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Has Nordhaus Demonstrated We Better Do Nothing About CO2 emissions?

Kudos to the climate-change-believers at the New York Review of Books for providing almost 3 full pages to climate-heretic Freeman Dyson’s review of William Nordhaus’ “A Question of Balance: Weighing the Options on Global Warming Policies” (Yale University Press) (and of Ernesto Zedillo (ed)’s “Global  Warming: Looking Beyond Kyoto”).

Well it does provide a welcome change from the usual doom-and-gloom of Hansen, Flannery and McKibben, doesn’t it

Dyson (whose article has been rebuked on RealClimate with way too quick a contempt) doesn’t actually deal with the reasons for his skepticism on the dangers of global warming. After a long preamble on how efficient vegetation is at capturing atmospheric carbon dioxide, the NYRB article deals (among other things) with Nordhaus’s conclusions about costs and benefits of various possible climate-related policies, in a 100- and 200-year timeframe.

First of all, Nordhaus is very convinced about the need to put a “price” to carbon, to avoid “economic inefficiencies”.

It doesn’t sound such a bad idea, if the majority of people are truly convinced CO2 is a harmful emission. My main concern is, how does anybody find out what that “carbon price” should be, if not an arbitrary value?

As Dyson reports, Nordhaus follows “the conventional wisdom of economists” and does all computations for a 4% discount rate.

For mysterious reasons, this has become a point of contention, with the Stern Report using a discount rate close to 0%, and the RealClimate guys rather naively trying to argue for an equivalence between people actually living today and people possibly living in the future. Luckily, an AGW-believer with a solid experience in economics has torn such equivalence to pieces. It simply makes no sense, morally-economically speaking.

What is the point of stealing from the people of the present thereby removing plenty of resources from the very people of the future one is trying to provide resources to?

And what is the moral case, outside of economics? Well, let’s say you have a sick child and a single dose of medicine…would you really withold it just in case you would have another child, five or ten years in the future?

My criticism of Nordhaus is different. I would have rather preferred computations based on a progressively fuzzier discount rate, since the future gets harder and harder to predict (obviously) the further we try to look into the…future!

Leaving the rate at 4%, Nordhaus’ 1-century results are the following, compared to a “do nothing/business-as-usual” (BAU) situation:

(a) with a continuously-adjusted carbon tax, a $3 trillion net gain
(b) with an updated Kyoto protocol, a $1 trillion net gain (with the US), and zero (without the US)
(c) with draconian, Stern-like limits on emissions, a $15 trillion net loss
(d) with drastic-but-gradual, Gore-like limits on emissions, a $21 trillion net loss
(e) if a cheap way to capture and store CO2 (“low-cost backstop”) is discovered, a $17 trillion net gain

Dyson reports the conclusions as:

(1) Avoid the ambitious proposals
(2) Develop the science and technology for a low-cost backstop
(3) Negotiate an international treaty coming as close as possible to the optimal policy, in case the low-cost backstop fails
(4) Avoid an international treaty making the Kyoto Protocol policy permanent.

These objectives, according to Dyson, are valid for economic reasons, independent of the scientific details of global warming.

I am not sure I can agree with the above.

What I see is a strong case for doing absolutely nothing.

In scenario (a), in fact, the total loss for BAU is about $15 billion per year. Not much to cry about, really. 

Just the complex mechanism that needs to be setup and run for a continuously-adjusted carbon tax, with its load of intrinsic inefficiencies, should be more than enough to bring such a loss to zero.

Kyoto-like interventions (scenario (b)) look absolutely irrelevant, and of course both Stern and Gore (scenarios (c) and (d)) have the single-minded goal to make us all miserable (starting with the Chinese).

The one “hope” is in carbon capture and storing, something presented by Dyson in his preferred terms of genetically-modified trees that could reduce the atmospheric CO2 content “by half in fifty years”.

But…if you believe in CO2 as a greenhouse gas, reducing its atmospheric concentration by half will surely sound like absolute madness…a one-way trip to a worldwide refrigerator?


All in all, then, it looks like the work of a convinced AGWer such as William Nordhaus has been useful in identifying what to do regarding CO2 emissions: nothing, zero, zilch, nada.

Will that accelerate the end of the AGW madness? I don’t think so. Perhaps the above is why Lord Stern, well aware of the overall situation, went through all the pains of trying to argue for a quasi-zero discount rate.

If logical arguments show the best course of action is to do nothing, that concept by itself will simply convince AGWer to become gloomier prophets of doom than ever.

You see…there simply is no AGW worry without catastrophism.

0 replies on “Has Nordhaus Demonstrated We Better Do Nothing About CO2 emissions?”

[…] The problem with Susan Scott's climate change report is that it is a policy document for the EU's 2012 – 2020 climate plan. This is an extremely stringent plan and may not be the best way forward. At an EU conference in Valencia in 2007 (which for the life of me I cannot locate the powerpoint link) the key impacts on human welfare from global warming were set out. These were an increase in the population at risk of Malaria of 300 million, of hunger – 200 million, coastal flooding – 100 million and water stress a staggering 3 billion. All to occur with 3C of warming or in roughly 2100 The figure for water stress is from the Stern Review. The IPCC's 2007 report actually reports that there will be fewer people at risk than today because of an expected increase in the hydrological cycle. A point, it should be added, that is made implicilty. Indur Goklany, a research analyst with the US's Cato Institute makes the following cogent argument. Using official UN figures, the total population at risk (TPAR) from Malaria in 2085 is projected to be 8.3 billion. Global warming would therefor contribute to just 3.5% of the total. The Kyoto protocal will cost $165bn per year and if held constant would only reduce temps by 7% in 2085. So for $165bn/year we could reduce the TPAR of Malaria by 0.2%. The EU 2020 plan is estimated to cost €60bn/year for the EU alone and will make no discernable increase in temperature reduction over Kyoto. (Lomborg 2008) According to the UN Millenium Development project, for just $3bn/year we could reduce the total burden of Malaria in the world by 75% through focused adaptation measures and direct development aid. For example, providing bed nets, improved healthcare and education provisions and improving nutrition. All of these would lead to the elimination of Malaria because the disease is basically one of poverty. This is also a no regret policy. This argument applies just as effectively to the other three global impacts mentioned above. More details below. If the EU truly wants to leave future generations with more welfare and a greater stock of resources to have at their disposal then this is better served by focused adaptation rather than mitigation. To put this into another perspective, if the EU plan is based on the Stern review then the cost of the plan to 2050 would be $38trillion. The total estimated cost of global warming this century is $23 trillion. (Nordhaus 2008 and below) Has Nordhaus Demonstrated We Better Do Nothing About CO2 emissions? The Unbearable Nakedness of CLIM… […]

thank you Hal. Has Dyson incorrectly reported any of Nordhaus’s statements, in your opinion? And what do you think about the consequences of the scenarios described above?

Judging from your review I do not believe you even bothered to read the book. Professor Nordhaus believes global warming is a serious problem which we should address rather then ignore. He does arrive at estimates of an optimal carbon tax which he thinks should be established and which if his model is close to correct would achieve huge savings. He shows that there would be huge return on investment is we can find alternative energy sources suggesting the very large public investment in alternate energy sources would be a good investment.

Here’s an article that emphasizes the point I’ve tried often to bring to people’s attention. Namely, that CO2 is such a tiny, fractional part of our atmosphere, that it becomes the tail of a Chi Hua Hua wagging an elephant. And the anthropomorphic contribution to this alleged “greenhouse” gas is so irrelevant that we could completely shut off all manmade sources of CO2 and still barely have any effect on CO2 levels.

Gore and his goons want us to spend trillions….of which he and friends will (and are) personally profit hundreds of billions….to fight a completely nonexistent problem. It has all the credibility of WMD in Iraq and Gore’s Styrofoam Antarctica ice shelf .

“Carbon dioxide is 0.000383 of our atmosphere by volume (0.038 percent),” said meteorologist Joseph D’Alea, the first director of meteorology at The Weather Channel and former chief of the American Meteorological Society’s Committee on Weather Analysis and Forecast.

“Only 2.75 percent of atmospheric CO2 is anthropogenic in origin…. “We are responsible for just 0.001 percent of this atmosphere. If the atmosphere was a 100-story building, our anthropogenic CO2 contribution today would be equivalent to the linoleum on the first floor.”

Sizzling study concludes: Global warming ‘hot air’
‘You can spit, have same effect as doubling the carbon dioxide’
Posted: August 20, 2007
10:07 pm Eastern

© 2008

A well argued case. The argument for doing absolutely nothing is overwhelming.
Unfortunately reasoned arguments count for nothing in a world driven by hysteria, panic and woolly thinking.

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