Climate economics is a half century old. Its founder, William Nordhaus, has been recognized with the Nobel Prize in Economics. A small army of climate economists have followed in Nordhaus' footsteps in modeling climate change and how to fix it. In the process, they've inadvertently started a climate war, pitting the young against the old and climate-endangered countries against carbon-producing countries. The climate war reflects reliance on bad economics -- even worse, the subtle substitution of religion for economics.
One little problem. The single largest source of CO2 emissions in the world today is China. You can talk about win-win solutions. They are only interested we win you lose solutions.
2/3rds of the earth's population lives in Africa and East, South, and Southeast Asia. They are not worried about the things that rich white liberals in Europe and North America obsess over like climate change. They worry about giving their people a rising standard of living. They can, will, and are using fossil fuels to build their economies. Because of this CO2 in the atmosphere is going to continue to rise.
bThere is less than no chance that they will respond to your arguments no matter how clever they are. Telling people that you know what their self interest is and how they should pursue it is the fast track to being completely ignored.
The US should focus its efforts on practical adaptations. If the sea level rises, we should build sea walls or move to higher ground. If there are going to be more forest fires, we need to change our forestry practices to limit fuel build up.
As an economist and a huge admirer of your financial planning work, I am very disappointed in this podcast. First of all, invoking Greta Thunberg in any serious conversation about climate and economics is odd given that she is an expert on neither. But as far as I can tell, your analysis (I’ve also read your paper) seems to ignore a very simple economic reality about the interaction of climate and human flourishing. To be specific, economic well-being and climate are hardly correlated. For example, two of the wealthiest and most populous cities in the world are Phoenix, AZ and Minneapolis, MN. Both of them have extremely harsh climates. In fact, in the world of 2200 where your analysis assumes India will be far worse off than it is today, it’s climate will still mostly be less extreme than today’s Phoenix, AZ. Today, the GDP per capita of Phoenix is about $45,000. Bangalore, India has a per GDP per capita of $7,500. These differences have almost nothing to do with the climate of these two cities. Instead, the difference has everything to do with economic freedom along with universal access to cheap energy and all that it provides…..safe and livable shelter, medicine, irrigation, transportation, high-tech agriculture, and so forth. I would agree that Bangalore without those things would suffer from an even harsher climate. But with them, Bangalore can thrive independent of small changes in its climate.
The climate of 1900 in Phoenix, AZ was hardly livable even thought it was 1.5C cooler. But today, Phoenix is a thriving metropolis with a growing population. Indeed, contrary to the climate change induced migration damages predicted by the literature, people are migrating into Phoenix in droves, despite the extreme summer heat and drought. To the extent that climate change has had any impact on life in Phoenix since 1900, the advances of modern society have completely overwhelmed them. As the most obvious example, life expectancy has almost doubled. Arguably the most important advance of the 20th and 21st centuries enabling this improvement in the human condition has been cheap and ubiquitous energy, most of it provided by fossil fuels.
The point is, if India experiences the same economic improvement over the next 100 years that Phoenix did in the last 100, no realistic amount of climate change will even be noticeable in terms of overall human welfare. Without question, the best way for India to realize this improvement is by using the cheapest and most reliable form of energy. Today in India, that energy comes largely from coal and other fossil fuels. Taxing those forms of energy seems cruel and counterproductive.
In my view, all the effort spent on trying to reduce climate change (at best a near impossible task given global politics) should be spent on figuring out how to make Bangalore more like Phoenix of 2024 and less like Phoenix of 1900. Tinkering with the edges of temperatures by taxing CO2 is a fool’s errand in that context.
One little problem. The single largest source of CO2 emissions in the world today is China. You can talk about win-win solutions. They are only interested we win you lose solutions.
2/3rds of the earth's population lives in Africa and East, South, and Southeast Asia. They are not worried about the things that rich white liberals in Europe and North America obsess over like climate change. They worry about giving their people a rising standard of living. They can, will, and are using fossil fuels to build their economies. Because of this CO2 in the atmosphere is going to continue to rise.
bThere is less than no chance that they will respond to your arguments no matter how clever they are. Telling people that you know what their self interest is and how they should pursue it is the fast track to being completely ignored.
The US should focus its efforts on practical adaptations. If the sea level rises, we should build sea walls or move to higher ground. If there are going to be more forest fires, we need to change our forestry practices to limit fuel build up.
Larry,
As an economist and a huge admirer of your financial planning work, I am very disappointed in this podcast. First of all, invoking Greta Thunberg in any serious conversation about climate and economics is odd given that she is an expert on neither. But as far as I can tell, your analysis (I’ve also read your paper) seems to ignore a very simple economic reality about the interaction of climate and human flourishing. To be specific, economic well-being and climate are hardly correlated. For example, two of the wealthiest and most populous cities in the world are Phoenix, AZ and Minneapolis, MN. Both of them have extremely harsh climates. In fact, in the world of 2200 where your analysis assumes India will be far worse off than it is today, it’s climate will still mostly be less extreme than today’s Phoenix, AZ. Today, the GDP per capita of Phoenix is about $45,000. Bangalore, India has a per GDP per capita of $7,500. These differences have almost nothing to do with the climate of these two cities. Instead, the difference has everything to do with economic freedom along with universal access to cheap energy and all that it provides…..safe and livable shelter, medicine, irrigation, transportation, high-tech agriculture, and so forth. I would agree that Bangalore without those things would suffer from an even harsher climate. But with them, Bangalore can thrive independent of small changes in its climate.
The climate of 1900 in Phoenix, AZ was hardly livable even thought it was 1.5C cooler. But today, Phoenix is a thriving metropolis with a growing population. Indeed, contrary to the climate change induced migration damages predicted by the literature, people are migrating into Phoenix in droves, despite the extreme summer heat and drought. To the extent that climate change has had any impact on life in Phoenix since 1900, the advances of modern society have completely overwhelmed them. As the most obvious example, life expectancy has almost doubled. Arguably the most important advance of the 20th and 21st centuries enabling this improvement in the human condition has been cheap and ubiquitous energy, most of it provided by fossil fuels.
The point is, if India experiences the same economic improvement over the next 100 years that Phoenix did in the last 100, no realistic amount of climate change will even be noticeable in terms of overall human welfare. Without question, the best way for India to realize this improvement is by using the cheapest and most reliable form of energy. Today in India, that energy comes largely from coal and other fossil fuels. Taxing those forms of energy seems cruel and counterproductive.
In my view, all the effort spent on trying to reduce climate change (at best a near impossible task given global politics) should be spent on figuring out how to make Bangalore more like Phoenix of 2024 and less like Phoenix of 1900. Tinkering with the edges of temperatures by taxing CO2 is a fool’s errand in that context.