warming threatens food supplies, resulting in potential starvation. 2. Projections by the CIA predict substantially increased geopolitical instability. This is likely to result in wars killing lots of people. 3. The World Health Organization claims that 2.4 million people die each year from air pollution. Today. Continued increases in industrialization on the current model would increase this figure substantially. A move to seriously replace fossil fuels would save many to all of these lives.
1. from the IPCC: "Crop productivity is projected to increase slightly at mid- to high latitudes for local mean temperature increases of up to 1-3°C depending on the crop, and then decrease beyond that in some regions. At lower latitudes, especially seasonally dry and tropical regions, crop productivity is projected to decrease for even small local temperature increases (1-2°C), which would increase the risk of hunger. Globally, the potential for food production is projected to increase with increases in local average temperature over a range of 1-3°C, but above this it is projected to decrease."
But hey, since you're willing to assume perfect politics, then shouldn't I be allowed to assume that any surplus will be distributed to those who need it? (Actually, if we're assuming perfect politics, this is utterly irrelevant - there is far more food produced than necessary to feed everyone, after all.)
Dislocation from changes in agricultural productivity are one-time costs, Malthusian-style; and can be offset by better farming. We can spend trillions offsetting warming, or we can invest some billions into getting affected farmers better irrigation or fertilizers, or just relocating them. I know which I prefer.
2. Projections by the CIA predict substantially increased geopolitical instability. This is likely to result in wars killing lots of people.
Again, one-time costs, as opposed to eternal mitigation costs or opportunity costs; and as for straight deaths, it's not like cold doesn't kill dozens of thousands a year, every year: http://www.wired.com/science/planetearth/news/2005/03/66981
3. Global warming efforts are only loosely linked to fighting the kind of pollution that kills people. Putting some carbon sequestration equipment on a coal plant doesn't much affect the particulates that kill people. And historically, per the environmental Kuznets Curve, deaths from pollution are reduced by further economic development & not by fighting some tangential cause. You want China to stop killing so many of its people with coal plant emissions? Let China develop to the point where the benefits of the cheap coal power is less than the destruction of human capital & degradation of life - development that would be hampered by taxing everything related to carbon emissions or calls to have everyone switch to driving Priuses or something.
> After considering those factors I think that I am on solid grounds to claim that a serious attempt to solve global warming, even if it is done stupidly, is likely to save far more lives than the resulting potentially poor allocation of resources will cost.
If it's done stupidly, it'll do nothing whatsoever for the issues, constitute a massive waste of resources. (People are bandying around programs spending billions & trillions of dollars. Those are the sort of resources that could fund Manhattan Projects on things like cancer or aging.) And remember, even the crash interventions still say that temperatures will rise significantly.
> With the difference measured in the millions of lives/year. (Depending on what value you give each life, this alone could justify the whole project without even considering longer-term consequences.)
(I wouldn't value the lives too much, as they will almost all be very poor Third-worlders, because that's the region of the world affected and the sort of people who can't or won't adapt.)
They match perfectly, but you may have misunderstood what I was saying.
Several different studies have concluded that the cost of going carbon neutral would result in dropping future world domestic product by $1 trillion/year. As the world grows, it is reasonable to assume that that trillion grows in proportion. We would therefore suffer a permanent loss of 2% of production, on which you can superimpose otherwise normal growth curves. So contrary to your repeated claim that I want to have my cake and eat it too, I'm talking about a large, ongoing economic hit. However it is a small fraction of global product, and the hit is small relative to ongoing growth rates.
>> Thus we'd reduce the amount of total growth by about 4%. Take a 20th power and we >> find that the amount of growth in the end is reduced by a factor of 0.2% per year, >> compounding annually. Note that when I say 0.2% I don't mean that it would be 2.9% >> instead of 3.1%. Instead I mean that it would be 3.0934..% instead of 3.1%. > > I don't follow your calculations here. When I plug in 3.09% into a compound > interest calculator instead of 3.1%, after 20 years I get the same 184% answer. If you > suggest we can have our cake & eat it too, I suspect your math is screwy somewhere...
I could have messed up, let's to the math together.
Through this decade growth has averaged 3.1%/year. So every year we have 1.031 times as much stuff produced as the previous year. 1.031^20 is 1.84150671005791. So in 20 years I'd expect us to see 84% growth in production. If we multiply that by 0.98 to account for the cost of mitigating global warming, we wind up with about 1.80467657585675 times as much production as today instead. When I take a 20th root of that I get 1.02995907626323. So we lost about 0.001% of growth/year, compounding annually. That is about 3 percent of annual growth lost.
Oops, I definitely did have a calculation error. Thanks for keeping me honest. However you can still see that, relative to overall growth, we're talking fairly small numbers.
Another way to look at it is how far behind we are timewise. And the answer is that at 3.1% growth we'll grow 2% in about 8 months. So in 20 years and 8 months with CO2 mitigation our production will be about what it would have been in 20 years without. Again a difference, but not that significant of one in the grand scheme of things.
Moving on, you're quoting figures from the IPCC about temperature and crop yields. Those figures say that in the middle of the projections for where we are a century from now, crop yields are likely to decrease. Furthermore we're not just talking higher temperatures. We're also talking changing weather patterns, which likely means increased drought in most mid-latitude areas. You might want to ask some of the farmers in California how drought is helping their crop yields these days, if you can find any in business. (Yeah, I know, there is also a court case feeding into that. But according to the climate models that business would have had to go away in the end anyways.)
(Skims forward.) I think you're underestimating the economic and lasting effects of war.
Ah yes, the pollution item. Carbon sequestration is popular because it doesn't harm any vested interests. However it has never been proven on a large scale, and current estimates have solar and wind being cheaper. If you generate the power on the grid with solar and wind, then replace cars with electric vehicles, it is amazing how much air pollution goes away.
Now you may say that electric vehicles aren't going to be adopted. If you think that, go read The Innovator's Dilemma and its follow-up The Innovator's Solution. One of the case studies is the car industry. Based on technology curves the prediction in the mid-90s was that hybrids would be brought out in this decade, and electric cars would become fully competitive with old cars around 2020 or so. Those curves have continued to hold, and so - even without any government intervention - the likely widespread adoption of electric cars is about a decade or so off. Therefore planning on that future isn't exactly pie in the sky dreaming.
(Reads further.)
Well your comment about not valuing millions of poor people very much speaks volumes about your ethical system. Likewise I'm guessing you don't really care about details like mass extinctions in the oceans. With such a big gulf in our mattering maps we're not going to see eye to eye on a lot of big topics.
WP says that 2008 GDP (GWP, apparently) was 61 trillion. Growing at 3.1% a year, that means 2009 growth ought to be 1.891 trillion dollars. If we immediately spend 1 trillion on carbon mitigation, then growth was only .891 trillion dollars, or 1.4% of 61 trillion (for a loss/difference of 1.7% annually).
Following your assumption that we lose 1.7% of world growth to carbon mitigation, then our compound interest formula is FV = P (1 + r)^Y, or FV = 1(1 + 0.014)^20 (20 years, whatever GWP currently is = 1, the 1.4% becomes 0.014). I get 1.3205629241491976 in ghci.
But I might've messed up, so I double-checked in http://www.moneychimp.com/calculator/compound_interest_calcu... (principal = 1, no annual addition beyond the interest, 20 years to grow, 1.4% interest, compounded annually). It says 1.32. (Switching 3.1 for 1.4 gives me ~1.84 as it should in both ghci and the calculator.)
184% vs 132% is the difference between 112 trillion and 80 trillion (61 * 1.84 & 61 * 1.32). So global warming mitigation efforts will result in an economy producing 32 trillion dollars less each year than it otherwise would. To make that worthwhile would take some pretty serious damages from global warming.
I'm not entirely sure where your error is, but I'm suspicious of your multiplying GWP-20-years-from-now by 0.98.
> Those figures say that in the middle of the projections for where we are a century from now, crop yields are likely to decrease. Furthermore we're not just talking higher temperatures. We're also talking changing weather patterns, which likely means increased drought in most mid-latitude areas. You might want to ask some of the farmers in California how drought is helping their crop yields these days, if you can find any in business.
Future decreases are of less interest because they have to be discounted for being, well, future. As for California, I have heard that the West periodically undergoes prolonged drought (such as with the Pueblo Indians?), and the past few centuries are unusually wet, so who knows how much global warming is actually hurting those farmers?
> I think you're underestimating the economic and lasting effects of war.
Perhaps. But growth is far more dependent on people than exogenous events like war. Note that Korea and Japan are some of the largest economies in the world, despite minimal resources and having both been devastated in war, and both only growing since the '40s or '50s. Is their growth in part due to the war itself and the destruction & rebuilding? "War is the father of all things".
(A further point, I have seen Iran's centuries long decline in the second millennium as due to Hulagu Khan's invasion in the 1200s. Japan & Korea could bounce back stronger than ever within a few decades, yet Iran couldn't recover for centuries? Further evidence that the effects of war are not obviously negative.)
> If you generate the power on the grid with solar and wind, then replace cars with electric vehicles, it is amazing how much air pollution goes away.
Sure, maybe cars will go all-electric. But why would the grid switch to solar and wind? It's barely doing so right now, even with generous subsidies and the threat of oil shocks. The probability of switching both grids & cars is necessarily lower than the probability of either... The best way to fight air pollution will not always coincide with reducing greenhouse gas emissions.
> Well your comment about not valuing millions of poor people very much speaks volumes about your ethical system.
It speaks more about my Malthusian leanings. Why should I wish to badly damage the industrialized world's growth for the sake of some poor country like Maldives, which with its population growth of 5.57% will see its population double in less than 15 years? They're going to screw themselves over - those islands can only support so much - and the longer they can keep the musical chairs going, the worse it will be at the end. If global warming ends the game early, it wouldn't bother me. (The lower the limit, the higher per capita can be.)
It would also tie us in - if SO2 stopped being injected into the atmosphere for any reason, all the CO2 is still there and as the SO2 washes out of the atmosphere within a few weeks, the CO2 warming would come back full force immediately - the longer SO2 had been used to offset CO2, the worse it would be.
Offsetting CO2 warming with a seperate cooling effect is risky, the real solutions are either reduction of CO2 output - and even that might not be enough for many countries/cities because of the decades of delays in any meaningful action that have been engineered since we knew what was happening - or some technology to pull CO2 out of the atmosphere.
Yes, this approach will cool it! But what will happen next? The Earth is a very complex system and its behavior might be impossible to predict with certainty. The more we mess with it and pretend to be all-knowing gods the worse it will get.
http://www.ted.com/index.php/talks/bjorn_lomborg_sets_global...