Search blog.co.uk

Kyoto Economics

by williamshepherd @ 2007-08-15 - 18:27:26

In 1998 Bjørn Lomborg, an associate professor at the Department of Political Science at University of Aarhus in Denmark published Verdens Sande Tilstand. Three years later Cambridge University Press published the book in English under the title of The Sceptical Environmentalist: Measuring the Real State of the World (ISBN 0 521 01068 3).

Later in 2001 Professor Lomborg circulated a 2500-word essay on the economics of the Kyoto Protocol. Here is the full text of the article. He worried that global warming was getting a blank cheque with cost-benefit analysis being thrown out of the window. His essay included numerous references to the 2001 IPCC Report on Global Warming on which he made his position quite clear.

‘Global warming is important, environmentally, politically and economically. There is no doubt that mankind has influenced and is still increasing atmospheric concentrations of CO2 and that this will increase temperature. I will not discuss all the scientific uncertainty, but basically accept the models and predictions from the 2001 report of the UN Climate Panel (IPCC). Yet, we will need to separate hyperbole from realities in order to choose our future optimally.’

For good measure he added a diagram showing the impact of Kyoto…on which there is a scientific consensus.

kyotoimpact

Figure 1: The expected increase in temperature with business-as-usual and with the Kyoto restrictions extended forever.

So far so good. Here is the crux of Lomborg’s argument in his own words:

‘If Kyoto is implemented with anything but global emissions trading - a scheme which seems utterly unattainable, and was not at all addressed in Bonn - it will not only be almost inconsequential for the climate, but it will also constitute a poor use of resources. The cost of such a Kyoto pact if implemented, just for the US, will be higher than the cost of solving the single most pressing problem for the world - providing the entire world with clean drinking water and sanitation. It is estimated that the latter would avoid 2 million deaths every year and prevent half a billion people becoming seriously ill each year. If no trading mechanism is implemented for Kyoto, the costs could approach $1 trillion, or almost five times the cost of world-wide water and sanitation coverage. For comparison, the total global aid today is about $50 billion annually. If we were to go even further - as suggested by many - and curb global emissions to the 1990 level, the net cost to the world would seriously escalate to about $4 trillion extra - comparable almost to the cost of global warming itself. Likewise, a temperature increase limit would cost anywhere from $3 to $33 trillion extra. This emphasizes that we need to be very careful in our willingness to act on global warming.’

Common sense to you or me. But at this point all hell broke loose around the good professor. Why? Lomborg again.

‘Economic analyses clearly show that it will be far more expensive to cut CO2 emissions radically than to pay the costs of adaptation to the increased temperatures. The Bonn meeting was convened to agree the implementation of the Kyoto Protocol, which aims to cut carbon emissions to 5.2 percent below 1990-levels in 2010, or a reduction of almost 30 percent, compared to no-intervention. The effect of Kyoto on the climate will be minuscule (and even more so after Bonn). All models agree that the Kyoto Protocol will have surprisingly little impact. One model by a lead author of the 1996 IPCC report shows us how an expected temperature increase of 2.1°C in 2100 will be diminished by the protocol to an increase of 1.9°C. Or to put it more clearly, the temperature that we would have experienced in 2094 we have now postponed to 2100. In essence, the Kyoto Protocol does not negate global warming but merely buys the world six years.

Basically, global warming will be expensive ($5 trillion) and there is very little good we can do about it. Even if we were to handle global warming optimally which would mean cutting emissions a little fairly far into the future, we can only cut the cost very little (about $0.3 trillion). However, if we choose to enact Kyoto or even more ambitious programmes, the world will lose. And this conclusion does not just come from the output from a single model. Almost all the major computer models agree that even when chaotic consequences have been taken into consideration ‘it is striking that the optimal policy involves little emissions reduction below uncontrolled rates until the middle of the [twenty-first] century at the earliest.’

Lomborg is making a perfectly sensible point…and the average grant-funded academic would have stopped there. But there is a different scientific tradition in Scandinavia. This can be traced back to Carl Linnaeus in the 18th century and perhaps even further to the mythologies of their Nordic cultures. Scientists are not easily intimidated, truth still matters, facts are respected and ordinary people have real access to public information. Lomborg once more in his own words.

‘So is it not curious that the typical reporting on global warming tells us all the bad things that could happen from CO2 emissions, but few or none of the bad things that could come from overly zealous regulation of such emissions? Indeed, why is it that global warming is not discussed with an open attitude, carefully attuned to avoid making big and costly mistakes to be paid for by our descendants, but rather with a fervour more fitting for preachers of opposing religions?

This is an indication that the discussion of global warming is not just a question of choosing the optimal economic path for humanity, but has much deeper, political roots as to what kind of future society we would like. This understanding is clearly laid out in the new 2001 IPCC report.

Last month in Bonn most of the world’s nations (minus the US) reached an agreement to cut carbon emissions. Generally the deal was widely reported as almost saving the world. Yet not only is this untrue in the scientific sense - the deal will do almost no good - but it is also unclear whether carbon emission cuts are really the best way for the world to ensure progress on its most important areas.

When the IPCC tells us that the world might warm some 5.8°C over the coming century, this is based on an enormous variety of scenarios and models, where the IPCC has explicitly rejected making predictions about the future, and instead gives us ‘computer-aided storytelling,’ basing the development of crucial variables on initial choice and depicting normative scenarios ‘as one would hope they would emerge.’

Yet the high-end scenarios seem plainly unlikely. Reasonable analysis suggest that renewables - and especially solar power - will be competitive or even out-compete fossil fuels by mid-century, and this means that carbon emissions are much more likely to follow the low emission scenarios, causing a warming of about 2-2.5°C.

Professor Lomborg then remarks that global warming would neither decrease food production nor increase hurricanes and cyclones. As for disease…and malaria in particular….he points out that the IPCC Report concluded that additional exposure would come from middle or high income countries where a well functioning health sector and developed infrastructure makes actual malaria unlikely. Thus the global study of actual malaria transmission shows remarkably few changes, even under the most extreme scenarios. For Lomborg an increase in flood victims was also unlikely because a much richer world would protect itself better just as the Dutch have been doing for centuries. ‘The cost of protection is estimated at 0.1 percent of GDP for most nations, though it might be as high as several percent for small island states.’

By this time civil servants, bureaucrats and politicians are starting to claim that Professor Lomborg has exceeded his scientific brief…a charge he has anticipated. His response is to turn it against his accusers. Lomborg again.

‘Of course, while using global warming as a springboard for other wider policy goals is entirely legitimate, such goals should in all honesty be made explicit. Moreover, it is problematic to have an organization which often quite successfully gathers the most relevant scientific information about global warming, also so clearly promoting a political agenda, which seldom reaches the news headlines.’

Aye! There’s the rub! Particularly when global warming will hit hardest on developing countries with rich countries actually likely to benefit from a warming lower than 2-3°C. Being poor means you have less adaptive capacity so you are hit harder. Our intuition might tell us to do something drastic immediately. But Professor Lomborg’s scientific credentials give him the perfect right to question whether the cure might not be worse than the original affliction. Not least because few other scientists seem to be doing so.

more from Shepherd on Climate

Trackback address for this post:

authimage

Comments, Trackbacks:

No Comments/Trackbacks for this post yet...

Leave a comment :

Your email address will not be displayed on this site.
Your URL will be displayed.
Allowed XHTML tags: <!, p, ul, ol, li, dl, dt, dd, address, blockquote, ins, del, a, span, bdo, br, em, strong, dfn, code, samp, kdb, var, cite, abbr, acronym, q, sub, sup, tt, i, b, big, small, img>
URLs, email, AIM and ICQs will be converted automatically.
Options:
 
(Line breaks become <br />)
(Set cookies for name, email & url)
Validation code:
Please enter the above code here:
For protection from spambots (case-sensitive).