Richard Tol Trolls Sir Nicholas Stern
The author of the controversial and famous “Stern Review” on climate change (in 2006) has recently come out with a piece in Nature arguing that economists need to change their models of climate change because “the consequences being assessed should include the damages to human well-being and loss of life beyond simply reduced economic output.” (This isn’t the only thing Stern says, but it’s one of his complaints.)
At IER I explain how Richard Tol, creator of the FUND model and one of the leading contributors to this literature, went ballistic on social media about this. It’s funny (“funny” for economists) and you should check it out. But here’s an excerpt from my quoting of Tol’s own model, so you can see just how much stuff is in these things:
The FUND model has been used for many purposes, but its main strength has always been the impacts of climate change. Earlier versions had 9 regions, and later versions 16. In this paper, we discard most of the model, and only retain the impact module. This part, however, is reparameterized for 207 countries…We now present the national impacts module of FUND 2.8…
The climate change induced impact on cardiovascular mortality is based on Martens (1998)…Heat- and cold-related cases are modeled separately, as are effects on people below and above 65 years of age. Heat-related cardiovascular disorders are assumed to be an urban phenomenon only. Respiratory mortality is treated in the same way as heat-related cardiovascular disorders, but is not limited to urban areas.
Schistosomiasis, dengue fever and malaria are assumed to be linearly related to warming. The vulnerability is based on the 1995 data in WHO (1995)…
Diarrhea mortality is more than linear in warming with a power of 1.14, while vulnerability falls with an income elasticity of 1.58…
Species loss varies quadratically with the rate of warming. The value of species loss is logistic in the rate of warming. The maximum amount that people are willing to pay to prevent climate change-induced species loss is set to be $50 per person per year for people with the average income in the OECD in 1990…
The impacts of sea level rise are derived from Hoozemans et al. (1993) and Bijlsma et al. (1996). There are no more recent global impact studies; see Nicholls and Tol (2006) for a current review. Without coastal protection, wetland and dry land losses are assumed to be linearly related to sea level rise. The global mean sea level is determined by a geometric series depending on temperature that is calibrated based on the IS92a scenario in Kattenberg et al. (1996). Dry land losses decline linearly with protection, but wetland losses increase linearly with protection…
The impacts of climate change on agriculture are based on the rate and level of climate change and on effects from CO2 fertilization. All are functions of temperature and are calibrated to Darwin et al. (1995), Fischer et al. (1996), Kane et al. (1992), and Tsigas et al. (1996). [P. Michael Link and Richard Tol 2011, pp. 4-6]
