7th July 2011
CO2 could make our super-rich future generations slightly worse off!
In the great debate about "climate science", here's an economist's view that goes against the need for any "urgent" action. (Not all economists think like this.)
Yale University economist Robert Mendelsohn has long been skeptical [PDF] of the more alarming projections of future damage caused by climate change.
So how much damage does he think that the climate change will cause? In a recent study for the World Bank on the annual costs of increased extreme weather events, Mendelsohn concludes that by 2100 “climate change may increase the overall damage from extreme events by $84 billion or 0.015 percent of world GDP.”
“Evidence to support aggressive greenhouse gas emissions targets does not yet exist,” said Mendelsohn. [Source]
Note that the harm projected (0.015 percent of world GDP) is a reduction from a world GDP that will be at least six times greater than what it is today.
Simplistically speaking, if K is the today's GDP then we are talking about reducing future GDP by 0.015 per cent of 6K. How bad can that be?! If you are six times richer, how does a tiny bite into your pocket matter?
But Mandelsohn has not not accounted for the entire set of costs and benefits. Overall, I have no doubt that the benefits of increased CO2 significantly outweigh its costs.
In any event, ALL IPCC projections have been thoroughly rebutted. The IPCC is a total joke. There simply isn't a problem!
So why panic? Why snuff out today's economic development for the sake of preventing the people born 100 years later – who will be SIX times richer than us – from becoming slightly worse off (just 5.9 times richer than us)?
See also:
- The great boon of CO2
- CO2 – at its current concentrations – is INCAPABLE in warming the globe significantly
- The common sense CO2 decision tree
and many other blog posts I've written under the tag, "climate change".
"Note that the harm projected (0.015 percent of world GDP) is a reduction from a world GDP that will be at least six times greater than what it is today."
"In any event, ALL IPCC projections have been thoroughly rebutted. The IPCC is a total joke. There simply isn't a problem!"
Why do you feel able to forecast GDP with such confidence but decry efforts to forecast climatic changes? Both systems, the economy and Earth's climate, are notoriously complex; but at least the latter rests upon well-understood physical principles.
Dear Anonymous
Your ignorance of economic history comes through very clearly in your statement that we can’t have confidence in GDP growth. For over two centuries, GDP has grown (where freedom exists) by around 2 per cent per annum. There is simply NO REASON why it won’t continue to grow at this rate, for it is based on innovation and human freedom.
Re: climate of course the reality is otherwise. The idea of forecasting 100 years into the future is very challenging, and almost certainly likely to lead to false conclusions. Despite that, I can predict that there will not be more than 1 to 2 degrees of warming in this century.
S