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Thinking About Climate Change


Very interesting post by Todd Zywicki, law professor at George Mason University and former high-level official at the Federal Trade Commission -- I like how he examines the embedded assumptions in the "we must DO something" line of thinking. A very economically based analysis -- which is a good thing.


[Todd Zywicki, June 18, 2005 at 10:14am] 6 Trackbacks / Possibly More Trackbacks

Asking the Wrong Question on Global Climate Change:

Ellen Goodman writes today:

The climate is equally apparent in the struggle over what the Bush administration calls "climate change" -- and everyone else calls global warming. The only way to justify doing nothing about global warming now is to deliberately muddle the science. It's not an accident that Philip Cooney, the White House official caught editing reports on greenhouse gases, left for Exxon Mobil, which has indeed funded doubts.

Is it true that the only way to "justify doing nothing about global warming now is to deliberatly muddle the science"? I think the answer is quite plainly "no." Even if it is true that global warming is occurring, this is only the first of many questions regarding whether we can justify doing nothing about global warming.

Embedded in Goodman's assertion seems to be the implicit argument that if the scientific evidence shows that the global climate is warming, and if it is the result of human-induced factors, it follows that we must do something to try to reverse (slow?) global warming. Leave aside the scientific debate on the subject, and assume for a moment that the scientific predicate is correct. (the world is warming because of human influences). Even if this were true, the implicit syllogism still seems incorrect to me on several levels.

First, assume that the Earth were warming for wholly natural causes, and that the effect was as dire as the worst-case predictions under the current scenario--the apocalyptic stories we read of famine, pestilence, and natural disaster. Would the fact that this warming were "natural" make any difference at all with respect to whether we should do anything? The answer seems obviously no. We never stand by and simply permit wholesale disaster simply because the cause of the disaster is natural. Floods, hurricanes, cancer, smallpox, polio, starvation, wild animals, influenza, AIDS, etc.--all of these things are natural, yet that fact does not stand in our way of trying to alter nature to prevent their harm to humans. So, if global climate change is occurring, the quetion of whether we should do something seems largely irrelevant whether it is caused by humans or naturally-occurring.

So the real question to ask here is whether on net, the costs of doing something about global climate change outweigh the benefits of doing it. This is the same question we ask (or should ask) about every other intervention into nature--should we kill the parasites in water so that we can drink it, should we drain a mosquito-infested swamp to eliminate the risk of malaria, should we provide a vaccine to kill naturally-occurring smallpox. To imply that if the science shows we are changing the climate we must do something about it is as wrongheaded as it would be to say that if we are not contributing to global warming we should not do anything about it.

On the question of whether global warming would be a net benefit or detriment to the planet, the evidence I have seen to date suggests that it is inconclusive. There will be impacts on crop yields, growing locations, forests, energy consumption, etc., that cut in many different directions. The question of whether the warming will occur equally throughout the world, or whether it will occur more strongly in the coldest parts of the world appears to also be unsettled, and has powerful normative implications for policy. To get bogged down in the science, and especially in causal questions, seems to me to be largely beside the point.

Of course, this also shows why the "precautionary principle" is a non-starter as an intellectual construct. As I understand it, if the Earth was warming for natural causes and would nonetheless have the same effect as anthropocentric global warming, then the precautionary principle would tell us that we should not intervene to do anything about it, regardless of whether it might destroy us all. How can that possibly be an intellectually coherent position?

Moreover, note that like global climate change, economic growth is path-dependent, so that if we make ourselves poorer today, we will be forever poorer as a result, and as a result will have less of the good things in life that we acquire through wealth (health, education, medicine, safety, terrorism control). So some number of people will die either way.

I think we need to remind ourselves that the questions of whether the Earth is warming, and if so, why, are just the first question we need to ask ourselves. The real question is, if so, what should we do about it.

From what I can tell from reading the literature by Rob Mendelsohn and others, it is quite possible that based on the best predictions of global climate change over the next century at least, the net benefits of global warming may very well turn out to exceed the costs. (Beyond that time frame the predictions are largely irrelevant--recall that a century ago there were no cars, for instance, which should give us pause about the reliability of long-term models). But even if the benefits exceed the costs, there will be substantial distributional effects, primarily favoring wealthier countries that also tend to reside in more temperate climates (in part, the two are related, as the net beneficiaries of global warming also tend to have higher levels of economic productivity).

If this is true, I want to suggest one way we can think about this is the "Box 4" that is familiar to Property professors in teaching the Coase Theorem (Spur Industries v. Del Webb). This would be to recognize the right of the net "losers" of global warming as having suffered a global nuisance from the net "winners," but to enforce it with a liability rule that entitles them to compensation, rather than a property rule that would entitle them to an injunction. The transaction costs seem too high to give them a property rule. Forcing the winners to pay compensation would also ensure that the net gains from global warming to the winners do in fact outweigh the net losses to the losers.



I am in agreement with dissent to the presupposition that "we should DO something" (or that we even COULD do something, or that us doing something would help and not hurt....), but his proposal of a liability rule for the global warming "winners" seems half-baked. Maybe you can enlighten me, but how would it be possible to legislate a natural global phenomenon on a more "civil" level? Wouldn't this be a logistics nightmare?



This is definitely only a theoretical economic-model proposal for now -- I think it would be a logistical nightmare. And a political one, as certain poor, developing countries that are contributing a lot to any man-made effect that may exist would be asked to make payments to richer countries that are hurt by the same.

But the main reason why I do like the construct is that it puts in in a cost-benefit analysis, which IMHO is how the issue should be analyzed.


Do any of you guys even know what causes global warming, or what the theory about it is? No? It is the increase in carbon dioxide. You know, the stuff that is coming out of your lungs right now. Yes my friends, the same stuff that all green things (trees, plants, etc) take in and need to live. Soooo, the more Co2 the more green things grow.

let's look at what produces Co2; humans, animals, cars, fires, volcanoes, (your butt - oops, that methane - sorry), etc.. So who has scientific proof that all the increase in Co2 is from cars? No one! For all anyone knows it could be related to the billions of people in China.

Also, who has the scientific proof that "global warming" even exists or if it's just a climate cycle like the seasons? Do you remember the Keoto (spelling?) summit years ago where the USA and other countries were all asked to commit to reducing Co2 in their country? There were a boatload of scientists saying that global warming was a fact. Then, there was another boatload of scientists on the other side saying it doesn't exists and that it's a normal cycle.

So I for one think we should fix what is wrong, but leave alone things we don't have all the facts on or we may screw things up.


Sure, assuming it is all a natural phenomenon might change the way you want to play the game. However, there is no basis for this assumption either.

How many ways do we have to hear that without absolute proof that a thing is not proven and therefor we don't have to do anything...

Gayness has not been "proven" predetermined at birth.

Global warming has not been "proven" to be a completely unnatural issue.

On the other hand, amazingly, when you are arguing against something, proof is no longer required. What a crock of shit this is.


The Kyoto treaty was an absolute joke. When you exclude populations as big as China and India from having to limit CO2 emissions you are just giving them huge economic benefits without addressing the issue.


America does waste too much energy. I believe the global market forces will force change upon us. Using a 6000 pound truck as a single passanger commuter vehicle is silly, yet I see people commuting in Hummers every day.

When the price of gas gets high enough people will change.


Zap, you do realize that there is an argument out there that these less developed countries should be given a while to catch up, to develop, before being held to the same standards?

While this may or may not be something you are likely to feel is fair, it isn't a joke per se. It means that some countries would start out, then other countries would later come aboard.

Now, I'd be much more likely to support withdrawing from the Kyoto accord on scientific reasons than because some other countries were going to get an economic advantage. There are ways to combat economic advantages.

Obviously, if you don't believe in the concept of mankind induced global warming I can see that there would be no apparent reason to undergo even the slightest hardship, economic or otherwise, to combat this issue.


You misread my post. I never stated it was all natural or not. My point is that no one really knows, so we need to proceed cautiously. How would you like it if a doctor wanted to do surgery on you for something he didn't really have any science to support; just because it seemed to be reasonable and popular? I personaly would say hell no!

So just like you may not want to play roulette with your own body, we should not do it with the earth either.

May times things that have a lot of media support and are very PC turn out to be total crap. So just because the idea that there is actually global warming is popular doesn't mean it is true.

Also, letting the under devloped countries out of Kyoto is bogus! So we wait until they produce as much polution as us and then say, "ok, now you need to sign." But now they are a bigger power and don't need our help. So they say hell no and tell us where to stick it. That's bogus dude! No, we require them to comply now and give them the technology if needed to do it. We have leverage now with developing countires that we won't have once they have more resources.


Lorisco, I'm not sure if I was responding to your post or not, but we are already playing roulette right now. Perhaps we should simply stop playing roulette?

Letting nature take it's course would not be playing roulette. I find it disconcerting to assume that NOT generating an incredible quantity of pollution is suddenly deemed environmental roulette.



Same with recycling. Same with all this environmental stuff. Hit the pocket book, and then people will care.

I work in the oil business, and I plan on having a job for quite some time. As long as idiots keep buying Hummers, I'm golden. And even with the H3 reaching a reported whopping 20 mpg, I'm not too worried.

FYI - "Because the H2 is built to the over-8500-lb GVW class, its fuel economy is neither published by the EPA nor counted toward Corporate Average Fuel Economy. So engineers could aim at making the H2 bulletproof from a reliability standpoint without risking it being labeled as a gas guzzler."

Don't take me the wrong way. I support the idea of Americans driving what they want, but let's be reasonable. I just drove 115 miles yesterday morning to LAX and then back (230 miles total). It took about forever and a day to do that. That translates to over 5 hours of driving, and I was hauling @ss when I could. Most of those cars (~80%) have one person in them. Many get poor gas mileage. We are a product of our own creation, and our creation is f*cked.

As far as the Kyoto thing, it's a mess. Damned if we (the US) do, damned if we don't. If one truly wanted to make an impact on improving the environment, leave the picketing signs at home, and cancel the trip to Detroit. Go to Mexico, China, Bangladesh, or some other miserable hell hole and make a difference where it's actually needed.

Don't worry about our backyard. Firstly, it's not half as bad as you've been told. Secondly, we'll price ourselves out of the gas guzzling business as the world oil demand surpasses capacity. Not if, but when.

To lighten up a little: "I'm against picketing, but I don't know how to show it." - Mitch Hedberg



Agree. The current global warming may be a natural phenomena- certainly temperature has changed through the ages- or it may be of our doing. And certainly, 1) the pollution from cars and industry 2) massive deforestation are not natural processes. There is no downside to reducing our levels of pollution, except an economic one. Personally I am prepared to reduce my standard of living to ensure the continuing habitability of this planet. It is interesting to note that virtually all proponents of the theory that global warming is not of our doing or worth acting on in any way have ties to big business and conservative political outlooks.


You're defining level playing field as everyone adhering to standard X from a given time.

They're defining level playing field as everyone adhering to standard X once they reach a certain level of industrialization.

India and China would have to follow the protocol once they were industrialized.

You're not just handing someone a huge benefit. You're allowing them the exact same luxury you've enjoyed for 100+ years.

And I may be wrong here, but it strikes me that the initial advange was gained via such policies as military-enforced colonialism, slavery, etc. So how wrong is it to let others have a little breathing room while they try to dig themselves out of the worst possible conditions?


An important issue here is rate of climate change.

Rate of change in the last ice age was about 1 degree per 1000 years. Species extenction rates were 1-2 species per year.

Currently it appears we may be changing several degrees per century, and are losing up to 5 species per HOUR. (That's right, 5 species go extinct each and every hour of each and every day and that's mainly thanks to us.)

You should always err on the side of caution.

The Intergovernmental Panel of Climate Change (IPCC) was unequivocal in its conclusion about the scientific basis for global warming. These guys buried the Marshall Report for good years ago.

They documented the increase in atmospheric content of human-produced greenhouse gases since the Industrial Revolution, concluding with CERTAINTY that this will "enhance the greenhouse effect resulting on average in an addition warming of the Earth's surface." Carbon dixoide from burning fossil fuels has been responsible for over half the enhanced greenhouse effect. The IPCC suggests that CO2, nitrous oxide, and CFCs have to be cut by over 60% to STABILIZE their concentrations at today's levels.

Sure the effects are unknown, but every important prediction is undesirable:

  1. Greater evaporations from the ocean surfaces may lead to greater cloud cover, blocking sunlight and leading to cooling.

  2. Rising tempreatures may lead to greater turbulence in the air as diferent parts of the planet heat up at different rates, with conection currents sweeping upward an creagincoluns of clouds rather that flat clouds. This would lead to more clear sky, heating up the world even faster.

  3. Everything from an ice age to catastrophic heating can be predicted by tweaking parameters in complex computer models.

No matter which way it goes, any change will have massive consequences.

The scientists who don't believe in global warming are a lunatic fringe, like the HIT Jedi's in bodybuildng.

And I'm not just saying this to bash Americans, Canada actually has the worst emissions record in the world.



On one hand, I do agree that, indeed, we should make a cost-benefit analysis -- if even an educated guess is even possible at this point.

I didn't see a cost-benefit analysis for invading Iraq, though, so I wonder where this guy was when that bill was passed.

Also, I don't want to sound disrespectful, but I (as an Economy Professor) can tell you, this guy you're quoting clearly knows very little, if nothing, about Economy. His comment that "making was poorer now will make us poorer forever" is one of the many clear signs that he knows very little, if anything, about the most basic economic principles.

You don't see me making comments about law, do you? I leave that to the experts, like you -- as this guy should leave the comments on a cost-benefit analysis to the people that know what they're talking about.

And the people who know what they're talking about will tell you something very simple: at this point we have no precise idea what the long-term costs would be; we can't even make a decent risk assessment, because, since the climate is a chaotic system, we have no idea what will actually happen.

Now, the kicker is, in these situations, macro-economists will tell you something very simple: assume the worst, and manage your risk by a) reducing the worst and/or b) reducing the consequences of the worst (i.e., mitigating the consequences of the worst). That reduces the size of risk range you have, and statistically, the risk itself. It's the only way.


Actually, my wife and her peers from across the globe have been working on this exact same issue for the Dutch Government (they have a dramatic worst-case scenario, which is essentially total annihilation, since most of the country is under sea level ? similar scenarios are planned for other coastal European countries, like Iceland, Denmark, Sweden, etc.). Their plans attack both a) and b); a) is being attacked by dramatic reductions in emissions, with a widespread deployment of wind turbines -- NL does not have space for nuclear power plants, but has plenty of wind, and turbines over there can be put right in the middle of fields -- and a large-scale plan to implement fuel-cell cars, sponsored by none other than Shell (who's going to install the fuel-cell replenishing equipment in all of their stations there, and supply the fuel for cheap); b) is being attacked by 1. A gigantic reconstruction project of the dams and dunes, to increase their height by a lofty enough margin to make up for the increase in seal level and 2. An emergency plan that, if things go really bad, basically diverts all incoming water to the fields first, away from the cities. Yes, that means that millions of dollars would be lost in crops but hey, it beats having Amsterdam, Rotterdam or Utrecht under water.

Note that, again, this is a worst case scenario, but that's how people who know what they're talking about manage risk in a chaotic system.

Now, I'm not saying that the worst case scenario for the US is remotely similar ("The Day After Tomorrow" was hardly realistic), but think about two things: one, how come nobody has even thought what would be the worst case scenario for the US and is preparing for it and two, do Americans realize that even if global warming does not affect us directly, if we are indeed contributing to it (as one of the largest producers of greenhouse gases) and, by doing that, contributing to the total annihilation of countries like Holland, we are basically letting others suffer for our carelessness?

Are we THAT selfish?

I mean, spending X billions of dollars to take democracy to Iraq is OK, but spending a fraction of that amount to help save Holland, Iceland, Sweden, Denmark, and many of our other allies is not?

Sounds nonsensical to me.

Anyway, if we are indeed selfish, I don't think there's any point having this discussion -- the worst case scenario becomes exponentially more serious with time, and even the Dutch total-annihilation scenario is "scheduled" for after 2050. I don't plan on being around by then, so why should I care, right?


I hate to say it, but history shows that we probably are. The one thing we've got going is that such selfishness usually doesn't like to be seen in public. We're as vain as we are selfish.

Great posts from you and JohnK, it's always refreshing to read some facts amid all the outgassing found here. I wanted to stick in an oar, but didn't have the citations.

Debating either the existence or the cause or the consequences of the greenhouse gas problem is real head in the sand stuff at this point. The early returns are not good.



That was a very interesting post, and your wife's program sounds very interesting indeed - well, aside from the dig on Iraq spending. Why not point out how much we are going to spend on the prescription drug benefit, which is equally related as a comparison?

However, doesn't your main idea go to the whole point of the initial post, even if you aren't pleased with some of its details?

How much does is it going to cost Netherlands to deal with its worst-case scenario? That's a quantifiable number. How much might countries like the U.S. benefit from a climate a few degrees warmer -- in other words, under the "worst case scenario" from the perspective of those other countries? Tough to predict, but I'm sure we could make a guesstimate. We can also make a guesstimate of how much it would cost to enact a large-scale emission ban, assuming for the moment that industrial CO2 emissions are in fact causing the climate change.

Thus I think we could do some cost-benefit economic analyses of various scenarios here, and work out some international agreements -- I agree with the poster above who observed that having a world-wides system would be basically impossible. I think it would be easier for bi-lateral or multi-lateral agreements between or among countries, especially when, as you point out, some of those countries already have good relationships. And remember, this is aside from arguing over whether emissions are actually the cause - this would just be "beneficiary" countries agreeing to help compensate countries bearing the brunt of the costs, if it turns out such a system would be a net improvement over absorbing the costs of a large-scale emissions curb (and especially if that emissions curb wasn't effective in actually reducing or stopping the climate change, which would almost certainly be the case if, as under the Kyoto model, countries like India, China and Brazil were exempted).


Yes, and we are definitely even more selfish for not donating all the money spent on sugar subsidies here to starving children in Africa... Or any other comparison you want to pull out between anything we spend money on versus something we aren't spending money on, which would be of precisely equal value in terms of discussing the issue at hand.


We cannot go back in time and level the playing field. What is done is done.

If CO2 emissions are a big problem ALL countries should be included in trying to reduce emissions, current standard of living be damned. Are the Chinese and Indian economies more important than the Low Countries of Europe that may be flooded out if this is the real deal?

If all CO2 emissions cease today how long will it take to stop global warming?

If you believe that India and China will cut emissions once they have caught up you are probably being naive.


How many selfish people eat an excess of food to add muscle to their bodies when that food could be used to feed the starving?