A nice summary of the latest research showing that once again the welfare cost of climate change is small except under the most extreme scenarios.
2% of national income is not something to declare a national emergency over unless you are in a very poor country.
Richard Tol also mentions that there has only been 27 studies of the economic costs of climate change:
Twenty-seven estimates is a thin basis for any conclusion. Researchers disagree on the sign of the net impact; climate change may lead to a welfare gain or loss. At the same time, researchers agree on the order of magnitude. The welfare change caused by climate change is equivalent to the welfare change caused by an income change of a few percent.
- That is, a century of climate change is about as good/bad for welfare as a year of economic growth.
As Tol wrote elsewhere, the reason why there are so few studies of the welfare cost of global warming is governments and bureaucracies do not like the small numbers they yield so they pre-emptively do not fund such research.
Few economists work full-time on the economics of climate change as their research results are too moderate to win repeat business and further research grants. Importantly, there is vicious criticism of what you say. Much better to just work on other topics.
One of the great tactical victories of the climate activists, I resisted the temptation to call them climate alarmists, is they keep going on about the science is settled and whether you are accepting the scientific results.
I have long argued let the science be settled, only the economics matters. The climate change activists do not want to talk about the economics that much except for the estimates by that political hack Lord Stern. Lord Stern has been on the losing side of history ever since he wrote a bad review of PT Bauer’s Dissent on Development where he said:
Dissent on Development is not a valuable contribution to the study of development.
The Stern Review puts the costs of unmitigated climate change at 5–20% of GDP (now and forever). The Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) finds differently.
HT: Lorenzo M Warby
Oct 25, 2015 @ 13:35:10
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