Should We Act Now or Wait on Global Warming?
My research shows that there are indeed substantial net benefits from acting now rather than waiting fifty years. A look at Table 5-1 in my study A Question of Balance (2008) shows that the cost of waiting fifty years to begin reducing CO2 emissions is $2.3 trillion in 2005 prices. If we bring that number to today’s economy and prices, the loss from waiting is $4.1 trillion. Wars have been started over smaller sums.
David Freidman responds:
What he does not mention is that his $4.1 trillion is a cost summed over the entire globe and the rest of the century. Put in annual terms, that comes to about $48 billion a year, a less impressive number. Current world GNP is about $85 trillion/year. So the annual net cost of waiting, on Nordhaus’s own numbers, is about one twentieth of one percent of world GNP. Not precisely a catastrophe.
“So the annual net cost of waiting, on Nordhaus’s own numbers, is about one twentieth of one percent of world GNP. Not precisely a catastrophe.”
Not a catastrophe, but also its $48 billion less dollars spent by not waiting to reduce emissions.
However, does the net cost of waiting outweigh the cost of not reducing emissions?
This sounds like a question for the NCPA’s environmental blog!
http://environmentblog.ncpathinktank.org/
“If we bring that number to today’s economy and prices, the loss from waiting is $4.1 trillion.”
Regardless if the cost seems miniscule over the span of fifty years, we need to act now. This is an example of moving the burden on future generations.
But how high are the costs incurred to reduce carbon emissions. The costs of waiting are $4.1, but what about the costs of actually bringing that change to fruition.
I have to say that global warming is inevitable. All we should do is to defer it.
Why deter global warming?
http://healthblog.ncpathinktank.org/global-warming-may-be-a-good-thing/
Higher see level? less land?
The cost of some measure to reduce emissions is essentially zero. For example, raising petroleum taxes would have no net cost to the economy if the proceeds go entirely toward reducing other taxes (and are not squandered on special projects and incentives).
The net cost to the economy could even be negative if the taxes selected for reduction are ones that are more detrimental to growth than fuel consumption taxes.
Another variation on this theme would be to phase out the mortgage interest deduction in favor of lower tax rates.
Studies have estimated that the mortgage interest deduction results in homes that are 15 percent larger than would otherwise have been purchased. Add this to fuel burned in long commutes by people who buy more affordable homes outside the suburbs, rather than rent closer to the workplace.
Negative taxes, I could agree with that.
And your ideal carbon tax is not under serious consideration by anyone that matters.
Nothing rational ever is.
A few other problems with the “pay now” approach:
1) It presumes that our knowledge of climate CO2 sensitivity is adequate. In fact, the climate pause shows that the models used as the primary source of that knowledge are wrong. That doesn’t mean the problem doesn’t exist, but it means we don’t know the magnitude.
2) It ignores the likelihood that better alternative energy technologies will exist in the future, causing investment in current rather poor technologies (wind power, current solar) will be wasted.
3) Most importantly, it assumes that we actually can significantly change the CO2 concentration trajectory. But, evidence so far shows we cannot. The developing countries are not going to sentence their people to poverty now for the possible future harm of warming then.
Paying now for benefits way off in the future is the responsibility of the breeders, since we childfree folks have already done our part by not polluting the globe with ever more babies.