Saturday, September 26, 2015

CAGW and Consensus

Some years ago, Richard Tol published an article in the Journal of Economic Perspectives that pooled the work of everyone in the field to produce estimates of the net effect of various levels of warming, measured relative to pre-industrial temperatures. It included a graph showing estimated net cost, with an error range. The green lines show his results after correcting some errors in the original paper.
   

The solid green line shows the estimate. It is positive up to about two degrees, negative thereafter. The dashed lines are the boundaries of the 95% range. The high end (optimistic) does not go negative until 3°C.

What about the low end? At 3°C, the welfare impact is a reduction of 10%. The IPCC high emissions scenario, RCP8.5, which gets us to that temperature sometime in the second half of the century, assumes continued economic growth. If so, the 10% reduction in welfare due to AGW will be combined with an increase several times that large.

My previous post discussed an article in the Journal of the National Academy of Sciences which criticized the IPCC models and concluded that warming due to AGW had been reasonably stable for the past century at a little less than one degree/century. If that continues, by 2100 global temperature will be less than two degrees above its preindustrial level. On Tol's estimate, we will be better off than if there had been no AGW, worse off than if AGW had been a little slower. 

If, on the other hand, we accept RCP8.5, when we reach the 3° mark we will be worse off than if warming had not occurred, better off than we are now—even if we take the low end of Tol's predicted range of effects.

Which I think is an adequate response to people who tell me that to deny catastrophic effects of warming is to ignore the scientific consensus.

22 Comments:

At 3:35 AM, September 27, 2015, Blogger Josiah Neeley said...

I agree with your conclusion to this extent: whether a set of consequences is "catastrophic" involves a subjective judgment, and so can't be a matter of scientific consensus.

I disagree, however, that the effects of climate change can't be considered catastrophic so long as we are still better off than we were in the past. To take an extreme case, suppose that by 2100, climate change has negated 99% of all the economic growth between now and 2100. The world of 2100 would still be richer than the world of today (just barely). But would you really say that climate change wouldn't have had catastrophic effects in that scenario?

Another example: GDP is much much higher now than it was 100 years ago. Yet there have been many events during the 20th century that I would consider catastrophes (the Great Depression, two world wars, the horrors of Communism, etc.)

 
At 5:01 AM, September 27, 2015, Blogger hightide said...

CAGW is not a term used by the scientific community. It's become a bit of a dog whistle for climate change deniers.

 
At 6:31 AM, September 27, 2015, Blogger Richard O. Hammer said...

I have a question, David, about a somewhat related subject. When fossil fuels are oxidized by humans that produces heat immediately. (Forget the CO2 for now and any effect that may have through greenhouse effect.) What effect upon global temperature might be created by the immediate heat produced by oxidation of various amounts of fossil fuel? Have you ever seen that question addressed?

 
At 7:07 AM, September 27, 2015, Blogger Andrew Clough said...

Richard, our civilization currently uses about 17 TW total. There's about 132000 TW of sunlight hitting the Earth. The Stefan–Boltzmann law says that the heat emitted from an object like Earth is proportional to the 4th power of it's temperature. So our direct contribution to the temperature of the Earth is ((132000 + 17)/132000) ^ (1/4) or .003% or .01 degrees Celsius. If we had 1 trillion people on the Earth using as ten times much energy as an American you would still be getting just .15 degrees of warming, because fourth powers are like that. It's not something to worry about.

 
At 8:59 AM, September 27, 2015, Blogger Richard O. Hammer said...

Thank you, Andrew.

 
At 11:01 AM, September 27, 2015, Blogger David Friedman said...

Hightide:

I would have said that CAGW is not a term popular with people concerned about global warming because they prefer the easy argument for their position to the hard one. It's easy to argue that temperatures are trending up and humans at least part of the cause, which is the AGW claim. But it doesn't give you any policy conclusions. To justify a carbon tax or something similar, you need to show that if we do nothing about it very bad things will happen, which is the CAGW claim.

So you get people, including Obama, who cite evidence for the consensus for AGW ("97%")and pretend it is evidence of a consensus for CAGW.

What part of what I have just written do you disagree with? If none, how do you justify trying to put down "CAGW" as a dog whistle instead of recognizing it as an important part of the argument?

 
At 11:58 AM, September 27, 2015, Blogger Josiah Neeley said...

Suppose for sake of argument that if we do nothing damages from climate change will be 10% of GDP, and that by instituting a carbon tax we can reduce that damage to 5% (including the costs that come from the tax itself). In that scenario, there would be a straightforward case for a carbon tax irrespective of whether one things 10% of GDP qualifies as "very bad."

Even if the overall consequences from climate change are positive, there still could be a case for action, given that some people would still be harmed (for example, a warmer planet may boost agricultural productivity overall by opening up new farming land in Canada while simultaneously ruining some existing farms).

 
At 3:01 PM, September 27, 2015, Anonymous Daublin said...

Josiah, your line of thinking sounds good, but you stop to soon!

If you expect a policy will reduce a harm from 10% of GDP to 5% of GDP, then the policy needs to cost less than 5% of GDP, correct? I think that's too small of a budget to make any real difference on CO2 emissions, though.

As a point of comparison, I would guess that the Kyoto Protocol would easily have cast the USA more than 5% of its GDP per year. It effectively is a limit on energy usage. Yet, Kyoto is not enough to reduce the harms of CO2 at all. Since it doesn't reduce emissions below the replacement level, then even if the whole world adopted Kyoto, CO2 would keep going up, and so the full effects of CO2 would still be felt. So, Kyoto is already too expensive for the 5% budget, and yet it's not effective enough to solve the problem. Anything that's effective enough would surely cost even more.

The 10% and 5% numbers are obviously made up, but my intuition is that it would be hideously expensive to make CO2 level off, rather than just increase more slowly. Increasing more slowly, though, seems pretty pointless, doesn't it? Some people say we should ratchet CO2 usage down little by little, but that only really makes sense if the incremental steps relly get us closer to a world of non-irncreasing CO2. We would not need to use trains instead of cars, but rather for plebians to stop having access to long-distance transportation at all. We would not need to turn the AC to 74 degrees instead of 70, but rather to stop using AC.

 
At 3:02 PM, September 27, 2015, Anonymous Daublin said...

Sorry, the 10% number is not made up--that's the worst-case number from David's post. The 5% was made up for the sake of argument.

 
At 3:06 PM, September 27, 2015, Blogger David Friedman said...

For what it's worth, Nordhaus, who is one of the people arguing for acting against climate change, concluded some time back that Kyoto cost much more than it was worth. I don't know if that is still his view or not.

Also, the cost benefit calculation should be based on some sort of expected cost, not on the worse case cost. For 3° that seems to be about 2.5° from the graph.

 
At 7:31 PM, September 27, 2015, Blogger Tom Hudson said...

I worry about the statistical robustness of the claim you're supporting here.

There are 14 data points in that graph, but as far as I can tell only *one* of them is responsible for the curve having any upwards component whatsoever.

Removing any one of the 13 other points from the graph would have a minimal effect on the shape of the graph. But removing that one positive study completely destroys the argument. You have a great deal of reliance on the validity of just one of your 14 data points; any weakness there becomes a weakness in the overall argument.

I believe it's pretty common in well-conducted simulation studies to check how stable the computation is: if we change each input by 10%, does the result change by less than 10%? Or significantly more? In the latter case, there's something worrisome about the math. Your argument here feels similarly problematic without more details.

 
At 9:42 PM, September 27, 2015, Anonymous js290 said...

Nature doesn't care about scientific consensus. And, there's no such thing as "economics" in Nature.

 
At 4:28 AM, September 28, 2015, Anonymous Anonymous said...

@js290,
in the same way, there's no such thing as "physics" in Nature, either.

 
At 5:33 AM, September 28, 2015, Blogger Josiah Neeley said...

Daublin,

In the scenario I presented the 5% includes the costs from the carbon tax.

It's true that Nordhaus found the costs of Kyoto likely outweighed its benefits. On the other hand, Nordhaus has also estimated the cost of waiting to act on climate change is about $3 trillion. Most policy changes have a benefit of < $3 trillion, but that's typically not presented as a reason for not doing them.

 
At 9:14 AM, September 28, 2015, Anonymous Mark Bahner said...

"The 10% and 5% numbers are obviously made up, but my intuition is that it would be hideously expensive to make CO2 level off, rather than just increase more slowly."

My prediction is that the world is naturally evolving to a point where CO2 will level off. I think that point will be reached sometime in the latter half of this century.

What is needed for that to happen is for unsubsidized wind-and-solar-plus-storage, with or without nuclear, to be significantly less expensive than coal, natural gas, or oil.

I can see that happening by the middle of this century (plus or minus 2 decades).

Photovoltaics Power Purchasing Agreement (PPA) Prices (subsidies significantly lower the PPA prices)

Wind PPA prices (subsidies significantly lower the PPA prices)

 
At 12:44 PM, September 28, 2015, Blogger David Friedman said...

Josiah: Three trillion sounds like a lot of money until you realize that it's spread over the entire world and the rest of the century. I did the calculation for a later and somewhat larger version of the figure that he offered. The annual cost worked out to about .06% of world GNP.

I got the number from an article where Nordhaus was responding to a piece arguing that AGW was not a crisis that demanded immediate action. If the cost of waiting fifty years is .06% of world GNP, it isn't a crisis, so the number he offered was evidence against the argument he was making, a fact obscured by the way he presented it. Which is some evidence of the way in which the debate gets biased, which is one reason why I suspect that Tol's figures probably make the results of warming look worse than they are. Nordhaus, and I suspect most of the others, are looking for argument for high costs, not for low.

For details, see:

http://daviddfriedman.blogspot.com/2014/03/contra-nordhaus.html
and
http://daviddfriedman.blogspot.com/2014/03/acts-vs-words-case-of-nordhaus.html

 
At 8:08 AM, September 29, 2015, Blogger Josiah Neeley said...

Three trillion sounds like a lot of money until you realize that it's spread over the entire world and the rest of the century.

There are lots of policies that people passionately advocate for that would have less than $3 trillion in benefits even spread out over the entire world and the rest of the century.

Again, whether something counts as a "crisis" or a "catastrophe" is largely subjective. The cost of Hurricane Sandy was about .06% of world GDP. Suppose you asked people "if climate change caused the equivalent of an extra Hurricane Sandy each year somewhere in the world, would that be a crisis?" My guess is more people would say yes than if you described the scenario in term of effect on GDP.

 
At 12:19 PM, September 29, 2015, Blogger David Friedman said...

Nordhaus was responding to a WSJ piece that argued that it wasn't a crisis that required immediate action. If someone said that unless we did something major immediately on a world scale, each year there there would be some event on the scale of Sandy somewhere in the world, I don't think it would be seen as a crisis situation. My guess is that there is something on that scale somewhere on the world more or less every year, and has been for a long time—but we only notice it if it happens to us or is of some very visible form, such as the Fukushima reactor problem.

To put the point differently, can anyone say with confidence that he can estimate the cost of action to substantially slow AGW to an accuracy of less than .06% of world GNP? If not then Nordhaus is actually saying that the uncertainty in his calculation is large enough so that acting against AGW might well make us worse off on net.

 
At 5:17 AM, October 02, 2015, Blogger Toby W said...

There are a wealth of good arguments against AGW and CAGW on wattsupwiththat.org, plus the requirement that hypotheses be predictive, not only are wrong, they are all too high. Algorithms are not shared. Publications tend to be suppressed. APS.org is revising their public policy statement and after appointing a fair divided panel, cannot seem to publish a position having passed the deadline. Historical temperature data is manipulated.

 
At 8:06 AM, October 02, 2015, Blogger Josiah Neeley said...

To put the point differently, can anyone say with confidence that he can estimate the cost of action to substantially slow AGW to an accuracy of less than .06% of world GNP?

If you mean aggregate world GNP between now and 2100, then sure, we can be that accurate.

 
At 8:11 AM, October 02, 2015, Blogger Josiah Neeley said...

To put the point differently, can anyone say with confidence that he can estimate the cost of action to substantially slow AGW to an accuracy of less than .06% of world GNP?

Of aggregate world GNP between now and 2100, you mean. Sure, we can do this. We can also estimate the concentration of CO2 in the atmosphere to an accuracy of less than .06% of the total atmosphere.

 
At 1:26 AM, October 03, 2015, Blogger David Friedman said...

Josiah: I'm not sure of the reason for your confidence. Slowing AGW isn't going to involve a one time cost to be compared to most of a century of GNP. It's a continuing cost in the use of higher cost sources of power. How large it is depends on a bunch of things we have no way of knowing, including the cost of fossil fuels, the cost of the alternatives, what happens to demand for power, all over most of a century.

 

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