5 % of GDP forever is a lot!

… as said by the wise CIP in the comments. Although I wasn’t quite sure how to interpret it. BTW, this is yet more Stern stuff – sorry.

So the first thing to say is… I’m not really happy expressing all this in terms of GDP. We could all be a lot happier on lower incomes if… well, if I was dictator of the world. If we hadn’t wasted billions invading Iraq and on the Child Support Agency and… I hope you get the point. Money isn’t everything.

But if we *are* discussing it all in terms of money, then we ought to notice the point that Tim Worstall has made – that the differences between A2 and A1B (SRES scenarios) are far bigger than 5%. So if we really want to maximise consumption (which is how Stern frames it) then we ought to push towards the A1 family… which is globalisation :-)

Comments

  1. In principle, I think that the economic analysis seems like a good idea, but I heartily doubt that economics has sharp enough tools to get sensible answers. The effects I’m most concerned with are not captured by the kinds of models economists like. What is the cost of a mass extinction, a lost habitat, a lost rain forest? A lot of my concerns are less about global warming than they are about the general question of habitat destruction, of which global warming is but one part.

    For the Anazazi at Chaco Canyon, the consequence of ecosystem destruction and climate change was a one hundred per cent reduction in GDP, until the present if not forever. When you visit their cities today you see land on which only a few rabbits and coyotes can survive. Ditto the Greenland Norse. On the positive side, the per capita decline was less, since all the people died out or left as well.

    Economists like to make models that start with stuff like: “assuming that the economy will grow at 2% per capita.” I think it’s much more useful to try to think about potential catastrophes and what might be done to prevent them.

    Nonetheless, we need to make plans for the next ten years and try to do a cost benefit analysis. The kinds of impacts we need to worry about 50 to 100 years out are the potential catastrophes, not the 5% effects.

    It just occurred to me that having disabused everyone of the notion that William’s “wise” crack was not purely ironic, I should just admit that I don’t really have much of a clue about how the world should plan these things. I am pretty sure that the world isn’t doing a very good job of it so far.

    [I can agree with that last bit. I too have no good plans (other than make me dictator). I fear we are doomed to pretend to do it via cost-benefit but actually via BAU -W]

  2. #2 Tim Worstall
    2006/12/22

    Globalisation does seem to be one of those no regret policies that we are all encouraged to adopt, doesn’t it?
    When Caroline Lucas (Green Party MEP) announced that the Stern Review meant we had to limit globalisation, that would should retreat to regional and local self-sufficiency, I rather choked on my cornflakes. She was describing the SRES A2 family, which is precisely the model that Stern used to get to the disaster that Lucas said we should avoid by doing that….
    I’ll admit that it’s a few years since I actually read through the whole of the SRES but I do wonder how many of those making pronouncements on the subject of climate change have actually read it at all.

  3. #3 guthrie
    2006/12/22

    Some form of energy accounting (Not taking energy as a unit of currency, but at least keeping track of it) might be a useful tool. If it costs less energy to grow much of our food here in the UK, especially fertilising it with home produced fertiliser (you know what i mean), compared to shipping or flying it around the world, then I know which I would rather do. But in economic terms, its fine to fly green beans in from Africa, never mind that it might be better if we just grew them here.

  4. #4 Hank Roberts
    2006/12/22

    SRES Scenarios — link above isn’t working; this?
    http://www.grida.no/climate/ipcc/emission/115.htm#fig51

  5. #5 Eli Rabett
    2006/12/22

    I always remind people about what happened in Europe when Rome fell. Progress is indeed not inevitable.

  6. Eli,

    Have you considered the possibility, that contrary to the “consensus” historical view, maybe the dark ages were actually dark due to changes in solar output?

  7. #7 Adam
    2007/01/02

    “What is the cost of a mass extinction, a lost habitat, a lost rain forest?”

    We can add to that list. What about conflict creation/avoidance through changing resource (esp. water) availability? Would increased conflict and thus military spending count as an economic plus or minus?

    Would (possible) increased reconstruction costs from whatever increased effects of whatever extreme weather may or may not result from global warming count as a plus or a minus?

    As for the globalisation issue, there may be some cross-purpose discussion using the term “globalisation” (even the TAR says: “Globalization is an increasingly popular term for an ill-defined collection of processes.”).

    The A2 scenario is described as “In the A2 scenario family, alternative energy technologies develop relatively slowly and fossil fuels maintain their dominant position in the energy supply mix. As oil and gas resources become scarcer and non-fossil alternatives remain underdeveloped, coal gains the leading role.”

    This I assume is due to the fact that less “globalisation” means that there is less dissemination of alternative technologies (I have been looking through the emissions stuff but it’s not especially easy to find this stuff explicitly stated – for me at least) because there is less trade.

    So the question seems to be to me, could alternative technologies be disseminated without also flying green beans around the world (and the other one I like to quote, selling Highland water in France and Evian water in Scotland)?

    Two more miscellaneous questions:

    1) How do the economic theories explain people who would rather work from home than earn more after commuting? Do we count as a plus or minus?

    2) If the Stern report had to fiddle things (scenarios, discount rate, possible climate sensitivities) to get an economic cost, then if we don’t fiddle things there is no economic argument to mitigate, only non-economic arguments?

    (NB no implications are meant in the above, merely my attempts to understand what is being, and has been, said).

    [You can attempt to measure these costs, by what people will pay to avoid or remove them. I sense that enviros would often rather try to not talk of things in economic terms (I tend to that side myself) partly out of a distrust that people are doing it properly (which amounts to not knowing or understanding the details of the analysis and not trusting the fairness of those doing it); and partly out of feeling that even if the economics says "kill that species" you still wouldn't want to agree to that.

    Its probably a fair point of view. And it will work in a political sphere; but it amounts to not engaging with the economics. Which may not be viable -W]

  8. #8 Adam
    2007/01/02

    Thanks for the response. Is there a way to make it easier to spot? The “[" & "]” can get lost – maybe “[*....*]” will make it stand out a bit better?

    “You can attempt to measure these costs, by what people will pay to avoid or remove them.”

    Which will leads to some “interesting” disagreements. :|

    I think there’s a third reason(linked to your second one) in that there’s a tendency for the thinking “Well if that’s the economically best route to take, we should take it.” Also a fourth, in that there may be a distrust (rightly or wrongly) of some of the economic theories (that may be) applied.

    [* I could try... is this any better? I may forget anyway... Yes, people will disagree. This occurs whenever something is valued on not the open market... like some of the privitisations that went on. But it didn't stop them.

    Distrust of econ theories: yes indeed. But that distrust is weakened because most of the people distrusting them don't understand them. In fact probably couldn't even state them coherently -W*]

  9. #9 Adam
    2007/01/02

    That’s better, thanks. It’ll mainly make a difference when you embed them within people’s posts.

    I think their distrust mainly stems from the (perceived) results of those theories. If economic policy is a black box, is it unfair to blame what it produces? Anyway, I’ve probably got a bit to general to be have any point here so I’ll let others carry on here.

  10. #10 guthrie
    2007/01/02

    Adam, you say:
    “This I assume is due to the fact that less “globalisation” means that there is less dissemination of alternative technologies (I have been looking through the emissions stuff but it’s not especially easy to find this stuff explicitly stated – for me at least) because there is less trade.”

    How on earth does that work? As far as I am aware, countries and companies have been borrowing/ stealing technology from each other for several hundred years. All that globalisation does is make it easier for big companies to bring in outside technology, but I see no reason why a country couldn’t bring in alternative technology without any problem; all they need to do is send some people to learn it, and put the money into factories and suchlike. Not to mention licencing, or else ignoring patents. (like China does)

  11. #11 Hank Roberts
    2007/01/03

    Paul Baer’s thoughtful piece here
    http://www.postnormaltimes.net/blog/
    asks some questions about the Stern piece I haven’t seen elsewhere. I have the feeling he and Hansen are both talking about a more hopeful alternative than Stern considers possible.

  12. #12 Adam
    2007/01/03

    “How on earth does that work?”

    I don’t know guthrie, it’s the impression I get from skim-reading the IPCC TAR section on the SRES scenarios. The A2 scenario is described (by others) as the “non-globalisation” scenario, but also by the IPCC as the scenario where coal is increasingly used as oil and gas stocks diminish. It may all be explained in a detailed reading, but I also find it a bit odd – hence my question.

    I’m saving my detailed reading for the AR4 so I was hoping that those who are up to speed on the economic arguments would be able to explain it.

  13. #13 Adam
    2007/02/13

    “When Caroline Lucas (Green Party MEP) announced that the Stern Review meant we had to limit globalisation, that would should retreat to regional and local self-sufficiency, I rather choked on my cornflakes. She was describing the SRES A2 family, which is precisely the model that Stern used to get to the disaster that Lucas said we should avoid by doing that….”

    Actually, it seems to me that she’s describing the B2 SRES scenario (as described in the AR4 SPM):

    “B2. The B2 storyline and scenario family describes a world in which the emphasis is on local solutions to economic,
    social and environmental sustainability. It is a world with continuously increasing global population, at a rate lower
    than A2, intermediate levels of economic development, and less rapid and more diverse technological change than in
    the B1 and A1 storylines. While the scenario is also oriented towards environmental protection and social equity, it focuses on local and regional levels.”

    The A2 comes across as more nationalistic. Both scenarios have continually increasing population growth, and some may argue that it is possible to obtain a B2 scenario without that so it’s not a necessary part of the package – I guess that’s a debatable point. It’s also debatable as to how possible it is to fall into the grey areas between various scenarios.

    Finally, it’s worth noting that:

    “The SRES scenarios do not include additional climate initiatives, which means that no scenarios are included that
    explicitly assume implementation of the United Nations Framework Convention on Climate Change or the emissions
    targets of the Kyoto Protocol.”

    Which one would assume that a Green Party member would be arguing for, and more. Thus you’d have to modify any scenario out put if you were to follow their line.

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