The reason these global agreements go nowhere is because the rhetoric behind what it takes to stop global warming does not match the reality.
The hard fact is that CO2 is not a pollutant like SO2 or other chemicals that make up small, scrubbable percentages of industry output. CO2 is what you get when you convert fossil fuels into energy. There are only two ways to limit CO2 - sequestration, which we don’t know how to do economically, and cutting the amount of energy generated by fossil fuels.
It’s not about a carbon tax, or cap and trade, or carbon credits… Those are merely the proposed mechanisms for getting to the end game. The ‘end game’ is to cut the world’s use of fossil fuels in half or even more from today’s levels.
We have no energy sources other than nuclear that can come close to filling this gap. Taking nuclear off the table for a moment, the only way to achieve the goal is to cut the world’s fossil energy use by half.
Recycling won’t get you there. Neither will driving a Prius or making other relatively benign and easy lifestyle changes. Slowing ‘consumerism’ won’t get you there, either. These are all changes on the margins. Cutting world fossil energy use by 50% would be a devastating blow to world GDP. It could cost as much as 5% of GDP to keep atmospheric C02 below 500ppm. 5% of GDP is higher than the world growth rate in GDP at the best of times. This means we’re looking at decades of economic stagnation.
No country is going to sign up for that. They’ll issue platitudes and sign ‘letters of intent to study the issue’ and do all kinds of other things to stall and delay and make it look like they’re doing something. They may even pass cap and trade or carbon taxes - but the money will wind up in a slush fund that politicians use for their own ends, and will not go towards mitigation. You just watch.
The fact is, the science and economics of climate change are not in a state that allows for reasonable decision-making. For example, the 2007 IPCC 4th assessment report estimates that stabilizing CO2 between 535-590 ppm will cost anywhere from slightly negative (i.e. will improve the economy) to about 4% of GDP by 2050. That’s a useless range, but it’s the best we can do. How do you make a decision when the potential costs of your decision are so unknown?
There are also major ethical debates that we have not even had yet. The logic behind the ethics of climate change action is that we owe it to future generations to keep the world’s temperature free of man’s interaction. The argument is that in 2100, people yet unborn will be forced to relocate and undergo trillions of dollars of damage. It’s our responsibility to spend the money now to save them from the damage we caused. But in fact, we rarely act this way. The U.S. is currently borrowing 1.8 trillion dollars from future generations to make this generation more comfortable. Shouldn’t the same logic prevent that kind of deficit spending? Why is it okay to dump an 18 trillion dollar debt load on your grandchildren, but not okay to dump 18 trillion dollars worth of climate damage on them?
We can’t even agree on simple things like the discount rate that should be applied to calculate the net present value of future damage. What is it worth in today’s dollars to avoid a trillion dollars in damage in 2100? Economists have used a 4% per year discount rate for social issues in the past. If you apply that to the cost of global warming damage, you find that to avoid one trillion in damages a hundred years from now, we should only spend about 20 billion dollars. If you use 8%, which is closer to the long-term cost of money and would be a number more likely used for long-term financial investments, you find that you should only spend about 500 million. If you use a discount rate of zero, as some activists demand, then you should spend a trillion dollars today.
Add up the uncertainties here:
The IPCC’s estimate for warming ranges from 1.8 to 6.4 degrees. That’s a range from, “Do nothing - it’s beneficial”, to “disaster is ensuing”. If we knew the exact number, then we could assign a CO2 target to avoid it.
Assuming we knew how much warming there will be with precision, then we have to estimate what the damage will be. Again, the estimates are all over the map, from “moderate warming will be a net benefit to the planet”, to “warming will be a massive disaster”. But really, these estimates depend on predicting the direction of world development for the next 100 years - something that we’re hopelessly inadequate at doing. We have no idea if there will be nuclear wars, or if we’ll run out of oil, or if we’ll wind up in a socialist world where growth stops, or whether Asia will rise up and dominate the world, or whatever. It’s all guesswork. If you asked economists what the future would look like in 1990, they would have emphasized the dominance of Japan and the U.S. The world looks completely different just two decades later.
But if we knew how much warming there would be, and what the potential cost would be, then we’d want to estimate the cost of fixing the problem. But the estimates for the cost of the CO2 target also range from, “We’ll make money doing it” to “we’ll wreck the global economy.” We just don’t know what it will cost.
But assuming we knew exactly how much warming there would be, and we knew how much damage it would cause, and we knew what it would cost to fix it, then we’d still have to come to an agreement on a reasonable discount rate. And again, that number is so wide that the answer would range from “do nothing - it’s too expensive to spend money to day to fix a problem 100 years down the road” to, “we should spend everything we have and halt world progress.”
This is the environment we’re in. No one can agree on a damned thing. We know there’s a potential problem. We know it would be nice to do something about it, within reason. We don’t know if we can, we don’t know how much it will cost, we don’t know what the economic impact of our changes will be. Other than those thin tendrils of general trends we can see coming, we really have no idea what the right actions are.
We need to do a lot more work. We need not only better science, but better economic study. We need to narrow the range of errors. We need to have a world-wide debate on just what our responsibilities to future generations are, and how much force should be applied to the citizens of the world to meet them.
But even after all that, you have the reality that countries act in their own self-interest, and that this is the mother of all free-rider problems. Global warming’s impact is not evenly felt. Russia, Canada, and other northern countries will likely benefit from global warming. Canada’s population is clustered in a 200 mile high band along the U.S. border, with much of the country unusable because of the cold. Canada is a major fossil energy producer. Canada probably has more to gain from moderate warming than it would lose. On the other hand, France gets 75% of its power from nuclear and is already warm and has a lot of coastal area. France stands to gain from treaties that restrict carbon output. Getting a worldwide agreement like this will be nearly impossible, and would almost certainly be violated anyway.
My takeaway from all this is that we should not sign any agreements on global warming, other than agreements to share research results and open up climate data collected by country and worldwide frameworks for nuclear power regulation and such. We should work towards mitigation and adaptation planning on a global scale, while investing more heavily in alternative energy research and nuclear power.
I could accept a global fund that was used for aid to countries that are suffering from the effects of global warming, so long as that fund didn’t wind up a giant slush-fund for UN bureaucrats like the food-for-oil program. Such a fund is premature today, as the effects of global warming to date aren’t even clear enough for that. And I would want to make sure that such money didn’t just wind up building new palaces and armies for the kleptocrats that run a lot of nations that would be hardest hit. A tall order.
