People still aren't understanding climate change


What's worse, it's the people insistent that they know all about climate change who are getting it wrong at a basic logical level. As ever here, we'll start from the idea that the IPCC is correct, that we've a problem, we're causing it and we should do something. Even then these people are still wrong.

In a comprehensive new study published in the journal Nature Climate Change, researchers propose a limit to future greenhouse gas emissions--or carbon budget--of 590-1240 billion tons of carbon dioxide from 2015 onwards, as the most appropriate estimate for keeping warming to below 2°C, a temperature target which aims to avoid the most dangerous impacts of climate change.

The study finds that the available budget is on the low end of the spectrum compared to previous estimates--which ranged from 590 to 2390 billion tons of carbon dioxide for the same time period--lending further urgency to the need to address climate change.

This is simply the wrong way to be calculating things. For once we've accepted the IPCC (sure, many don't, but for the sake of argument here we are) then we move over into economics. And economics is about costs and benefits. This is the very point that the Stern Review addresses, also the associated works of William Nordhaus, Richard Tol and so on.

The calculation is: how much damage will be caused? What will it cost to avoid that damage? The amount of work and effort we should put into avoiding that damage cannot, on any logical grounds, be more than the damage we avoid by doing that work and effort. To do so would be to make us all, and the future, poorer to no good reason. Thus all of our conversations have to be about the costs of doing whatever it is.

And that's when we get into problems with the sort of calculations above. Because quite obviously it costs more to change things quickly than it does to do so slowly. Partly because it takes time to develop new technologies, partly because there's a capital cycle to deal with. It's hugely cheaper to replace emitting technologies when we're going to replace them anyway than it is to insist on closing down assets now and replacing them. What's a cheaper way of introducing electric cars? Insisting everyone junk their current ones today or insisting that they get an electric one when the current one falls apart?


The problem with insisting that we've got to do everything faster is that it means that we've got to do everything in a more expensive manner. And thus, logically, that we should actually be averting fewer emissions over time rather than more. Because we are doing it in that more expensive manner.

All of the economists who look at this economic problem keep insisting that we should not have a temperature nor emissions target. We should and must have a cost target. So why is it that the rest of the world keeps charging up this wrong path?