Environmentalist doomsayers are back again, trying to frighten Americans into radically altering the American economy, supposedly to save the earth.
This week’s Armaggedon proclamation came courtesy of the United Nations Intergovernmental Panel on Climate Change, which released a much-ballyhooed report suggesting that a 2 degree Celsius change in global temperature by 2040 would result in catastrophe. The New York Times quickly amped up the panic, reporting the possibility of “a world of worsening food shortages and wildfires, and a mass die-off of coral reefs as soon as 2040 — a period well within the lifetime of much of the global population.”
The report urges a 45 percent reduction in carbon emissions from 2010 levels by 2030 in order to prevent that imminent doom. According to the IPCC: “The report finds that limiting global warming to 1.5°C would require ‘rapid and far-reaching’ transitions in land, energy, industry, buildings, transport, and cities.” Some of those changes could include an attempt to direct 5-10% of global capital revenues toward investment in public works projects, plus a $27,000 tax on each ton of carbon by 2100 – equivalent to roughly $250 per gallon tax on gasoline.
But this recommendation had socialists like Eric Holthaus, of the University of Minnesota’s Institute on the Environment, cheering wildly for the downfall of the capitalist system:
There are just a few problems with the reporting on the IPCC report. First off, the actual headline should have been that the IPCC had revised downward its estimate of impending doom since the IPCC’s AR5 report in 2014: according to the report itself, scientists agree that the “remaining carbon budget for 1.5 degrees Celsius or 2 degrees Celsius would be larger than the estimates at the time of the AR5.”
Then there’s the question of how much damage will actually be done. While the report states with high confidence that more environmental damage will occur at 2 degrees Celsius than 1.5 degrees Celsius, the report is far less confident about the specific damage that will occur by 2040. And the predicted damage isn’t actually catastrophic. Species loss and coral reef bleaching are certainly bad things. But there’s no actual prediction of mass death or hellfire.
So, here's the real question: even if you believe that environmental consequences from climate change are worth worrying about, we have to determine when intervention is worse than non-intervention. After all, the IPCC is calling for a radical revision of the capitalist system – a system that has raised half the world’s population from abject poverty in the last three decades. One half of the world population is now middle class or richer. That’s thanks to capitalist economics.
One particular expert has made his life’s work answering exactly that question: William Nordhaus of Yale. The political Left celebrated Nordhaus this week as he won the Nobel Prize in Economics; they were particularly excited because Nordhaus’ award seemed like a slap in the face to the Trump administration.
But Nordhaus’ work suggests the IPCC alarmism is simply wrong. Nordhaus is the father of the so-called DICE model, one of the models used by the Obama administration in determining regulatory strategy on global warming. But Nordhaus himself now argues that the “optimal trajectory” for climate would end with a 3.5 degree Celsius increase in global temperature by 2100, not 1.5 degrees or even 2 degrees.
Nordhaus argues that “the international target for climate change with a limit of 2°C appears to be infeasible… A target of 2.5°C is technically feasible but would require extreme and virtually universal global policy measures in the near future.” Keeping to 2.5 degrees Celsius, Nordhaus says, could avert $91 trillion of damage, but would cost $134 trillion.
Why shouldn’t we be quite as worried as the Left would argue about global warming? Because people are good at adapting. The changes that we’re talking about don’t happen overnight – they happen over the course of decades. And that means that the impact is spread out of the course of decades, too, and against a backdrop of global growth. Here, for example, is a chart of the increasing cost of environmental disasters, from FiveThirtyEight.
But here’s the cost of global disasters as a percentage of global GDP:
Those costs are going down. In other words, as the economy grows, we can cope with disasters better. Furthermore, environmental disaster isn’t likely to stop or reverse growth – Mad Max isn’t coming anytime soon. As Oren Cass of Manhattan Institute points out regarding Nordhaus’ model, “By 2100, regardless of climate change, the world is more than six times wealthier than in 2015 under this model.”
It’s not wrong to be concerned about the environmental impact of emissions. But American emissions have been falling steadily since 2000 – at least 7.5 percent according to the EPA. And in 2017, the United States had the largest reductions in carbon dioxide emissions of any country on the planet.