Guest post by Indur M. Goklany
Some people argue that we are morally obliged to reduce greenhouse gases aggressively because otherwise the world’s current development path would be unsustainable, and our descendants will be worse off than we are.
But will a warmer world indeed be unsustainable, and leave our descendants worse off?
I examine these claims out to the year 2200 in a post titled, “Will Global Warming Make Future Generations Worse Off?” at MasterResources. My analysis uses the IPCC’s own assumptions regarding future economic development and results generated by the Stern Review on the economics of climate change. Note that both the IPCC and Stern are viewed quite favorably by proponents of drastic GHG reductions (see, e.g., here).
The first figure shows for both developing and industrialized countries, the GDP per capita – an approximate measure of welfare per capita – used in the IPCC’s emissions scenarios in the absence of any climate change in 1990 (the base year used to develop the IPCC’s emission scenarios) and 2100. For 2100, the figure shows the GDP per capita assumed in each of four representative IPCC scenarios used in the Stern Review. These scenarios are arranged with the warmest (A1FI) scenario on the left and the coolest (B1) on the right. Below each set of bars, the figure indicates the IPCC’s designation for that scenario (A1FI, A2, B1 and B2) and the corresponding projected increase in average global temperature from 1990 to 2085 (which ranges from 2.1-4.0°C).
This figure shows that, per the IPCC, in the absence of climate change, GDP per capita would grow between 11- and 67-fold for developing countries, and between 3- and 8-fold for industrialized countries. [Some people have complained that these GDPs per capita are implausibly high. If that’s the case then the IPCC’s estimates of climate change are also implausibly high, since these GDPs per capita are used to drive the IPCC’s emissions and climate change scenarios.]
Although the IPCC did not provide any estimates for 2200, the Stern Review assumed an annual growth rate of 1.3 percent after 2100 (Stern Review, Box 6.3). In my calculations below I will assume a more modest growth rate. Specifically, I assume that GDP per capita would double between 2100 and 2200, which is equivalent to an annual increase of 0.7 percent. This is also conservative in light of historical experience: GDP per capita quintupled between 1900 and 2000 (per Maddison 2003).
But climate change might reduce future welfare per capita. Stern famously estimated that unmitigated climate change would reduce welfare by an amount equivalent to a reduction in consumption per capita of 5-20 percent “now and forever” if one accounts for market impacts, non-market (that is, health and environmental) impacts, and the risk of catastrophe. He also raised the spectre that under the warmest (A1FI) scenario, the 95th percentile of the welfare losses due to climate change could rise from 7.5 percent in 2100 to 35.2 percent in 2200.
For the sake of argument and extreme caution, I will assume that the loss in welfare due to uncontrolled climate change under the warmest scenario (A1FI) will indeed equal Stern’s 95th percentile estimate of 35.2 percent. I make this assumption despite the fact that one can’t be too skeptical of centuries-long projections based not only on uncertain climate models but equally uncertain socioeconomic and technological trends. To quote from a paper commissioned by the Stern Review: “changes in socioeconomic systems cannot be projected semi-realistically for more than 5-10 years at a time.” [Emphasis added.] Second, the Review itself emphasizes “strongly” that the numbers should not “be taken too literally.” No less important, many notable economists have even disputed the Stern Review’s more modest 5-20% estimate for losses as overblown (e.g., Yale’s William Nordhaus and Hamburg’s Richard Tol). [The IPCC itself uses 5 percent as the upper limit.]
[For details on the methodology used to estimate welfare losses for the other scenarios check out my paper, Discounting the Future, in the latest issue of Regulation magazine. ]
The following figure shows the net welfare per capita in 2100 and 2200 after adjusting GDP per capita in the absence of climate change downward to account for welfare losses due to uncontrolled climate change per the Stern Review’s 95th percentile estimate. To put the numbers in this figure into context, in 2006, GDP per capita for industrialized countries was $19,300; the United States, $30,100; and developing countries, $1,500.
Note that net welfare per capita in 2200 is underestimated for each scenario because the GDPs per capita in the absence of climate change were underestimated while welfare losses due to climate change were overestimated.
Conclusions
This figure shows that despite understating future net welfare per capita:
- Under each scenario, net welfare for both developing and industrialized countries increases from 1990 to 2100, and from 2100 to 2200. Thus Nobelist Robert Solow’s (1993) criterion for sustainable development – namely, that current generations should “endow [future generations] with whatever it takes to achieve a standard of living at least as good as our own” – should be easily met. In other words, claims to the contrary, if the world’s current developmental path is unsustainable, it won’t be because of climate change.
- Well-being in both 2100 and 2200 should, in the aggregate, be highest for the richest-but-warmest (A1FI) scenario and lowest for the poorest (A2) scenario, again regardless of climate change. That is, the richest-but-warmest world is to be preferred over poorer-but-cooler worlds. Thus, if humanity could choose between the four IPCC scenarios, for the next several decades it should choose to realize the richest-but-warmest (A1FI) world. In other words, in order to improve net welfare, governments should be striving to push their countries on the path of higher wealth rather than lower carbon. So why are the world’s governments trying to negotiate a deal in Copenhagen later this year that would make their populations poorer and reduce their welfare?
- In both developing and industrialized countries net welfare per capita should be much higher in 2100 than in 1990, and higher still in 2200, notwithstanding any climate change or which scenario one picks. That is, regardless of the circumstance, future generations, particularly in today’s developing countries, will be better off than current generations. Thus the premise underlying the argument that we are morally obliged to control emissions now to ensure that future generations won’t be worse off isn’t supported by the Stern Review’s own analysis.
In fact, this raises the question whether it is moral to require today’s poorer generations to spend their scarce resource on anthropogenic GHG-induced global warming – a problem that may or may not be faced by future, far wealthier and technologically better endowed generations – instead of the more urgent, real problems that plague current generations and will continue to plague future generations as well.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
Projections of future growth and prosperity are well and good, except they ignore the 800 lb. gorilla. The $100 trillion or so of unfunded liability.
Some guy named Waxman proclaimed that the climate bill in Congress would not harm the economy, but would help it by creating new jobs and reducing our dependance on oil.
“Iceberg? Nonsense. Full speed ahead.” (14 April, 1912)
Cold Play (06:23:03) :
And my point is?
……..and thus our banking system in the UK has required no government help
My goodness Old Boy what have you been smoking ? Do the Northern Rock and the Royal Bank of Scotland debacles not ring a bell ? Not even a tiny one ?
Does the upcoming need for the UK Government to seek loans from the IMF mean nothing.
There’s jingoism and there’s plain untruth. No help because the UK economy has been well managed my eye !
Reading these posts it seems (for a foreigner) that you have fell captive of an invading army of nuts disguised as scholars, thoughtful politicians, respectful pastors, priests, and neighbours, and, above all that, “here comes the sun”….
It is not funny, though it would seem to, for a very black humor sense. Hopefully you’ll find a solution ASAP.
John Galt!
If you critizise my argument then you are citizising the main argument of the lead article; future generations will – hopefully – be wealthier than we. But to be wealthy you need to invest. I will change my last sentences in the following way:
I have always questioned this policy. Future generations benefit more from inheriting a well functioning country, than from a small debt, AND A WELL FUNCTIONING ECONOMY ASKS FOR INVESTMENTS. AND INVESTMENTS WHICH CHANGE THE ECONOMY’S WAY OF FUNCTIONING IN A RADICAL WAY, TAKES TIME (COMPARE THE US MOTOR WAY SYSTEM, BUILT 1950 – 70!) . And – as Mr Goklany says – an increasingly wealthy population will have no problem with the debt.
A COUNTRY WHICH BORROWS MONEY FOR ITS CONSUMPTION (AS THE US) IS NOT MY MODEL. BUT TO BORROW TO INVEST IS GOOD CAPITALIST BEHAVIOR. OR?
Sigh… Cold Play should have signalled his(her?) brilliant satire more clearly for our US cousins. Ending with a Monty Python quote is unfortunately not enough…
sod (06:27:54) :
There is a story about the dude that travels out west and wants to go for a horse ride. When all is ready he jumps into the saddle but is facing the rear of the horse. An onlooker comments, “You seem to be facing the wrong direction.” And the dude says, “How would you know, I haven’t told you which way I am going.”
At the tail end of the text for this thread there is a paragraph with two external links. I suggest you turn yourself around, read that paragraph and follow up on the links given, go set on a stump for awhile and contemplate the message of this thread. A mind is a terrible thing to waste.
Roo
It clearly passed me by and I am a Python fan. Now if he’d said that in his spare time Mr Stern was also a succesful breeder of Norwegian Blues that would have rung a bell.
MIT professor adjusts his cap-and-tax cost estimate…
Fuzzy Math
According to an MIT study, cap and trade could cost the average household more than $3,900 per year.
http://weeklystandard.com/Content/Public/Articles/000/000/016/412cwueq.asp
NOTHING the government does is ever “cheap” or has a negligible impact…and this doesn’t even quantify the cost of lost freedoms. So, it looks like future generations WILL be poorer, afterall!
“John Galt (05:54:05) :
I’d like to know what stage of human civilization has ever been ’sustainable’? The stone age, perhaps?”
Assuming you are human and not a robot, you answer your own question by existing.
Surprisingly and quite in line with this, the NY Times recently posted:
Use Energy, Get Rich and Save the Planet
Pearland Aggie (10:04:00) :
“it looks like future generations WILL be poorer, afterall!”
But they will be more democratic as far as they will be more equalized to the rest of the world.:)
Michael Hauber (23:14:00) :
If you accept the Stern report conclusion that climate change may have an economic impact up to 35% reduction output, do you also accept his conclusion that avoiding the worst of climate change would cost about 1% of our economic output?
Is such a price worth paying for environmental and heritage reasons – i.e. preventing major ecosystem changes (or disruption if you’d rather) and the loss of significant human heritage if many of our major coastal cities eventually (as in centuries in the future) become submerged (depending on whether sea walls etc can save them)?”
No, not a single cent.
CO2 has ZERO impact so why spending money to compensate for non existing threats?
CodeTech (08:32:19) :
Pamela Gray:
Looking out my office window to the West, the entire horizon is the Rocky Mountains… currently looking a lot less “rocky” and a lot more “snowy”. Usually by this time of year there is more gray than white. Calgary had a record year for snowfall, which is not something to celebrate unless you’re an avid skier, and the mountain areas are still reporting unusually high snow pack. Of course, the glaciers out there are still growing, but it’s funny that the most recent official word on them is several years old, and they most likely get counted as “shrinking”… funny how 1998 did that.
All that horizon full of white has to go somewhere, and over the next 6-8 weeks it will be washing in this direction. There have been years in the past that our rivers have crested at dangerously high levels after snowy winters, but we may be looking at records. And of course, because of the way we chose sites for cities, everything is built on a river somewhere.
In 2005 Calgary had an exceptionally wet June, on top of the already saturated ground from spring melt. The end result was flooding, and a LOT of it. Our main dam, which holds our drinking water, got a very scary crack down the middle after it started overflowing even with the gates wide open, and nobody is actually certain that it can survive another flood year. If it goes, the city’s most affluent area and the downtown core will take massive damage.
And back on topic, ALL generations are morally obligated to leave the world, if not better, then also not worse for future generations. Once again, it comes down to the question of… define better! I agree with commenters who point out that dismantling our very way of life is NOT leaving a better world. And if the kids I know who are part of the current generation is any indication, they won’t be smart enough to fix anything themselves.
CodeTech (08:32:19) :
Why don’t you keep a long story short,
Invite the Lady for a date!
Well Economics and climatology have about the same pseudo-science calibre, so the stern article is probably about doubly as good as ancient astrology as the Japanese Science advisors are telling their Government.
Anybody who thinks that the history of energy development has been a process of carbon elimination, just isn’t thinking straight.
We started off getting our energy by clambering around in fig trees to gather figs for their processable hydrocarbon molecules. The monkeys were better at getting the higher figs than we were, so we let them get figs; then we smashed their brains with a rock, and ate them after they had already processed the figs. And when a lightning strike set fire to the straw fields, and burned up some antelopes, we found out that they were a pretty good source of hydrocarbons too, so we stored the fire in a pot in a cave, so we could light off the grassland, when we wanted another springbok steak.
Basically we have sought carbon, and hydrogen anywhere we could find them in usable form. Most of the hydrogen already got burned up by Mother Nature to make the oceans to grow fish in which was another good source of hydrocarbons.
The world will be still burning carbon long after the Al Gore species has become a rare archeological specimen find.
So enjoy urth day, and say something Shakespearian while you are at it.
George
Adolfo Giurfa (10:52:28) :
But they will be more democratic as far as they will be more equalized to the rest of the world.
You know, that may be the saddest irony of all…that these types of socialistic endeavors never equalize people by bringing up the less affluent but by rather bringing everyone down to the same level, which will invariably lead to an overall reduction in wealth for all. The cap-and-tax program is exactly that…a way to extract wealth and redistribute it through “watermelon” politics (“watermelon” because those that propose such travesties are ‘green’ on the outside but ‘red’ on the inside).
Katherine (10:42:21) :
Surprisingly and quite in line with this, the NY Times recently posted:
Use Energy, Get Rich and Save the Planet
The old wealth-is-bad IPAT theory may have made intuitive sense, but it didn’t jibe with the data that has been analyzed since that first Earth Day. By the 1990s, researchers realized that graphs of environmental impact didn’t produce a simple upward-sloping line as countries got richer. The line more often rose, flattened out and then reversed so that it sloped downward, forming the shape of a dome or an inverted U — what’s called a Kuznets curve….
As their wealth grows, people consume more energy, but they move to more efficient and cleaner sources — from wood to coal and oil, and then to natural gas and nuclear power, progressively emitting less carbon per unit of energy. This global decarbonization trend has been proceeding at a remarkably steady rate since 1850, according to Jesse Ausubel of Rockefeller University and Paul Waggoner of the Connecticut Agricultural Experiment Station….
Of course, even if rich countries’ greenhouse impact declines, there will still be an increase in carbon emissions from China, India and other countries ascending the Kuznets curve. While that prospect has environmentalists lobbying for global restrictions on greenhouse gases, some economists fear that a global treaty could ultimately hurt the atmosphere by slowing economic growth, thereby lengthening the time it takes for poor countries to reach the turning point on the curve.”
Katherine (10:42:21) :
Al Gore’s Call Center Gang will drive the NYT Editor crazy and what follows is what happened with the publication from Harold Amber at the Huffington Post.
We need someone to keep a list of the new words spotted recently…
climastrologist, anecdata… any others?
sod (06:27:54) :
i really like this approach!
why should we pay for the school of our children, if they will earn more money than we do anyway?
why care for their health, when medical improvements can fix it in the future?
why build a house today, when houses will be much better and cheaper in 20 years?”
Sod,
It is your responsibility to take care of your children but it is your duty to protect the freedom of man and the American Dream (for what it’s worth today.
Any government control over CO2 Emissions is a threat to freedom.
Any cent spend on the AGW Hoax a loss of capital.
Jon Jewett (06:51:25) : .
Please notice I said economies. Economies do not act rationally no matter how you try to pull them in any direction.
kuhnkat (07:56:55) :
Cold Play,
If Britain is in such good economic shape, why did a gentleman justly castigate the PM(?) for bankrupting the nation??
Primarily you mentioned the banks being in good shape. Where did you get that idea??
paul james (08:57:11) :
Cold Play (06:23:03) :
And my point is?
……..and thus our banking system in the UK has required no government help
My goodness Old Boy what have you been smoking ? Do the Northern Rock and the Royal Bank of Scotland debacles not ring a bell ? Not even a tiny one ?
Does the upcoming need for the UK Government to seek loans from the IMF mean nothing.
There’s jingoism and there’s plain untruth. No help because the UK economy has been well managed my eye !
END of Attack on Poor me and less of the old boy?
OOPS a Daisy! Guys I don’t think my post was properly read as the irony seems to have been lost on you, my fault for sure.
In plain words why does Nicholas Stern expect anyone to take him seriously on a subject he has no expertise in, whilst on a subject he is supposed to be have expertise in, he was a part of the same ridiculous cabal that allowed the economies of the world to go into global melt down.
Silly me, global melt down global warming I get it.
“Jared (01:44:43) :
I should add that we’ll be out of drinking water if we ‘let’ the glaciers come back. How are we going to drink water if the Great Lakes are covered by glaciers, again? We need to sacrifice for future generations.
Past man did not sacrifice for us and let the wooly mammoth go extinct do to man-made climate change. They did a disservice to us, let’s not do the same.”
Invest in Ice futures! The processing of glacial ice for drinking water is the next great industry! Yaks and Musk Oxen breeding would be good idea too, as we’ll need some way to transport all that ice/water after the oil reserves become buried under continent-sized glaciers.
Cold Play (13:14:15)
In plain words why does Nicholas Stern expect anyone to take him seriously on a subject he has no expertise in, whilst on a subject he is supposed to be have expertise in, he was a part of the same ridiculous cabal that allowed the economies of the world to go into global melt down.
Get real CP- Lord Stern understands what you clearly do not!
Unlike you he has a real grasp of the financial implicarions predicated by sooner-than-expected crocadilic arctic migrational tendencies!
BTW- isn’t he a total [snip]
sod (06:27:54) :
i really like this approach!
why should we pay for the school of our children, if they will earn more money than we do anyway?
RESPONSE: I recognize you are being sarcastic, but your sarcasm is misplaced. There is a world of difference between spending money on educating our children and on attempting to reduce global warming. First, the benefits of spending on education to society are real and time tested, whereas one cannot be certain that spending on the latter will produce commensurate benefits. More importantly, the IPCC scenarios assume “business-as-usual”, which implies that past and present trends in education (and spending on education, as well as other critical determinants of economic development) will necessarily persist into the future. Therefore, were society to decide that it would no longer fund education then one of the basic premises built into the scenarios would be violated which means that the future levels of human welfare assumed in the IPCC scenarios would no longer be valid. And your descendants may indeed be worse-off (and earn less than you). So if you care about your descendants not being worse-off than you, worry about whether they get an education, but don’t worry as much about global warming.
Passing over the cart (economics) before the horse (AGW) issue, I’d like to address the issue of time. As a cautious layman, I wouldn’t (without recommendation) read anything in the GW field that was as old as 2006. And that would seem to include the (more recent) 1977 IPCC report, since its cut-off date for included research was much earlier. More recent research (Copenhagen, et al) and events (melting Arctic ice, and mountaintop glaciers; methane from melting permafrost, etc.) suggest that this 1977 IPCC report was too conservative. So, a current projection would see climate changes and sea-level-rises occurring sooner. The mountain top glaciers that feed many rivers will be gone. And some areas will be wetter, and others drier. And all this for a larger population than exists today. There will be no place here for the economic analyst; until all the wars are over.
After another 2 years of non-global warming hopefully the people will take action and throw Obama’s policies out on their ass. If the Republicans won’t run on an anti-AGW platform then it’s time for an independent party, or a new tea party!