Here's a follow-up to yesterday's post The Death Of "Climate Exceptionalism". Although only a few hundreds of people read it, that post's message was surely a major bummer for anybody who cares about the long-term health of the Earth's biosphere.
I want to call your attention to this part of the post. (Quoted text is shaded.)
Indeed, the IPCC finds that climate change poses no substantial economic risk to our ever-growing global economy.
And the report is, on the face of it, more optimistic than the famous review of the economics of climate change by Britain’s Nicholas Stern in 2006.
Stern put the likely cost to the global economy of warming this century at 5-20 percent of GDP. The new IPCC draft says that a global average temperature increase of 2.5 degrees from pre-industrial levels may lead to a global loss of income of between 0.2 and 2 percent.
In so far as global GDP is expected to be 5-10 times larger than it is now by the year 2100, a global loss of income of between 0.2 and 2% is nothing at all. And that's if we reach an equilibrium surface temperature 2.5° centigrade higher than the 19th century baseline.
You might be asking how global GDP can be growing and growing while a warming Earth spawns ever more frequent and destructive extreme weather events. Here's the beginning of an answer.
First, economists view destruction or alteration of natural ecosystems as external costs (i.e., as externalities), meaning that they are simply not counted in the measurements (like GDP) of the size of human economies (and see below). This text is taken from IPCC report downplays economic impacts of climate change, reviewer says.
Economist Richard Tol of the University of Sussex is an IPCC co-ordinating lead author for Chapter 10, which discusses economic impacts of climate change.
In a paper published last year, Professor Tol stated that "the impact of a century of climate change is roughly equivalent to a year's growth in the global economy,"
and that "carbon dioxide emissions are probably a negative externality".
There is a dispute about Tol's economic accounting and Tol himself wants to have his name removed from the report. But I'm going to skip that political nonsense today. Let's look at the Big Picture instead.
First, even if human-caused CO2 emissions are ("probably") a negative externality, they remain an externality. Therefore, the effects of those emissions on the natural world do not factor into human economic accounting.
But what sorts of things might indeed factor into that accounting?
Well, when 9.08 inches of rain fell on Boulder County, Colorado in a single day, which happened last year, or when "superstorm" Sandy pounds and floods the New Jersey/New York coastline, which occurred in late 2012, then you would expect there to be a lot of damage. And there was.
And you might think that damage would be a blow to human economic accounting as measured by GDP. But you would be wrong because of two considerations we don't normally think about.
1. First, and this is the beauty part, no single extreme event can be attributed directly to climate change.
Sure, it makes sense that a wamer Earth will create more destructive heat waves and fuel droughts. Sure, it makes sense that more moisture in the atmosphere will lead to stronger (though not more frequent) hurricanes and severe flooding events. Sure ... blah, blah, blah ... but sorry! —your undoubtedly correct intuitions about all this do not count. When you enter the world of attributing extreme weather events to climate change, you enter a murky statistical world where everything becomes fuzzy and you start worrying about signal-to-noise ratios. And to clear that up, you need data, and lots of it over a long period of time.
But by the time you have enough long run data to see the signal in the noise, you are, as John Maynard Keynes once said, dead.
And you know that if there is the least bit of uncertainty, no extreme weather event will be attributed to climate change.
2. Now, suppose you make it through insurmountable obstacle #1 and you can directly attribute some extreme weather event to climate change.
Well, in that case the damage caused by that event doesn't matter because GDP measures national or global income. GDP (GNP, GDI, whatever) does not measure wealth, and extreme weather events destroy accumulated wealth. Sure, extreme weather events may impair regional incomes temporarily, but when when you rebuild after such events, income soars and GDP shows a net increase after the damage has been repaired, perhaps a large net increase.
Therefore, when extreme weather events cause large losses of wealth, as in Boulder, Colorado or northern New Jersey, GDP grows and grows!
Is this absurd? Sure it is! But that's how humans measure their own economic progress.
And now you know why economist Richard Tol can say the impact of a century of climate change is roughly equivalent to a year's growth in the global economy (by the year 2100).
And now you know why the IPCC will say a global average temperature increase of 2.5 degrees from pre-industrial levels may lead to a global loss of income of between 0.2 and 2 percent (by the year 2100).
So, when you talk about climate change denial, you need to understand just how deep that denial goes.
All of which puts me in the mood to listen to this beautiful music.