Back in March economist William Nordhaus wrote a long essay in the New York Review of Books in which he took on the “global warming skeptics,” and in particular 16 scientists who had written a WSJ op ed urging caution before embracing government measures to limit greenhouse gas emissions.
Today IER put up my detailed response. The two pieces get into some fairly technical issues, but I hope I managed to keep everything understandable to the reader who is willing to sit down and read both articles. If you’re interested in the economics of climate change, these two articles are worth reading. Nordhaus is a world-renowned pioneer in the field, whereas I am (to my knowledge) the only person with a journal critique of his policy conclusions, from a free-market perspective. (There are interventionists who have criticized Nordhaus on the grounds that his approach is far too timid in its recommendations for a carbon tax.)
One thing I will draw your attention to, is that (I must say) Nordhaus is very misleading when he reports on the economics literature modeling the potential damage from climate change. I won’t go so far as to say he intentionally misled his readers, but that almost certainly was the result. Here is Nordhaus discussing the state of the literature:
The question here is whether emissions of CO2 and other greenhouse gases will cause net damages, now and in the future. This question has been studied extensively. The most recent thorough survey by the leading scholar in this field, Richard Tol, finds a wide range of damages, particularly if warming is greater than 2 degrees Centigrade. Major areas of concern are sea-level rise, more intense hurricanes, losses of species and ecosystems, acidification of the oceans, as well as threats to the natural and cultural heritage of the planet.
Now when I first read that, my Spidey Sense was tingling. I was familiar with Tol’s work, and remembered progressive bloggers biting his head off, because his work showed that global warming was beneficial (on net) for decades. So I went and looked up the very survey article that Nordhaus is citing, and guess what? Tol shows that the majority of economic analyses do indeed find net benefits from global warming, up through 2 degrees Celsius, and only after that point do (most of) the models start moving into net harm territory. Furthermore, coupled with the IPCC’s estimates, this crossover point probably won’t happen for another 50 – 60 years.
So tell me, in light of that, if Nordhaus did his readers justice when he said: “The question here is whether emissions of CO2 and other greenhouse gases will cause net damages, now and in the future. This question has been studied extensively. The most recent thorough survey by the leading scholar in this field, Richard Tol, finds a wide range of damages, particularly if warming is greater than 2 degrees Centigrade.”