January 30, 2012
More climate change denialism in the Wall Street Journal There's no need to panic about global warming because there no compelling scientific argument for drastic action to 'decarbonize' the world's economy. It resurfaced in the The Australian. The argument is critiqued here.
The bit I liked the best was the policy idea: that we do nothing for the next several decades:
A recent study of a wide variety of policy options by Yale economist William Nordhaus showed that nearly the highest benefit-to-cost ratio is achieved for a policy that allows 50 more years of economic growth unimpeded by greenhouse gas controls. This would be especially beneficial to the less-developed parts of the world that would like to share some of the same advantages of material well-being, health and life expectancy that the fully developed parts of the world enjoy now. Many other policy responses would have a negative return on investment. And it is likely that more CO2 and the modest warming that may come with it will be an overall benefit to the planet.
That's the position of Rupert Murdoch's media--- take no serious action to reduce greenhouse gas emissions including shifting to cleaner and renewable energy. This position ignores that the totality of impacts of global warming — warming, acidification, extreme weather, Dust-Bowlification — is showing evidence of harm to the biosphere, biodiversity, and agriculture in particular. These are what economists call negative externalities of economic growth.
In this 2007 study entitled The Challenge of Global Warming: Economic Models and Environmental Policy Nordhaus concludes thus:
The summary message of this study is that climate change is a complex phenomenon, subject to great uncertainty, with changes in our knowledge occurring virtually daily. Climate change is unlikely to be catastrophic in the near term, but it has the potential for serious damages in the long run. There are big economic stakes in designing efficient approaches. The total discounted economic damages with no abatement are in the order of $23 trillion..... In the author’s view, the best approach is one that gradually introduces restraints on carbon emissions. One particularly efficient approach is internationally harmonized carbon taxes – ones that quickly become global and universal in scope and harmonized in effect.
So the Wall Street Journal is misrepresenting Nordhaus analysis of the tradeoff in energy and environmental policy, his position with respect to negative externalities and his advocacy of externality taxes as the best fiscal instrument rather than the use of subsidies.
As he argues here the need for taxes on energy externalities such as carbon emissions is central to our ability to reduce the harmful side effects of economic growth. Environmental taxes are efficient taxes because they tax “bads” rather than “goods.” Environmental taxes have the unique feature of raising revenues, increasing economic efficiency, and improving the public health.