It Is Cheaper To Do Nothing Than To Prevent Global Warming

By Collin Maessen on 13th March 2013comment

Climate Changes, But Facts Don’t: Debunking Monckton

On the 19th of July in 2011 the National Press Club of Australia held a debate on climate change. In this video I will be analysing the claims Monckton made during the debate and if they are correct or not.

The reason I’m doing this is that Monckton challenges his critics to check his sources, or like he put it in this debate “to do your homework”. I’m going to follow him up on this to see if the scientific literature, and other available sources, corroborate what he’s saying.

Watch this video on YouTube

Video description

On the 19th of July in 2011 the National Press Club of Australia held a debate on climate change. I will be analysing the claims Monckton made during the debate and if they are correct or not.

In this particular section of the debate Monckton makes the following claim:

"it is clearly cheaper to do nothing about global warming and to adapt in a focused way to any consequences that are adverse that may occur from any warming that may occur than to spend any money whatsoever now on it. And that...is the overwhelming consensus in the peer-reviewed economic literature...a majority, in fact a near unanimity among economists show that it is greatly more expensive to try and intervene...than simply to sit back, enjoy the sunshine, and adapt in a focused way, as and if and only when necessary."

In this section I talk about examples of what it costs to implement a carbon pricing system and what the economic literature says on these costs.

Transcript

And how much will it cost? Around $127 billion over the next 10 years. And if you were to apply the Gillard method all over the world, your method as cost ineffective as her proposal, then it would take $60,000 per head of the world population just in the next 10 years, or 60 per cent of global GDP, just to forestall the 0.23 Celsius of global warming that the IPCC predicts will occur over the next 10 years.

And it is clearly cheaper to do nothing about global warming and to adapt in a focused way to any consequences that are adverse that may occur from any warming that may occur than to spend any money whatsoever now on it. And that, if you do science by consensus, as Professor Denniss does, is the overwhelming consensus in the peer-reviewed economic literature.

And it's the peer-reviewed literature that you find the true science, and reviews of that literature by Lomborg 2007 and Richard Tol in 2009 make it abundantly clear that the majority, in fact a near unanimity among economists show that it is greatly more expensive to try to intervene and to try Canute-like to tamper with the climate than simply to sit back, enjoy the sunshine and adapt in a focused way as and if and only when necessary.

Lord Monckton made the following two points in this clip:

It is more expensive to prevent temperatures from rising than just adapting to the changes.
The majority of economists in the peer-reviewed literature agree that adapting to climate change is cheaper than preventing it.

Firstly adaptation to increasing temperatures is not cheaper than preventative measures, as this hinges for quite a big part on the world warming only by 1 degree by 2100. Such a low temperature increase goes against the climate sensitivity we have seen in reconstructions of past climates. I already stated that the vast majority shows that this is around the 3 degrees mark for a doubling of CO2, the same number the IPCC uses.

He mentions the carbon tax will cost Australia 127 billion dollar, as I didn't know where he was getting this number from I asked him what he used for it. And he provided me with the paper “Is CO2 mitigation cost-effective?” written by him and published by the Science and Public Policy Institute.

The first thing that I'd like to point out is that this isn't a peer-reviewed paper. This certainly shows as there are a lot issues with it, but the main one has to do with how he calculates the cost-effectiveness of the Australian carbon tax. He calculates the cost of the tax against the increase in temperature expected by 2020. A period that is way to short to see the effects of CO2 emissions.

Another detail is that he uses the figure of 130 billion dollar over a ten year period compared to the 127 billion he mentions in the debate, but this is just a minor detail. As there are several issues with this number he uses, but the biggest one is how he calculates the cost-effectiveness in the paper which is severely flawed. Monckton ignores the benefits, and this renders his cost-effectiveness calculations essentially meaningless.

He also cites two sources, Lomborgh 2007 and Richard Tol 2009, in a manner which can easily be interpreted as meaning that these are peer-reviewed sources by how he introduces them. Also how he cited them is not enough to know what his exact sources are. Because of that I cannot be sure which papers he cited, and Monckton never responded to my enquiries about this.

However, I'm fairly sure what he's referring to with the Lomborg 2007 reference. As Lomborg published something in 2007, a book: “Cool It: The Skeptical Environmentalist's Guide to Global Warming”. This book is not part of the scientific literature and it's a book that isn't known for its accuracy.

As it goes way beyong the scope of this video to go through a book I'll defer to the review by the economist Frank Ackerman. In it he highlights several of the issues this book has with for example selective citation and thus misrepresenting the literature. He's by far not the only one who has been very critical of this book with how it represents this literature.

The other citation Monckton gave, Richard Tol 2009, I did find publications for in the scientific literature. And I eventually did manage to trace down which paper Monckton is probably referring to, which this time is a peer-reviewed paper.

However the paper Monckton cited actually disagrees with him, I'll read a bit from the conclusion:

A government that uses the same 3 percent discount rate for climate change as for other decisions should levy a carbon tax of $25 per metric ton of carbon (modal value) to $50/tC (mean value). A higher tax can be justified by an appeal to the high level of risk, especially of very negative outcomes, not captured in the standard estimates (Weitzman, forthcoming).

[...]

There is a strong case for near-term action on climate change, although prudence may dictate phasing in a higher cost of carbon over time, both to ease the transition and to give analysts the ongoing ability to evaluate costs, beneﬁts, and policy mechanisms.

The interesting part is that the Australian carbon tax is priced at 23 Australian Dollars per metric ton of carbon, which is cheaper than the 25 to 50 U.S. dollar price mentioned in this paper. Which means that Monckton cited a paper that actually supports the Australian carbon tax.

But lets ignore all this, and take a look at a real world example of a carbon pricing and trading system. In 2008 ten states in the U.S. Implemented a carbon cap and trade system to reduce the CO2 emissions made by the power sector by 10% by 2018. The states that are doing this are the previously mentioned Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.

All this is done via the Regional Greenhouse Gas Initiative, and they recently commissioned a study to examine the impacts of this cap and trade system. The results are broadly consistent with the economic study that predicted that benefits would outweigh the costs. For example New Hampshire has a consumer energy saving of 60.6 million dollar for an investment of 17.7 million dollar. This means consumers now have millions more to spend and help stimulate the economy.

We see such examples everywhere that implementing green technology pays off on its investments, often generating more jobs than for example the fossil fuel industry can. We also see examples of green technology paying for itself due to energy efficiency and reducing or eliminating the cost of fossil fuels.

Because of this there is actually a consensus among economists with climate change expertise that we should reduce greenhouse gas emissions. Economic studies consistently predict that the benefits will outweigh the costs several times over.

And that's the scientific consensus in the economic literature on global warming.