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Earth has warmed by roughly three-quarters of a degree Celsius since 1880. That this warming has coincided with a 36 percent increase in atmospheric carbon dioxide concentrations and massive global industrialization has raised fears that human activity is irrevocably destroying the planet. On November 2-3, AIER assembled experts in climate science, economics and public policy to address the causes, consequences and reactions to these changes and to generate rational discourse about how to address this problem.

With the exception of immigration, no issue ignites passion as does global warming. Passion is laudable in many areas of life: it builds better families; strengthens friendships; fuels entrepreneurship and innovation; and makes the world a more dynamic place to live. But zeal is not a substitute for reality. My enthusiasm for my alma-mater’s football team does not alter their annual inability to defeat our arch-rival! A sports fan’s blindness to reality rarely poses problems however. When passion clouds scientific and economic judgment, it has the potential to inflict serious damage on others. 

People who are not climate scientists are quite prepared to state what is going to happen to the earth over the next century. People who are not economists stand ready to rewrite economic policy. The rhetoric has ratcheted up and lines in the sand have been drawn. Either you are a “believer” or “non-believer”, an “alarmist” or a “skeptic.” The stark dichotomy is certainly due to the fact that there is indeed a non-zero chance of a warming planet producing Armageddon-like catastrophe. The same is true, however, of a meteor strike. Yet there is not a serious debate among meteor strike “believers” and “deniers” about whether it is possible or what we should do to protect ourselves from it.

A crucial distinction is that “anthropogenic” meteor strikes are not realistic while the same might not be said regarding climate damage. And it is far easier to imagine the potential damage due to global warming than from other catastrophic events. After all, we can point to strong hurricanes, melting ice, expanding mosquito ranges, etc. already, regardless of what the cause is. Capturing a crashing meteor in a documentary is not as easy.

The unfortunate consequence is that it is difficult to find a discussion of global climate change that is not colored in some way. What is an uninformed, yet interested, citizen to do? The answer is not trivial, given the fantastic financial and political sums at stake. At a conference in Great Barrington this past November, we aimed to supply some much needed common-sense, fact checking, and perspective for those who wish to learn more about what is one of the most important policy issues of this generation. Very little of the public discourse has thus far been waged over substance. Rather the discourse is being turned into a religious war on global warming. Our impression is that human-kind will not be well served by such a religious war.

What Do We Know About the Science of Climate Change?

Climate science is extremely complex for three reasons according to each of four panelists – Carl Wunsch (MIT), David Chapman (Utah), William Gray (Colorado State) and Richard Lindzen (MIT). First, it is an immature science. Instruments only began recording local temperatures and pressures in the mid-seventeenth century and global atmospheric measures were not available until after World War II. Oceanic data are younger yet.

Second, climate science is virtually the science of everything. As Richard Lindzen demonstrated, climate damage is not a simple consequence of carbon dioxide emissions and warming. The ever popular catastrophic consequences of global warming (ice sheets melting, sea levels rising fiercely, starving polar bears, severe droughts, etc.) require long chains of linkages which need to be measured accurately and tied together.   

For example, the physics and chemistry of the atmosphere and the oceans affects climate; the history of life on earth matters; cosmic rays from the sun matter; geomagnetism matters; and so on. Scientists may in fact have an excellent understanding of each particular system, but no one has a good knowledge of the myriad factors which connect them. Even when these linkages are possible, there are sufficiently many that the resulting catastrophe is extremely unlikely – especially given that each of these linkages is subject to a plethora of influences. To illustrate, predictions of CO2 emissions are based on models of population growth, economic growth, energy efficiency, energy consumption, technical change, land use, and more. Each of these ties into the climate models, and is itself subject to a variety of influences.

Third, modern climate science relies on large, complicated models which describe and predict the climate system. These models have proven to be both unreliable and unstable. Lindzen pointed out that even if we attribute all warming over the past century to manmade greenhouse gases, the observed warming is only about 1/6 to 1/3 of what climate models project. He also showed that in all models, maximum warming is expected in the tropical upper troposphere and predicted to be much 2.5 times more intense than ground level readings; but the data since 1970 suggest something altogether different. Temperatures in the tropical upper troposphere are only ¾ as large as ground warming has been. The problem is that there are far more model parameters to estimate than there are reliable or observable data points, making it impossible to rule out competing hypotheses. Climate models are therefore very similar to the macroeconomic econometric models which were popular a generation ago.

In the 1960s there was a “scientific consensus” based on these models which suggested that government wage and price controls were the solution to macroeconomic ailments. At the time, Milton Friedman’s bucking the consensus had him labeled a zealous heretic. By the 1990s this consensus had shifted and the models disappeared. Why? Models estimated through the 1960s did a terrible job at predicting the early 1970s. Models estimated through the mid-1970s poorly predicted the late 1970s and so on. Thus, even a broad climate consensus may prove fragile. Though no alternative models were proposed at the conference, it was urged that we take the model results seriously nonetheless, but we were cautioned to prepare for the possibility that the models may miss their target widely – and in either direction.

Professor Wunsch expressed concern that the thirst of policymakers and citizens to want to know what is going to happen and what to do about it give rise to dramatization and dogmatism that hurt the prospects for understanding the science. For example, William Gray showed that you can take the data on hurricanes and come out with any conclusion you want. He offered a comparison of the hurricane activity from 1900-1949 versus from 1957 to 2006. During the former period 39 major storms hit land while during the latter 22 major storms landed. Some might conclude that CO2 leads to fewer storms, as this was a period of rapidly increasing emissions. On the other hand, hurricane activity during the most recent 12 years has far outpaced that of the prior 12 years.

Despite this complexity, there is a vast area where the scientists acknowledged widespread understanding and agreement. The major areas of agreement include:

  • Earth has warmed by 0.5 to 0.75 degrees Celsius since 1880; but that this warming has not been constant across the globe nor has it been monotonically increasing in time.
  • At 382 parts per million (ppm), atmospheric CO2 concentrations are at the highest end of the 150,000 year historical record. That it has taken less than a century to increase from 280 ppm is evidence that human activity has led to the increase. Similar historical increases took thousands of years to be achieved.
  • CO2 is a greenhouse gas and should contribute to some warming, but it is not clear how much.
  • Sea levels have risen by approximately eight inches in a century and the oceans have become more acidic.
  • Hurricanes are not caused by global warming.

Are Humans Causing the Planet to Warm?

Though the above evidence is suggestive of humans causing recent warming, the scientists warned that this is an assertion which is not yet warranted by the existing evidence. Alas, establishing a causal relationship between global warming and human activity is difficult because it is near impossible to observe the relevant counterfactual. Sleeping with one’s shoes on is strongly related to waking up with a headache. But, does sleeping with shoes cause a headache?  

To establish humans as the cause of warming, the scientific method requires that we rewind history and repeat the prior 150 years with no change in human emitted CO2. If the newly observed temperature was cooler than today’s prevailing temperatures, it can be asserted that human activity was the cause of warming.

Absent this ability, scientists use statistical methods and models to best approximate this counterfactual state of the world. But climate science is particularly challenged because of the myriad factors which must be understood (controlled for) in order to assert anthropogenic causality. While taking into consideration alcohol consumption is enough to exonerate shoes in our headache mystery, implicating people in the climate mystery is not as easy, and might not even be possible for decades.

Potential sources of climate change include solar variability (which seems to have correlated with climate over time); aerosol variation (especially volcanoes); changes in cloud cover; greenhouse gases; changes in land use; natural variability from factors such as El Nino, the oceans’ thermohaline circulation, and more. Changes in any or all of these may be sufficient to account for the changes in global mean temperature since 1880.

Evidence abounds to suggest that CO2 is far from the most important contributor to warming. Previous interglacial periods were much warmer and with far lower concentrations of CO2 in the atmosphere, and it is not entirely clear that CO2 concentrations do not lag temperature increases. At the level of a few tenths of a degree, there need not be a cause for climate change. When water is boiling on a stove, for instance, its temperature fluctuates a little.

It is hard to ignore the image of Al Gore in An Inconvenient Truth on a hydraulic lift depicting a projected doubling of CO2 concentrations, particularly since humans are the cause of the increase. But to ignore other contributions to warming because of how dramatic the CO2 increase will be is akin to blaming my weight gain on the doubling of my average daily intake of roasted chestnuts, and ignoring the contributions from my severely restricted exercise regime. The difference as it applies to climate change is that the option of exercising more is not in the feasible set of solutions.

Scientific Options for Dealing with Change

If carbon dioxide is causing warming then absent direct interference with the climate, scientific solutions must focus on ways to keep carbon in the ground. Political mandates to replace fossil fuels with alternative (carbon free) energy sources might sound simple, but as Gordon Michaels of the Oak Ridge National Laboratory demonstrated the task of effectively mitigating CO2 is formidable.

Michaels addressed the promise and challenges of carbon capture and storage, hydrogen fuel, and nuclear power. Each option faces substantial scientific and political hurdles. Major technological advances are required to make alternative fuels economically competitive with existing carbon fuels. For example, though hydrogen fuel emits zero emissions, it loses 75 percent of its energy in the transmission from power-grid to end use. Even if this efficiency can be improved, huge capital investments are required to transport and deliver the fuel and existing fuel cells in small vehicles cost over $6,000 due to the need for expensive platinum inside the cell.

Politically virtually every technology is faced with a NIMBY problem. Everyone is in favor of alternative energy so long as their landscape is not blighted, or storage does not occur near their children. For example, although the science and technology appear to be adequate for safe injection and storage of CO2 in the ground, each potential storage site is in someone’s Congressional district.

Wind, biomass, solar and other “green” solutions can neither “scale up” to meet global energy demands nor is their environmental impact well understood. The best option for expansion of carbon-free technologies right now is nuclear energy. It is only 20-30 percent more costly than coal. It is carbon free aside from the uranium enrichment process. The supply of uranium-238 used in fast breeder reactors exceeds one billion years. And nuclear reactors can produce abundantly both electricity and hydrogen which will be the energy carriers of the future. Despite being currently limited to supplying baseload electric power (at most 40 percent of U.S. electricity generation), its special potential is as an abundant source of electricity for electrolysis to produce hydrogen while the cities sleep.

Getting from Here to There

Typical diagnoses of economic problems maintain that for some reason, the
“price is wrong.” In the case of climate change, the zero price of CO2 is too low. Because humans benefit from activities which generate CO2 without bearing any of the pecuniary costs CO2 emissions impose on others, too much CO2 is being pumped into the atmosphere. The standard utilitarian economic remedy calls for an increase in the price of CO2 from zero to a per-unit amount which reflects the total current and future stream of damages caused by each unit of emissions. When there is a positive price on CO2 emissions, individuals will have an incentive to economize in a multitude of ways which result in more CO2 remaining in the ground. The particular advantage of relying on the price system is that it avoids government dictating how individuals will economize. Alas government must still play a role in determining the proper carbon price.

Economists Robert Mendelsohn (Yale), Gilbert Metcalf (Tufts), and Peter Wilcoxen (Syracuse) considered the two major tools for doing this – a carbon tax and a carbon cap and permit trading system. Persuasive arguments were made in favor and against each proposal. Space limitations prohibit complete analyses here, but generally the success of each policy depends on three conditions. First, they must minimize clean-up and damage costs over the life of the policy. Second, they must address twin distributional concerns: these policies tend to be regressive; and the majority of forecast climate damage is expected to be concentrated among the world’s poorest people. Third, policies must strike the right balance between flexibility and stability because adjusting to a higher price on CO2 requires massive investments to be made by the private sector. In order for these investments to be made, there needs to be in place credible long-term incentives for making them.

The effects of either system would initially result in an increase in end-user fossil fuel prices in the range of 10 percent, with costs increasing over time. For example, gasoline prices would rise by roughly 30 cents per gallon, home heating bills by roughly $33 per month, and electricity and natural gas bills by 14 percent. Major criticisms of each proposal revolved around political and governance issues, with the tax proposal generally faring better on grounds that it is less prone to fraud, cheating, self-entrenchment of constituents and creates less price volatility.

Policy Speed bumps

Global climate change is not a localized issue. Any economic solution will require a substantial degree of international cooperation. Voluntary cooperation on the scale necessary to achieve meaningful emissions reductions is unthinkable, particularly when the incentives for developing countries to shirk are so high. Similarly, existing supra-national institutions are grossly inadequate to assume these responsibilities.

Trenchant criticisms leveled at the Intergovernmental Panel on Climate Change (IPCC) and the UN itself by economists David Henderson (University of Westminster, UK), Ross McKitrick (University of Guelph, Ontario) and journalist Claudia Rossett illustrate these institutional challenges. The IPCC, widely proclaimed to represent a consensus view on the causes and consequences of global warming, may not represent the objective, scientific consensus that is often portrayed. Henderson raised questions by demonstrating that the IPCC reporting process was flawed and lacked rigor, inclusiveness and impartiality – and rather reflected a pre-existing bias of the organizers. He illustrated as support the IPCC’s poor handling of economic issues, weak peer review process and initial refusals to disclose data for replication.

Ross McKitrick’s personal experience with the IPCC affirmed Henderson’s analysis. He showed several examples of where structural biases were built into the IPCC report – including the now infamous strickening of the Medieval Warm Period from the temperature records in the IPCC report. This ignorance resulted in the production of the now famed “hockey-stick” graph despite clear evidence that the IPCC analysis showing unprecedented contemporary warming relies tenuously on the temperature records in one species of pine tree in one location in North America.

Since government and UN policy seems insistent on relying on IPCC findings for guidance, two proposed remedies offered were tying carbon price mechanisms to actual observed temperature records and implementing a “team B” alternative to the IPCC which would be free from government and environmental group influence.

Claudia Rossett warned that even if the IPCC findings were unbiased and authoritative, relying on the UN or similar international organizations to manage a global emissions tax or trading program would be flirting with disaster. Her research and writing on the UN “Oil for Food” scandals demonstrate that it would be unwise to turn responsibility for managing trillions of dollars of global resources to an organization that cannot audit its own books.

A “better UN” would not succeed, for the problems are endemic to such international organizations. They are collectives in which everyone is responsible for outcomes, and hence no one is responsible. The UN in particular is outside the jurisdiction and any national legal system, so how are they to be held accountable for managing the climate change solutions? The risks to that institution for being wrong are zero, perhaps even negative. It is not hard to imagine more resources being directed its way in the wake of a policy failure. Finally, “easy money” is just as much a problem in international politics as it is in local government offices. Solutions to the global climate change problem recommend tremendous global reallocations of resources (this used to be called central planning) and it is naïve to believe that the UN will not use this opportunity to tap global big business to bring in jobs, patronage and otherwise expand the bureaucracy.

Given how much global warming is already “baked into the cake” it is going to require a substantial reduction in CO2 emissions to achieve any meaningful reduction in the path of global temperatures. This shines light on two elephants in the room. The first is that there are abundant known sources of fossil fuels still in the ground – 200-500 years of coal alone. Second is that the economic policy discussion has largely worked under the assumption that less CO2 needs to be emitted to affect change. If it turns out that there is only a weak link between CO2 forcing and climate warming, then dedicating trillions of dollars toward reducing emissions will prove to be foolish. Far fewer resources would then be available to adapt to any of the changes a warming climate might bring, or to do something more radical in response to impending catastrophe. Thus, as commenter Ken Green of the American Enterprise Institute noted, uncertainties at the periphery of the subject require that our policy choices are those that we will not regret if we are wrong.

Theological and Ethical Aspects of Climate Change

With so many people currently suffering around the world from malnutrition, disease and other effects of immiserating poverty, and with so many important issues on the table in the developed nations, readers might question why climate change is such a concern for the UN and member governments.

Robert Nelson (Environmental Policy, University of Maryland) proposed to answer this question with one of his own. Suppose today’s policymakers were offered two scenarios, under each the earth’s temperature path and expected damages are identical. One scenario is a result of natural causes, the other a result of human activity. Would the debate be any different? The answer requires an understanding of the religious forces at work in the world today.

Almost all people have an overarching lens through which they understand the world. Environmentalists maintain that anything that is “natural” is good while anything that is “unnatural” is bad. This faith certainly does not derive from a respect for Old Testament writings. In Genesis, God directed Adam and Eve to, “Be fertile and multiply; fill the earth and subdue it …” Expression of the environmental faith often overwhelms scientific conclusions through a different biblical message of fear. For example, despite the demonstrated safety of certain genetically modified foods, many people oppose the growth, sale and consumption of these “Frankenfoods.”

The major point being that in the domain of what David Henderson calls “global Salvationism,” all of the considerations for material progress and its sources are disregarded and denied. In the Salvationist picture of the world, poor countries are portrayed as victims whose progress chiefly depends on empowerment and deliverance from above, while environmental issues are treated almost exclusively with reference to problems, threats and potential or even imminent disasters. Insofar as such beliefs and assumptions form the basis for economic policies, there are grounds for concern.

Critically looking at the religious undertones of the climate change debate does not change the possibility that global warming has been caused by man, and that there will be some consequences of a warming planet which require prospective action.

Acting on this modern version of Pascal’s wager generates epistemological and ethical questions, outside the purview of climate science, which further complicate the policy discussion. Professor Ed Kane (Boston College) closed the conference by raising just a few of them. If CO2 does cause warming, do humans still have a right to burn it? Is doing so sinful? What duties does each generation have to its heirs? And do these duties justify sacrificing trillions of dollars to a generation which will undoubtedly be richer? Why is this particular pending disaster the right one to focus on? Can governments take any effective measures and if so, is massive intervention required?

The challenge of global warming is not, “either we believe in global warming and rescue the planet or we all die.” It is largely a choice between how much action is taken proactively and how much is relegated to respond to climate change in the forthcoming decades. There is still time to have a reasonable discussion and to make rational decisions. That is, if people wish to approach the issue this way.

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