No, we don’t think we do believe this climate change plan
Much trumpeting of how, clearly and obviously, the GOSPLAN outline of how to Net Zero the British economy will be stupendous tractor producing statistics:
Achieving the UK’s net zero target by 2050 will cost less than a single oil shock and bring health and economic benefits while insulating the country against future costs, the government’s climate advisers have forecast.
Eliminating the UK’s reliance on fossil fuels by adopting renewable energy and green technologies, such as electric vehicles and heat pumps, would be the best and most cost-effective option for the future economy, the Climate Change Committee (CCC) found.
And, well, no, we’re afraid we don’t quite believe it.
Just to note we’d be fine with the Stern/Nordhaus solution, stick on the carbon tax and she’ll be fine. Our opposition is to the more nerdish end of the establishment gurning over their slide rules as they Commissar us all into compliance.
From the actual report:
These include health benefits from … active travel, …., and healthier eating habits.
You’ll walk everywhere and definitely no steak either. These are counted as benefits. We do not think those are benefits, no.
More seriously, two points:
There are two main ways to calculate carbon values in policy appraisal (Box 1.3):
– A social cost of carbon approach (which estimates the total global damages from climate change, and then scales this down to the damage cost associated with one unit of emissions).
– A target-consistent approach (which considers the cost of abatement required to meet pre-determined climate targets).
• The Green Book endorses the second approach to carbon valuation, but there continues to be debate over which approach is most useful in appraising climate policy.
In developing the Balanced Pathway, we used the Government’s target-consistent carbon values
That is, no consideration is given as to whether Net Zero by 2050 is the right thing to be doing. The plan is taken to be the thing that must be reached, therefore what are the least cost methods (not that we believe those either) of doing so? Rather than, given the whole palette of possible actions - including doing this slower - what’s the best thing to be doing? This is an insane basis for policy.
We even have it in the Stern Review - and more in Nodhaus - do not target an emissions level nor date, target the cost of the transition. So, we disagree with the very basis of the calculation itself.
Further:
Our efforts to reduce emissions will benefit countries beyond the UK. Equally, we also benefit from efforts to reduce emissions in other countries, which are considerable (see Section 1.4.2). SCC values account for the global benefit of emissions reductions, not just the benefit to the UK. The value of emissions reductions using this approach represents the climate damage that we are no longer causing in the UK, nor contributing to the rest of the world.
The way we understand that - and we’re open to correction if anyone desires to try - is that they’re including all the global benefits of UK emissions reductions. But that’s not the correct calculation at all. As we carry all the costs of UK emissions reductions then we must compare those costs with the UK benefits of those same emissions reductions. Not, at all, the UK costs - those we bear - and the global benefits - which we gain some tiny fraction of.
No, we’re not convinced at all.
As we say, we’re against the more nerdish end of the establishment gurning over their slide rules as they Commissar us all into compliance. The actual economists did look at this and did write reports, gain a Nobel, issue a Review and so on. Assuming this is a problem amenable to human intervention, one that something must be done about, stick on a carbon tax and she’ll be fine.
The only reason that we can come up with for why this scientific approach was not followed is that the nerds like Commissaring.
Tim Worstall