Monday, January 18, 2010

On Lomborg

A reader asked my view of Bjorn Lomberg. Lomberg argues vigorously for the view that the cost of mitigating climate change would be better spent on other programs for the benefit of the poor. All other things being equal, eradicating malaria will produce more good than avoiding climate change as it were – at least when it comes to spending today’s dollars. The argument assumes a number of things: 1. That we have fixed resources so there is a choice. 2. That if the money were not to go to climate mitigation it would go for the benefit of the poor. 3. That even if putting off the mitigation of climate change increases the cost of mitigation and adaption in terms of today’s dollars, the lower cost of future dollars (and technology) will more than offset that. My reaction to this line of argument is fourfold: 1. I don’t think our resources are fixed and I think it is na├»ve politically to think that money is fungible in any case. 2. Our inaction now effect not just the costs of future action but also the probability of some climate effects that once they occur cannot be undone. These include extinctions but more significantly ice melts. 3. If we proceed on a business as usual way, we will exhaust a 450ppm CO2 budget by 2050. That would mean proceeding with zero net carbon emissions from then on which is totally implausible. 4. Like most projections in climate, Lomberg pays too little attention to the effects of climate change on GDP growth itself as opposed to the effect of climate mitigation. My skepticism is different from Lomberg’s in the following way: in projections of the cost of mitigation, economic growth is set as an externality derived from business as usual models. The projection then simply assume the availability of “green” energy whatever the economic growth is set at in the models. The cost comparison is then between the cost of economic growth by green as opposed to fossil fuel. This sidesteps the question of the availability of such green energy at the level and on a timetable consistent with the projected rate of economic growth. My colleagues and I are beginning to look at this most closely in a case study of China’s economic and energy needs between now and 2030.

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