Tag Archives: A Question of Balance

Climate Change: A Question of Caves and Mansions 2?

In my last post, I looked at the neoclassical economist’s view of a world undergoing climate change. The consensus within the profession is that global mean temperature rise will become a growing cost to humanity. Further, such a cost is not being borne by those causing it (a so called externality in the economics literature) and therefore justifies a carbon tax. Finally, and most controversially for some, the standard recommendation is for a slow and steady ramp in taxation from a very low starting point. This rests on the recognition that any investment to mitigate carbon emissions now will translate into lost economic output in the future. So the logic goes: it is often better to get rich and dirty first (before cleaning up), rather than staying clean and poor.

In sum, the economics profession calls for a calm, considered but, above all, slow response to climate change.  This is in stark contrast to the position of many climate scientists; for example, the sentiment expressed in the following statement by the climate scientist Lonnie Thompson:

Why then are climatologists speaking out about the dangers of global warming? The answer is that virtually all of us are now convinced that global warming poses a clear and present danger to civilization.

Since the scientific and the economics communities inhabit completely different academic silos, it is rare to find any intelligent discussion that analyses this dichotomy of opinion. Economists cite scholarly articles published in the leading economics journals, and scientists cite scholarly articles in the leading scientific journals. The one exception is perhaps the Intergovernmental Panel on Climate Change’s periodic assessment reviews, which has provided a communal market place of ideas for a variety of disciplines to meet. However, the last report was published in 2007 and was based on an information set available a few years even earlier. Therefore, many economists are not very well placed to tap into the rising alarm of climate scientists as new data comes in and reports get published.

If I were a climate scientist trying to install a sense of urgency among economists, how would plan my avenue of attack? Continue reading

Climate Change: A Question of Caves and Mansions 1?

A can’t count the number of moribund discussions I have had over the veracity of climate change. Having spent the best part of my career in the financial industry, it is impossible not to come across certain colleagues, clients and brokers who see global warming as an affront to free market economics and therefore something that could not possibly exist.

Such questioning of the science, however, doesn’t particularly bother me: a contrarian mindset is a prerequisite for a successful career managing money so the multitude of climate skeptics within the industry should not be a surprise. What does frustrate me, though, is that many of those who argue so vehemently that climate change is a product of statist scientists trying to secure government funding don’t feel the need to acquaint themselves with the basic tenets of what they are arguing against (and yes I have had the painful experience of reading through the standard skeptic offerings from Ian Plimer‘s ‘Heaven and Earth’, to Nigel Lawson’s ‘An Appeal to Reason‘, to Bjorn Lomborg’s ‘Cool It‘ and many more).

When engaging with many skeptics, it is like arguing with someone over the merits of a novel when my opponent has only read the reviews in a newspaper and not the original text. Continue reading