Unblemished Risk Assessment on Climate Change Reduction.

Cornell economics Professor Robert Frank offers up a solid op-ed in today’s New York Times on the economics of climate change. (Calling it a big step up from this recent climate monstrosity in the Times is an understatement):

Organizers of the recent climate conference in Copenhagen sought, unsuccessfully, to forge agreements to limit global warming to 3.6 degrees Fahrenheit by the end of the century. But even an increase that small would cause deadly harm. And far greater damage is likely if we do nothing.

The numbers — and there are many to choose from — paint a grim picture. According to recent estimates from the Integrated Global Systems Model at [M.I.T.], the median forecast is for a climb of 9 degrees Fahrenheit by century’s end, in the absence of effective countermeasures.

The gist of the piece is that based upon non political, objective, logic based risk assessment, and basic economics, there really isn’t a decent case against immediate climate change redress. Summarizing, Frank notes:

In short, the cost of preventing catastrophic climate change is astonishingly small, and it involves just a few simple changes in behavior.

The real problem with the estimates is that the outcome may be worse than expected. And that’s the strongest possible argument for taking action. In a rational world, that should be an easy choice, but in this case we appear to be headed in the wrong direction.

(A few quick examples of how the market could be motivated to effect much of this change on its own, while preserving personal choice and promoting growth at the same time,  are here.) Ironically, the piece could have painted a stronger picture for action and been more objective and accurate at the same time.  For example, it concludes:

Most people would pay a substantial share of their wealth — much more, certainly, than the modest cost of a carbon tax — to avoid having someone pull the trigger on a gun pointed at their head with one bullet and nine empty chambers. Yet that’s the kind of risk that some people think we should take.

First, and more controversially, this follows the common and likely erroneous presumption that addressing climate change sensibly “costs” money rather than simply serves to shift what constitutes GDP.   But more pointedly, Frank’s assessment is based upon a probability of 10 percent of a rise of 12 degrees or more.  Yet the same M.I.T study Frank relies upon for this, as noted earlier in the piece, projects the median rise to be 9 degrees. (In other words, half of the projections come in above 9 degrees, half lower, if no remediation action is taken.)  Thus, to continue the analogy, the other chambers are not “empty.”

Frank notes this himself earlier:

Essentially, the risk is that if current estimates turn out to be wildly pessimistic, the money spent to curb greenhouse gases wouldn’t have been needed to save the planet. And yet that money would still have prevented substantial damage. (The M.I.T. model estimates a zero probability of the temperature rising by less than 3.6 degrees by 2100.)

Thus, NONE of the chambers are empty; and half of them are not that far off from the 12 degree “bullet.” But what was left out of this assessment is that if current estimates turn out to be wildly pessimistic, there are still other significant reasons why the expenditures would not have been a waste.

First off, as noted above, they won”t serve as “true” expenditures in the long run — but will shift what we do spend our GDP dollars on. So if they “do nothing,” we probably would have preferred having more flat screen TVs (metaphorically speaking) and instead we will have more historically stable CO2 levels.  But since in the long run happiness is not correlated with absolute levels of wealth, but rather an ongoing increase in growth and job opportunities, even this is fairly trivial, again, in the long run. (Implementing cleaner, less destructive fuels prompts jobs and GDP growth the same as building a few extra flat screen TVs does.)

But they won’t do nothing, even apart from the climate change issue.  Much of the climate change challenge stems from fossil fuel use.(The rest stems from deforestation, changing agricultural practices and grazing ruminant livestock, and other sundry causes.) We have to get off of these anyway. They are finite. Extremely so in the case of oil. We might as well get off of them now.

And in addition, fossil fuels also cause considerable harm in addition to being largely responsible for an increase in atmospheric carbon dioxide levels to levels that on a sustained basis may well be unprecedented in the past fifteen million years:

They are responsible for a large proportion of our atmospheric pollution, CO2 (which is not a “true” pollutant), aside.  In the case of coal, they are also responsible for a majority of the toxicological poison mercury that is bio-accumulating in our food chain. Also in the case of coal, they are responsible for a significant amount of degradation to the natural landscape and watersheds where coal is mined. (Sometimes even causing the irreversible destruction of entire mountain tops).  And in the case of oil, they are responsible for unnecessary national security vulnerabilities created by relying upon, and sending hundreds of billions of dollars to, foreign oil selling regimes overseas that we often view as hostile to our interests.

Another interesting aspect of the piece is when Frank notes that we may be “headed in the wrong direction.” Quoting Harvard psychologist Daniel Gilbert, Frank notes:

“Global warming is bad, but it doesn’t make us feel nauseated or angry or disgraced, and thus we don’t feel compelled to rail against it as we do against other momentous threats to our species, such as flag burning.”

But we’re also headed in the wrong direction for a few other reasons. Number one is an incessant parade of nonstop misinformation on the topic, along with poor media coverage of it.

Number two is that climate change is abstract. We can’t feel it, touch it, taste it, see it, or smell it. Sure, we see and feel the weather everyday, but climate change is a decades long process; the weather at any particular time is all but irrelevant, and of course, all over the board.

Number three is that, perhaps given a natural desire to believe such conclusions, people tend to confuse the lack of precision or absolute certainty on climate change with the certainty of the physics that underline the phenomenon; including the certainties that heat drives climate (ultimately through the oceans), heat trapping gases trap heat, and levels of heat trapping gases have ratcheted upward at geologically breakneck speed to extremely high levels — and are still climbing.

Number four may be the most infrequently mentioned, yet, after misinformation, perhaps the most important.  An increase in atmospheric trapped heat is ultimately going to warm or otherwise alter the planet, and produce some sort of radical change (likely warming) through the oceans.  It takes an extremely long time to heat up oceans. (And, as we would expect, oceans are slowly retaining more and more heat.) Decades, if not more.  For this reason, among others, there is a considerable lag in climate change between cause and effect.

That is, given natural variability, we won’t “know” the effects of climate change (as opposed to mere, bizarre, variability) for years. And even then we still won’t because there will be multiple decades of effect built up in the pipeline.

It’s abstract, it’s in the future, and there are considerable cause and effect, and potential variability lags on top of that.  Those things, however, do not make it any less real. We are, however, very counter productively, treating it as if they do.

If we purchase a stock at 100 dollars, and we knew it had an 80 percent probability of going to zero, and a 20 percent probability of going to 125, we would sell it in an instant. And at a steep discount from 100 dollars, also. We would never go “but we don’t know with certainty that it is going to go to zero” as a rationale for doing nothing.

But that is precisely what we are doing, with respect to climate change.  The precise number of the effect is all but irrelevant when it comes to future harm.  What matters is the range of likely outcomes, their expected probabilities, and likely, attendant harm for each.  Somehow — perhaps through natural confusion over the science, and the four reasons listed above along with the one posited by Gilbert and Frank — we are completely confusing this.

The suspicion here is that misinformation driven by ideology is in fact playing the leading role, with the other factors merely facilitating the process and allowing for easy and in many cases, perhaps even earnest, confusion and misinformation promulgation on the issue.