Thursday, April 3, 2014

No Big Deal

I know what I want
But I just don't know...
how to go about getting it
- Jimi Hendrix


       The new IPCC stuff is out.  And along with the usual parade of horribles, there is a new twist.  

     Climate change is no big deal.

     That's right.  No big deal.

     At least, no big deal where it counts - in the economy.     Even if the temperature went up 2.5 degrees,  it would only shave off  between .2 and 2% of global income.  As they said in the Guardian:

              "Why bother to cut greenhouse gas emissions at all if that's the limit of the cost?

        As many of you will remember the Stern Review, came to a very different conclusion.  It concluded that the economic implications of a BAU strategy would be  an economic loss of 5-20%.   

       This time around, the IPCC relied less on Stern, and more on one of Stern's critics,  Dr.  Richard Tol.  see here.  Naturally there are plenty of charges and counter charges.   I am not able to sort it out.   But anyone who has participated in or review the various type of economic modelling or  "cost benefit" reviews can attest that modelling is not merely inexact, but can be easily manipulated by minor tweeks to assumptions.    The IPCC has adopted the model that shows little economic impact.  Stern disagrees.  

"As Nicholas Stern - the UK economist who compiled the Stern Review of the economics of climate change in 2006 - noted in a paper last year that one of the standard models used to calculate costs produced only a 50 per cent reduction in GDP if global temperatures rose 19 degrees. 

      Perhaps, the more interesting question is why did the IPCC hired Tol ?     Given his body of work, it would be fairly clear what the result would be.   Given that decision, what can we reasonably expect from the IPPC, and the countries it represents?

         Dave Cohen has long noted that this is not the first time the IPCC has made what might be called "magical" assumptions.  This was also noted by  Kevin Anderson's presentation Real Clothes for the The Emperor.   In that case,  the magical assumptions, led to the conclusion that we could stay below 2 degrees without having any significant effect on economic growth.     Cohen notes some of the magical thinking that went into that conclusion : including, assuming that a low cost CCS technology will emerge, and assuming the low cost bio fuel will be  created - neither of which have much basis in today's technology -  Its the equivalent of saying "Hey we'll think of something"  See here.  

     One of  Cohen's earlier posts  suggest that IPPC's approach is not that unusual, that it merely reflect the underlying ethos of our modern world view.   Economic growth will continue,  because it must continue.   All ecological problems will be addressed by technology.   Perhaps this explains the IPCC's current view on economic impacts associated with BAU.    The IPCC is sending us a signal.   If Climate Change has no impact on economics, there is no reason for action.   Perhaps the message is,  "Do Nothing , Wait for The Technological Miracle,   We Will Adapt"

Taking a dispassionate look at the "logic" which holds sway in this "wondrous land whose boundaries are that of imagination," we are forced into some very odd conclusions. As noted above, the salient property of the RCPs is that economic growth occurs in each one regardless of the assumed emissions pathway (Figure 1, right-panel). The standard economic story assumes that global GDP growth will be driven primarily by technological innovation.
We should therefore expect viable, cost-effective and game-changing technologies to emerge in the next 87 years. If global warming (among other environmental concerns) is causing pain which hinders global GDP growth, we should reasonably expect the emergence of powerful geo-engineering technologies which will ease or remove that pain at some unknown time in the future.
It then becomes "logical" in the Twilight Zone to do nothing about climate change now because actions which would decisively reduce emissions may cause a lot of (presumably transitory) economic pain. It makes more sense to simply wait for the next technological miracle to arrive in some future where the world is far richer than it is now. In that more fruitful world, humans will have sufficient wherewithal and flexibility to mitigate or eliminate any environmental problems which may arise. 

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