Posts Tagged ‘ecological economics’

Herman Daly on climate policy

November 6, 2008

Found via Michael Tobis’ blog: From “know how” to “do now”, an excellent speech by Herman Daly (full text available here), on the interplay between climate science, economics and policy. Take home message: We know enough to start doing something about the problem. My addition: Any realistic change in our knowledge is not going to affect that conclusion.

“Can we systematically continue to emit increasing amounts of CO2 and other greenhouse gasses into the atmosphere without eventually provoking unacceptable climate changes? Scientists will overwhelmingly agree that the answer is no. The basic science, first principles, and directions of causality are very clear. Arrhenius discovered the basics a century ago. Focusing on them creates a world of relative certainty, at least as to the thrust and direction of policy.”

Parachute or altimeter?
On the other hand, focusing on the more uncertain rates and valuations creates “a world of such enormous uncertainty and complexity as to paralyze policy”. Perhaps that’s indeed what’s happening now. “To make the point more simply, if you jump out of an airplane you need a crude parachute more than an accurate altimeter.” Discussing the probabilities of a certain temperature change and sea level rise by 2100 may be very interesting scientifically, but it is not necessarily the most relevant for policy. If the main thrust of the change is clear (more greenhouse gases causing more warming, eventually leading to unacceptable climate changes), then society should leave the quantitative mangling over details to the scientists, and focus on what to do about it. Because any realistic change in the details is not going to affect this main thrust. 
The main thrust
Just in case you think that this main thrust is not at all certain; it is. The rates, the exact magnitude and exact consequences, the details, are uncertain, and as such are being investigated by scientists. But there’s no way that more greenhouse gases would not lead to a warming. Even a serious “skeptical” position would not change this main thrust; it would merely change the timing of “eventually”. If we burn all currently recoverable fossil fuels (dominated by coal), CO2 levels will not be double pre-industrial, but more like quadruple. (pre-industrial CO2 concentration is 280 ppm; current levels are 385 ppm.) Even with a wholly unrealistic, low climate sensitivity of 1 degree warming per doubling of CO2, put forward by die-hard “skeptics” like Lindzen, this is a recipe for disaster: The Greenland and West Antarctic ice sheets are not likely stable in the long run at 4 degrees higher temperatures than pre-industrial. Mind you, I write “in the long run”. The main uncertainty is in the rate, not in the eventual fate at such high temperatures.

If it’s bad, it’s really bad. If it’s good, it’s still pretty bad. 

The current best estimate for the equilibrium warming if CO2 levels are quadrupled (i.e. if all recoverable fossil fuels are burned) is ~6 degrees over pre-industrial temperatures [corrected Dec 2014]. Can you imagine what the world would be like? If we consider a picture, however improbable, of what would happen at the low end of the response curve (a “skeptical” viewpoint of e.g. 1 degree per doubling of CO2), we should also consider what would happen on the high end (an “alarmist” viewpoint of e.g. 6 degrees per doubling of CO2): That’s beyond my imagination. Btw, the empirically determined bounds for climate sensitivity are between 2 and 4.5 degrees per doubling of CO2. But even within the extreme bounds (e.g. 1 and 6), there’s no situation imaginable where the consequences of burning all fossil fuel reserves are benign: If it’s bad, it’s really bad. If it’s good, it’s still pretty bad. Therefore, (ab)using scientific uncertainty as an alibi to not do anything is clearly irrational.

Energy policy & economics

To come back to Herman Daly, he suggests that our energy policy should focus on “a sustainable aggregate level of energy consumption” rather than on “efficient patterns of consumption”. Increases in efficiency are over time often (more than) counterbalanced by increases in consumption (the rebound or Jevons effect). Daly goes on to say that “GDP growth at the current margin in the US is in fact uneconomic growth—that is, growth that increases social and environmental costs faster than it increases production benefits”. I have no relevant expertise to comment on that claim, but the notion that it’s better “to stop uneconomic growth and free up resources and ecological space for truly economic growth by the poor” makes certain sense, though it’s politically a hard sell, and it runs counter to how we’ve got used to think about economics. Moreover, “beyond a threshold of absolute income already passed in the West, welfare or self-evaluated happiness becomes a function of relative income rather than absolute income.” This is confirmed e.g. here: 

Hapiness and money

Hapiness and money

The solution? “Tax bads (depletion and pollution), not goods (income).” I.e. shift taxes from human capital to natural resources.

“To continue business as usual while debating the predictions of complex models in a world made even more uncertain by the questions we ask, is to fail to pull the parachutes’ ripcord. The empirical consequences of this last failure, unfortunately, are all too certain.”


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