26 Jul 2017

Article on Climate “Insurance”

Climate Change 25 Comments

The title is the best part, but here’s an angle I haven’t stressed much:

What people often overlook in the climate change policy debates is that the severe outcomes that occur in the computer simulations typically don’t kick in until many decades down the road. Even if governments “do nothing,” so long as they get out of the way and allow conventional economic development, the future generations dealing with climate change (and AI, and biological warfare, and killer asteroids, and all sorts of other problems we can’t even imagine) will be much richer than we are today.

For example, just throwing together some ballpark calculations (from herehere, and here), it’s a decent guess to say that in the year 2100, real global economic output will be more than seven times as high as it is today, while the world population might be a bit higher than 11 billion. So, if current estimates put real GDP per capita at around $17,000 per year, by the year 2100 each Earthling on average will enjoy a standard of living of more than $70,000 per year.

So let’s say disaster strikes and the global economy is cut in half by the year 2100 compared to what otherwise would have been the case without climate change. Even so, with our ballpark figures that still means per capita income will have more than doubled rather than quadrupling.

 

25 Responses to “Article on Climate “Insurance””

  1. David Henderson says:

    Good point, but the “each” should be deleted.

  2. Harold says:

    I was about to make an illiterate comment about how reducing GDP by a few percent to mitigate climate costs would leave our descendants still very rich. The difference is that these costs would be borne by us rather than our rich grandkids, so point taken.

    It is an interesting question. If we could double the wealth of our descendants in 2100 by spending say 1% extra now, should we do it? This is a philosophical question, not a scientific one.

    I also think that distribution is an issue. We do know that rich countries are very reluctant to allow migrants from troubled areas in. It seems reasonable to me that if say large areas of Africa become much less productive due to climate change this could in principle be compensated by much increased productivity in say Siberia and Canada. However, the individuals suffering in Africa are very unlikely to get an opportunity to move to Siberia to take advantage if this. Given a few generations this will all be sorted out, and populations will exist in areas proportionate to their productivity, as we find today. I see no particular reason why a planet that is 4C warmer and with very different patterns of coastlines and habitable areas could not be a perfectly good place to live. The problem is that the transition will be much more difficult if people do now accept the science behind the changes that are going to occur.

    So I am all for a proper discussion of these issues. I do not think the end of humanity will be brought about by climate change. The problem is that many people arguing for no action do so by rejecting the science. We end up having drawn out debates about whether CO2 is a greenhouse gas, whether increases in CO2 are caused by burning fossil fuels and similar “settled science”. This is a massive distraction that prevents us dealing with how to best cope with the changes that are going to occur. There is lots of talk currently about red team vs blue team. This is a distraction that prevents us dealing with the real issues. There is a valid red team approach to what action should be taken, which is philosophical and political, but not about the science.

    It is perfectly fine to argue for no action based on relative wealth of future generations. It is not fine to argue for no action because there is no such thing as greenhouse effect and man made global warming. Far too many opponents of action take the latter approach and this is preventing us from having the appropriate debate.

    • Tel says:

      However, the individuals suffering in Africa are very unlikely to get an opportunity to move to Siberia to take advantage if this.

      Russia has been asking for people who want to move to Siberia. They are even giving free land for homesteading. I’m pretty sure they are accepting immigration as well… those areas are not exactly crowded right now.

      https://www.rt.com/business/345022-russia-far-east-free-land/

      Now in future, maybe due to climate change, these areas might become much more attractive. If that happens then obviously demand to move there will increase and some people must miss out. However, given the enormous publicity of the whole Global Warming ethos, there’s no person on Earth who could legitimately claim “Oh I never heard of this!”

      Thus, those who choose NOT to move to Siberia today, would be responsible for making that choice. They can hardly expect anyone else to compensate them after the fact.

  3. Harold says:

    “Russian State Duma adopted a law allowing Russians the right to claim a free hectare ”

    Sorry, they are not offering this to Africans. It is not a choice for them.

    There may be no person who can claim they have not heard of global warming, but many of them have been told that it is not happening. They cannot make an informed choice without proper information.

    • Tel says:

      http://focus-migration.hwwi.de/Russian-Federation.6337.0.html?&L=1

      It’s only 2007 data… if you check Figure 1, every year more people were coming into the Russia Federation than were leaving, and the general trend is that fewer people are leaving. The trend in immigrants coming into Russia is heading upwards (has been since 2004).

      Most of these are from Eastern Europe and Asia, but if you scroll down you see they also are accepting refugees from Somalia, Ethiopia and Angola.

      Based on 2013 UN data, the Russian Federation is second place in the whole world in terms of absolute numbers of international migrants (second to the USA which is well ahead, but which also has a larger GDP by far, and … more people want to go to the USA). The recent UN numbers for Russian Federation are:

      2000: 11,900,300
      2013: 11,048,100
      2015: 11,643,300

      NOTE: UN figures are total numbers of migrants IN the Russian Federation, not the number moving each year.

      So in a nutshell, yes people in Africa do have an opportunity to move to Russia. Once they do that, they will become Russians, not Africans (officially at least, but that’s what matters for purpose of claiming incentives offered by the Russian government).

      There may be no person who can claim they have not heard of global warming, but many of them have been told that it is not happening. They cannot make an informed choice without proper information.

      Who gets to decide which information is “proper” ? Hopefully not you.

      Ultimately every person needs to decide this for themselves, and since plenty of information is available, that largely comes down to the individual.

      • Tel says:

        http://www.un.org/en/development/desa/population/migration/publications/wallchart/docs/wallchart2013.pdf

        UN data, see bottom/left corner with bar charts covering largest migrant countries.

        • Harold says:

          Given the number of wannabe migrants drowning in the Med. and living in refugee camps it is quite clear that the demand outstrips supply at present and it is perverse to imagine that millions more migrants will be welcome any time soon.

          You would really have to work hard not to see this as an issue and to imagine that massive international migration could be a solution to these people’s
          problems. That is to going to happen. Africans as a rule do not have an opportunity to move to Canada or Siberia, although a great many die trying.

      • Harold says:

        “Who gets to decide which information is “proper” ?”

        I go with the peer reviewed literature. How about you?

        Basically, if people make assertions on scientific matters they should be supported by literature or provide evidence. If we stick to this principle we won’t go too far astray.

        However, you may prefer to base your opinions on blog posts.

  4. Andrew_FL says:

    I’m not replying inline to Harold because I refuse to engage him directly, but

    “We end up having drawn out debates about whether CO2 is a greenhouse gas, whether increases in CO2 are caused by burning fossil fuels and similar “settled science”. This is a massive distraction that prevents us dealing with how to best cope with the changes that are going to occur.”

    There is a rather large gap between the things Harold describes as “settled science” and “the changes that are going to occur.”

    Best not to get too bogged down in details when we’re rushing to “how best to cope”

    Harold earlier in his comment cites a figure of “4 C” warmer than-well, I presume the present, but he may mean than preindustrial. He seems to allude to potentially offsetting producitivity impacts from this change, increases in areas at high latitudes and decreases in equatorial countries. He doesn’t go into detail about the precise mechanisms. He doesn’t give a time frame over which “4 C” will occur. He doesn’t go into much detail, either, about what else sorts of “changes are going to occur” probably because there’s spotty to non existent evidence at best for most of the sorts of actual “impacts” that might explain where he thinks loses to future GDP will come from.

    Well all that might be fine, except he said “the changes that are going to occur” and if what he has in mind rises to the level of “going to” rather than “could” or “might” you need to be a bit more specific. The trouble being of course that these trifling details that make the whole spectrum of difference between “non problem” and “Armageddon” are precisely what is not settled.

    • Harold says:

      “I’m not replying inline to Harold because I refuse to engage him directly,”

      Not sure that putting it in a different line means you are not engaging directly.

  5. Bob Roddis says:

    Regardless of the subject matter, Facebook has taught me that “progressives” absolutely do not understand the process of wealth creation whether we are discussing health care, poverty or “climate change”. They seem to believe that there is a lump of wealth and it is all held by “bad people”. The only way to help either humanity or “the environment” is to pry the lump of wealth away from those bad people using the government, aka SWAT teams. You are more likely to engage your cat in an explanation of wealth creation than a “progressive” or Democrat. At least the cat will listen to what you say.

  6. Josiah says:

    Bob,

    Suppose I go to Bill Gates’ place while he’s out of town and throw a huge party, punch some holes in the wall, and generally trash the place. Bill, of course, will have to pay to clean up the mess I made. However, even after doing so he’ll still be a lot richer than me. Does that make it all okay?

    • Craw says:

      Is this Bill Gates, my grandson, and the house part of what he will inherit from me?

    • Andrew Keen says:

      I’ve never seen “out of town” used as a metaphor for “not yet born” before.

      This metaphor is pretty ridiculous if we take it at face value. We must say that we have no right to be in “Bill Gates’ place” in the first place. And since “Bill Gates’ place” is a metaphor for Earth, your metaphor implies that none of us have any right to be on Earth. This is a much larger problem than simply getting our emissions under control. Somehow we need to vacate Earth entirely without preventing our grandchildren from moving in when they get back from “out of town.”

  7. Matt M says:

    Weird how the people who are just SO concerned about the damage we may be doing and how it will affect future generations seem wholly untroubled by the existence of a $12T national debt.

    • Tel says:

      It’s $20T not $12T but who’s counting?

      https://fred.stlouisfed.org/series/GFDEBTN

      Someone pointed out to me recently that Trump has (very slightly) turned around the Federal Debt growth in the past 6 months. Yes it has actually started to go down.

      Some of this may be accounting trickery (wouldn’t be the first time) but keep an eye on what’s going on there, because if Trump can keep that sort of thing going for a couple of years… a whole lot of fiscal conservatives, Tea Party supporters and Libertarians are likely to start being impressed.

      Hey… gotta believe in something, right?!?

      • Andrew_FL says:

        It must be Trump despite no major legislative changes having occurred under him as yet. Couldn’t possibly be normal subannual noise or Republicans reducing the deficit without any help from Trump for six years already or anything like that.

      • Andrew_FL says:

        For reference, here’s where the daily debt data is archived:

        https://treasurydirect.gov/NP/debt/current

        Current most recent day is 7/28/17. I can look back to 2005 with daily data. Turns out a decrease over a period as long as 1/20/17 to 7/28/17 is not unprecidented. The Debt also went down from 4/9/13-10/16/13. Did you notice then? Did you think to yourself, wow, I’ll be impressed if Obama can keep that up?

        • Tel says:

          The Debt also went down from 4/9/13-10/16/13. Did you notice then?

          Uhhh, yeah I noticed. It was all over the news around the world. They nominally shut down the US government at the time.

          https://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis_of_2013

          Did you think to yourself, wow, I’ll be impressed if Obama can keep that up?

          Oh course I never thought that. Obama was fighting tooth and nail to open the spigot right up again… and the gutless Republicans backed down as they are wont to do.

          • Andrew_FL says:

            Next tell me what happened from 3/2/15 to 9/3/15

            • Tel says:

              There was a microscopic budget reduction caused by the residual pre-programmed Sequester legislation here:

              https://www.law.cornell.edu/uscode/text/2/901a

              Very quickly the military started grumbling because you know, trying to do more with less ain’t their schtick. Obama worked hard to undermine the Sequester and get the spending show back on the road again.

              http://www.defensenews.com/congress/2015/01/29/sequestration-gop-dems-don-t-have-a-plan/

              Obama will travel to Philadelphia to meet with House Democrats at a caucus retreat, and is expected to provide details of his 2016 federal budget plan. In it, the White House says he will for the second consecutive year propose ending sequestration. the across-the-board domestic and defense budget cuts.

              Obama will release that budget plan on Monday, including a $534 billion base Pentagon spending plan and a $51 billion overseas contingency operations (OCO) request.

              The White House says the federal spending plan “will reverse harmful sequestration cuts and instead show how we can invest in his vision for middle class economics by making paychecks go further, creating good jobs here in the United States, and preparing hardworking Americans to earn higher wages.”

              The Obama budget will seek to “fully reverse those cuts for domestic priorities, and match those investments dollar-for-dollar with the resources our troops need to keep America safe,” the White House said.

              Yeah, that’s right… the Dem’s pull out the old “keep America safe” line now and then when it suits them, just like the Neocons do.

              • Andrew_FL says:

                And libertarians never give Republicans any credit unless they’re life long Democrats named Donald Trump.

              • Tel says:

                IMHO the Tea Party movement deserves credit for the Sequester.

        • Tel says:

          Just for hysterical reference… my somewhat cynical comment on the topic of debt in 2013.

          http://consultingbyrpm.com/blog/2013/10/a-move-to-significantly-weaken-the-debt-ceiling.html#comment-75941

  8. Major.freedom says:

    “Ok sure, -5 is real bad, but when compared to hypothetical 7, a -5 gives us a 2, and 2 is double 1.”

    This is kind of how I see the argument. Standard sales strategy.

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