15
Jul
2019
Murphy Twin Spin
We’re back from the Contra Cruise, but now I’m headed to Mises U! Here’s some stuff to tide you over:
==> The Contra Krugman episode live from the Cruise.
==> My IER piece summarizing Oren Cass’s recent House testimony on the costs of climate change.
Cass says “A $2 trillion reduction in that prosperity represents the difference between a future, climate-change-free America that might be 4.0x wealthier than today’s and a climate-change-afflicted America that might be 3.9x wealthier. Costly, but hardly catastrophic.”
Am I missing something from his argument ? He tells us that we can have a climate-change-afflicted future for only $2 trillion more than if we opt for a climate-change-free future. Given this choice wouldn’t it be a no-brainer to go for the climate-change-free option ?
You’re missing the fact that you’re relying on politicians to get it exactly right. Why risk giving them power that could end up costing us dearly when the worst case of doing nothing is we achieve the same standard of living 2 years later, according to their studies?
You make a good point that in the general scheme of things 3% of GDP would be a small price to pay for less government (and probably get it back anyway thru other benefits of less government)
My concern is: what does living in a ‘climate-change-afflicted America’ entail ? Sounds like its somewhere between having the AC on a bit more and Armageddon. Given the (non-zero) possibility of the latter I think a moderate carbon tax on the externality of damaging carbon emissions (presented within a free-market framework) is a sensible thing to push for.
According to Cass the risk is nothing close to Armageddon. And what happens when China and India refuse to adopt those policies?
Neither Cass nor anyone else knows the precise consequences of climate-change. Its a risk assessment game with (in my opinion) some horrendous worse-case scenarios, but (according to Cass and others) a relatively low cost of mitigation (even if one factors in India and China failing to fully cooperate in a carbon tax)/
This exchange between you guys is so typical of this debate.
TRANSFORMER: ah! Cass shows us that climate mitigation policies are a no-brainer.
DAN: No actually he doesn’t show that at all.
TRANSFORMER: Well what does Cass know, anyway? I think those policies make a lot of sense.
That is a bit of a caricature of my comments Bob !
– I asked for clarification on whether Cass really was saying what I read him as was saying as if so it was hard to see why his evidence (whatever his intent) didn’t provide ammunition for the ‘take action’ crowd. (You attempt to address this below)
– Irrespective of Cass’s level of knowledge on the range of damage estimates from climate change (I seriously doubt he would claim he knows ‘the precise consequences of climate-change’) the data points he presented (again whatever his intent or what policies he may support)) are actually quite friendly (taken at face value anyway as he doesn’t mention the additional stuff you raise below) for those supporting a carbon tax.,
Transformer, I’m not certain of what Cass’ preferred policy option is. I’m guessing he opposes carbon taxes, period, but it’s conceivable he would favor a modest one; I don’t know. His main point in this testimony was that the people saying, “We need mitigation or our grandkids are screwed” are ignoring the scientific literature.
Also, that figure you are quoting is the *gross* harms of climate change. Enacting a carbon tax or other mitigation policies (in the world of these models) would reduce that gross figure but would also carry an economic cost, so the net change would be much lower, even if implemented perfectly.
Its possible that when he talks about a ‘climate-change-free America’, that he means a counterfactual America where climate change simply doesn’t happen to exist rather than one where policy has prevented it from occurring – which was my initial reading.
In which case any impact of climate policy on future GDP would presumably lower it below the 4x increase in wealth for a ‘‘climate-change-free America’’ that he quotes.
I am virtually certain Transformer that he is referring to a counterfactual where the US magically doesn’t suffer from climate change damages. After all, as I showed in this article, I can use the IPCC to show that the costs of limiting warming to 2C are about the same as the benefits.
Yes, in context I now think that is probably what he meant.
“The alarmist camp either downplays or completely ignores the fact that humans will grow richer and adapt to whatever changes lie in store.”
Both camps are alarmist. One is alarmed at the possible effects of global warming and the other is alarmed at the possible effects of taking action.
Cass indicates that the costs of taking action are nothing to get alarmed about.
He does no such thing. He indicates that the costs of taking the exact “right” action is slightly better than doing nothing, according to their own studies. That does not mean that the state couldn’t enact policies that would make us much much poorer.
“policies that would make us much much poorer.”
Alarmism in action.
Wait a moment … big government socialism has been tested in real world scenarios and did make a lot of people poorer (and also millions ended up dead, in horrible ways mostly related to starvation). That’s a bunch of proven data points: China, Russia, Vietnam, Cuba, Venezuela, Romania, plus the “National Socialism” variant which also made many people worse off (we can argue about the details but it is “big government” either way). Sure you might say, “It can’t happen here” but without a doubt it can happen.
On the other hand, Global Warming has never been proven to hurt anyone … except perhaps a handful of people who decided not to drink water on a hot day, and even then technology in the form of cheap electricity and air-conditioning has steadily reduced the risk.
Perhaps we can imagine future scenarios where Global Warming causes damage, but all the genuine measurements we have available right now, show that cold kills more people than heat, and that technology is the thing that protects people from their natural environment. Historically the Roman Warm Period and the Medieval Warm Period were both prosperous times leading to human flourishing. Satellite imagery in the modern era shows the coverage of green plants on Earth has been increasing for three decades coinciding with modern warming … meaning the observations we have in front of us, point to this being a good thing.
So “Alarmism” would be to claim that the imaginary scenario is more dangerous than the well known, tried and tested scenario.
No. Alarmism is to exaggerate the likely effects of something in order to cause alarm.
We are not going to outlaw animals, air travel, gasoline or barbeques. To say so is alarmist. There is not going to be forced veganism and to say so is alarmist.