Alternative energy sources are no substitute for low-cost, zero emissions nuclear power | AEIdeas
13 Jun 2014 Leave a comment
in economics of climate change, environmental economics, environmentalism, global warming
How Free Markets Will Beat Climate Change: Q&A with Matthew Kahn
03 Jun 2014 Leave a comment
in economics of climate change, environmentalism Tags: Matthew Kahn
David Friedman “Global Warming, Population, and the Problem with Externality Arguments”
01 Jun 2014 Leave a comment
IEA Graphic Shows How to Radically Reduce CO2
21 May 2014 1 Comment
in applied welfare economics, economics of climate change Tags: global warming
Climate policy targets revisited | Richard Tol
26 Apr 2014 Leave a comment
in applied welfare economics, economics of climate change, environmental economics, environmentalism, politics Tags: global warming, Richard Tol
The IPCC’s Fifth Assessment Report estimates lower costs of climate change and higher costs of abatement than the Stern Review. However, current UN negotiations focus on stabilising atmospheric concentrations of greenhouse gases at even lower levels than recommended by Stern.
This column argues that, given realistic estimates of the rate at which people discount the future, the UN’s target is probably too stringent.
Moreover, since real-world climate policy is far from the ideal of a uniform carbon price, the costs of emission reduction are likely to be much higher than the IPCC’s estimates.
PRTP is the preferred rate of time preference used in net present value calculations.
What global warming will cost us if we do nothing
18 Mar 2014 1 Comment
in David Friedman, economics of climate change, environmental economics, Public Choice Tags: climate change, global warming, ice ages, social cost
David Friedman at Ideas delved into the best estimate of the global cost of global warming – by William Nordhaus – $4.1 trillion this century. This is $48 billion a year – 1/20th of one per cent of world income! Friedman then asked this:
Friedman’s even better argument on the social costs of global warming is that the costs of unlikely but catastrophic risks are included in the social cost arithmetic to make the problem serious. Without including them, global warming up to about a 2-degree warming provides a net benefit.
Friedman shows great insight when he goes on to say that there is “no similar attempt to take account of low probability, high cost consequences of preventing global warming”.
That low probability, high cost consequence, which will occur sooner or later, is the next ice age. The next ice age could include a drop in sea levels of three hundred feet and half a mile of ice over the top of London and Chicago. That would bring a new meaning to climate change refugees. We are in a relatively warm period – an interglacial – in an ice age that started two million years ago.
Friedman asked whether “It is at least possible that global warming is all that is preventing the interglacial from ending”.
The great tactical victory of environmentalists is keeping the debate on the science going because even if the science is right, the economic costs are small.
How much will global warming cost is the correct question for policy debate. Let the science be settled!
Economists have no more expertise to judge the science of global warming than they do in judging the science behind the inevitability of super volcanoes going off again such as the one just north of me. The Yellow stone national park super volcano is 50,000 years overdue, by the way.
Economists can comment on the likely consequences, intended and unintended, of different choices and the constraints that different national and international institutional frameworks place on what policy choices might be made.
The chances of India, China and the rest of the Third World agreeing to forego or even slow their economic development to fight global warming is zero even before you consider the international collective action, verification and free rider problems. Adaptation and ‘richer is safer’ are the only game in town whichever way the climate goes!
Utopia, you are standing in it! 
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