Climate Change

[drplokta]

We keep seeing scary-looking estimates of the cost of climate change -- most recently an estimate here that it could be costing the UK £42 billion per year by 2080. What all these estimates have in common is that, while they look scary, they are in fact extremely small numbers, and indicate that we should do nothing about climate change.

Let's take that £42 billion per year by 2080 as an example. The UK's GDP is currently a little over £1 trillion per year. But if we assume 2% real growth in the economy per year over the next 74 years, then in 2080 it will be over 4.3 billion, and that £42 billion per year will be less than 1% of the economy, or equivalent to delaying economic growth by less than six months. Put another way, the effect of climate change will be to reduce average growth over the period from 2.00% to 1.99%, so it doesn't seem worth spending more than .02% of current GDP, or £200 million per year, to do anything about it.

Comments

[drplokta]

What values do you place on the North Atlantic Drift, etc., and how do you compare them against non-ecological resource sinks such as public health, art, culture, etc.? At least the use of a financial metric gives you a framework within which you can have the discussion (one could, for example, attempt to quantify additional costs of heating, agriculture, and so on consequent upon the failure of the North Atlantic Drift, and assign a probability to its failure). If you have an alternative framework that makes all possible uses of resources commensurable, I'd like to hear about, but without such a framework you can't make any decisions at all.

[the-gardener.livejournal.com]

As I've said throughout this exchange, I don't think the North Atlantic Drift, etc. are amenable to monetary valorisation, and in my view to attempt to quantify the additional costs of heating people's homes as a consequence of its failure is simply to fiddle about in the econometric undergrowth and leave the real issue unaddressed -- i.e., the effects of climate change on the Earth's biosphere. For that reason, I think environmentalists such as Matt Prescott, in the BBC article you referenced in your original post are wasting their time as well -- their intention is clearly to try to demonstrate to business, in a language that business will most readily understand, what effect climate change will have on their balance sheets and thus their stock market valuation, but who, really, will care about any of that thirty, fifty or a hundred years from now?

[drplokta]

Let me repeat the question: if you don't accept the validity of a monetary analysis, what metric do you propose to use to do a quantitative comparison of the benefits arising from resources allocated to ecological projects and to non-ecological projects, so that you can determine the optimum allocation of resources overall? If you have no such metric, then you can't call for any resources to be allocated to anything, as you have no way of justifying that allocation.

[the-gardener.livejournal.com]

I can only repeat my basic point: the effects of climate change can't be quantified in this fashion, because the net result of climate change will be to make the biosphere less suitable for the continuation of contemporary human civilisation.

How less suitable is unquantifiable, because we can't predict with certainty the exact state of the new climatic regime which will predominate (how many degrees warmer, how much windier, and so forth). To try to calculate what resources should be allocated to dealing with climate change, in the fashion you suggest, would require the creation of an almost infinite series of tables in which one attempted to assess the relative value of dealing with a one degree rise in temperature, a two degree rise, etc., cross-matched for each state with various states of cessation of global ocean currents, each in turn cross-matched with potential new hurricane indices, etc cetera, et cetera....and then attempted to match each of those against a whole series of other issues to which resources could be allocated. Assuming this is even possible, it would be pointless in the long run because by the time the numbers had been crunched through the climate would have changed and the results of the calculations would be entirely academic. (See also the comment from johncoxon way below.)

The point about climate change is that it will change everything. In my view, to discuss relative resource allocations in the face of that uncomfortable fact is a serious waste of time and effort.

[purplecthulhu.livejournal.com]

If the UK (and Ireland) climate changes to that of Labrador, one could attempt to assess this by comparing the value of land prices for all real estate in the UK (a lot!) with that of Labrador or Greenland (hardly anything at all). As you can see I don't have the detailed figures :-) but this is a much larger monetary effect than just 42 billion a year.