GAO Report: Cost of Climate Change Damage Far Less Than Cost of Decarbonization!

Guest rant by David Middleton

H/T to ivankinsman for bringing this to my attention.

Government report calls on Trump to act on climate change

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By Eli Watkins, CNN
Updated 1441 GMT (2241 HKT) October 24, 2017

Washington (CNN)A government report released Monday is sounding an alarm over the threat of climate change, and the government’s response.

The US government has spent more than $350 billion over the past decade in response to extreme weather and fire events, and the Government Accountability Office report estimated the US would incur far higher costs as the years progress if global emission rates don’t go down.

In the report, GAO called on President Donald Trump to use the information GAO compiled to help identify risks posed by climate change and “craft appropriate federal responses.”

The US has seen billions of dollars in damage from hurricanes and wildfires this year, which experts say climate change exacerbated. Congress is due this week to consider another multi-billion dollar aid package to help Puerto Rico after it was hit by back-to-back hurricanes.

The GAO provides nonpartisan information to members of Congress, including audits of government activities and reports about public policy. Its latest report was requested by Republican Sen. Susan Collins of Maine and Democratic Sen. Maria Cantwell of Washington.

[…]

Blah, blah, blah…

CNN

Firstly… Is it my imagination?  Or does the CNN “reporter” appear to be about 12 years old?

Secondly… The CNN article babbles about climate change and the US government spending $350 billion over the past decade in “response to extreme weather and fire events,” but never mentions any other actual numbers.

The LA Times did include some numbers:

The extreme weather events of the past decade that scientists believe were exacerbated by climate change added more than $350 billion in costs to taxpayers, according to the report, a huge drain on the budget as funds were diverted to cover more disaster relief, crop and flood insurance, firefighting costs, and infrastructure and public lands repairs. Those demands threaten to increase by $12 billion to $35 billion each year by the middle of the century, it said. By the end of the century they could go up each year by as much as $28 billion in today’s dollars, a crushing cost for taxpayers.

LA Times

The LAT numbers are useless… “Those demands threaten to increase by $12 billion to $35 billion each year by the middle of the century, it said. By the end of the century they could go up each year by as much as $28 billion in today’s dollars…”  They mix nominal dollars up to 2050 and then revert to current dollars over the second half of the century.

So, I went and downloaded the GAO report.  A few funny things first:

The methods and the studies that use them produce imprecise results because of modeling and other limitations…

Methods used to estimate the potential economic effects of climate change in the United States are based on developing research from a small but growing number of researchers. These methods are complex because they link different types of complicated climate and economic models to assess how projected changes in the climate could affect different sectors and regions. They produce imprecise results…

Methods used to estimate the potential economic effects of climate change in the United States are based on developing research being undertaken by a small but growing number of researchers, according to the literature we reviewed and several experts we interviewed.

Methods used to estimate the potential economic effects of climate change in the United States are complex because, according to literature we reviewed and many experts we interviewed, they use different types of complicated climate and economic models that are linked together in a sequential framework that uses the results of one model as input to another…

According to the literature we reviewed and many experts we interviewed, methods used to estimate the potential economic effects of climate change in the United States, and the national-scale methods that use the methods, produce imprecise estimates of economic effects because of data and modeling limitations…

According to a 2012 National Academies report, climate models have advanced over the decades to provide much information that can be used for decision making today, but there are and will continue to be large uncertainties associated with climate modeling.

According to literature we reviewed, another key source of uncertainty is how much global temperatures will rise in response to a change in carbon dioxide concentrations, a factor known as climate sensitivity.

Modeling the effects of climate change is challenging because, among other things, it often involves projections over long periods into the future, and these projections become more uncertain over time.

Several experts we interviewed noted that even though the methods produce imprecise results…

Anybody else notice a pattern here?

Here’s the rub: “economic effects of the six sectors could reach 0.7 to 2.4 percent of the U.S. gross domestic product per year by the end of this century.” 

They can’t forecast the GDP out to the end of the century within 0.7-2.4%… But they can accurately forecast a loss of “0.7 to 2.4 percent of the U.S. gross domestic product per year by the end of this century” based on a cascade of complex models which produce imprecise results, with the uncertainty increasing over time…

Oh… Here’s the real kicker:

The study did not estimate the potential costs of significant global action to reduce greenhouse gas emissions, noting that such costs were well-examined elsewhere in the literature.

Really?  Where?  In 2014, the IEA put the global cost of deep decarbonization at $44 trillion.  According to the BP’s 2017 Statistical Review of World Energy, in 2016, the world’s primary energy consumption was 13,276.3 million tonnes of oil equivalent (MTOE).  US consumption was 2,272.7 MTOE, 17% of the total.  That would make our share of decarbonization $7.5 trillion.

If we accept that climate change is currently costing us $35 billion per year ($350 billion over past decade) and accept the GAO’s estimate of future costs:

A November 2016 assessment by the Office of Management and Budget (OMB) and the Council of Economic Advisers found that recurring costs that the federal government incurred as a result of climate change could increase by $12 billion to $35 billion per year by mid-century and by $34 billion to $112 billion per year by late-century, the equivalent of $9 billion to $28 billion per year in today’s economy.

The total cost of climate damages to the US by 2100 would be $161 trillion.  Would it make sense to spend $7.5 trillion now (or in the near future) if it averted $161 trillion worth of damages over the next 83 years?

What is ‘Net Present Value – NPV’

Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of a projected investment or project.

The following is the formula for calculating NPV:

Net Present Value (NPV)

where

Ct = net cash inflow during the period t

C= total initial investment costs

r = discount rate, and

t = number of time periods

A positive net present value indicates that the projected earnings generated by a project or investment (in present dollars) exceeds the anticipated costs (also in present dollars). Generally, an investment with a positive NPV will be a profitable one and one with a negative NPV will result in a net loss. This concept is the basis for the Net Present Value Rule, which dictates that the only investments that should be made are those with positive NPV values.

Read more: Net Present Value (NPV)http://www.investopedia.com/terms/n/npv.asp#ixzz4wRejUYxq
Follow us: Investopedia on Facebook

In the real world, all investments have pass an NPV analysis.  The GAO tangentially addresses this in their report:

Challenges also arise with discounting future benefits and costs, particularly when modeling over long time frames. According to OMB, benefits or costs that occur sooner are generally more valuable than those that occur later. However, according to the literature reviewed and some experts interviewed, the appropriate discount rate to apply when considering benefits and costs across generations, such as those associated with climate change, is subject to much debate.35 According to one of its authors, this debate was one reason why the American Climate Prospectus study did not present its estimates in discounted terms.

100% unmitigated bull schist!

In the real world a 7% discount rate is the standard.

As a default position, OMB Circular A-94 states that a real discount rate of 7 percent should be used as a base-case for regulatory analysis. The 7 percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. economy…

https://www.transportation.gov/sites/dot.gov/files/docs/OMB%20Circular%20No.%20A-4.pdf

Discounting Away the Social Cost of Carbon

A 7% discount rate essentially makes the NPV of the Social Cost of Carbon $0 or negative.

A 7 percent discount rate, which has been used by the EPA for other regulatory analysis, could actually lead to a negative carbon cost, which would seem to imply that carbon emissions are beneficial.

Bloomberg

Getting back to the GAO’s epic failure… Here’s what happens when I apply a 7% discount rate to their assessment of climate damages:

where

Ct = net cash inflow during the period t (climate damage to be averted)

Co = total initial investment costs (decarbonization)

r = discount rate, and

t = number of time periods

Ct = net cash inflow during the period t  $      160,972,000,000,000
Co = total initial investment costs  $           7,480,000,000,000
r = discount rate, and 7%
t = number of time periods 83
 Ct/(1+r)^t  $               585,998,888,297
NPV  $         (6,894,001,111,703)

Discounted_GAO_Report Excel Spreadsheet (updated)

The NPV of the $7.5 trillion decarbonization “investment” is -$6.9 trillion.  That’s a VERY negative NPV.

A positive net present value indicates that the projected earnings generated by a project or investment (in present dollars) exceeds the anticipated costs (also in present dollars). Generally, an investment with a positive NPV will be a profitable one and one with a negative NPV will result in a net loss. This concept is the basis for the Net Present Value Rule, which dictates that the only investments that should be made are those with positive NPV values.

If we took $7.5 trillion today and put it in 30-yr Treasuries at 2.89% (assuming a constant interest rate), we’d have nearly $80 trillion in 2100.  If we employed that capital at a 7% return, we would have nearly $2.1 quadrillion by the turn of  22nd Century… enough to pay for the cumulative climate damages 13 times over.

Now… My approach to this has been very simplistic and probably isn’t correct.  I have no doubt that an accountant would tell me that my approach was totally wrong… However, the GAO inputs were little more than SWAG’s pulled out of the place SWAG’s are pulled out of.  It really is the epitome of mental [Censored]ation for the US General Accounting Office to prepare this sort of report with SWAG’s based on models that have never demonstrated predictive skill… And to not factor in costs, much less discount them.  It is abominable.  President Trump should hit that part of the swamp with a neutron bomb.

Note 1:  The fact the I accepted the GAO’s estimates of the costs of climate-related damages and used them in my calculations, does not mean that I agree with them.  There is absolutely no basis to support the claim that the $350 billion spent over the past decade in response to extreme weather and fire events was even remotely related to climate change or greenhouse gas emissions.  Nor is there any evidence that decarbonization of our energy infrastructure will avert any future expenditures in response to extreme weather and fire events.

Note 2: Yes.  I know that the GAO report doesn’t literally say that the cost of climate damage will be far less than the cost of decarbonization.  It didn’t even address the costs.  It just regurgitated Obama maladministration talking points.

Addendum

A comment by Steve Zell leads me to think the I overestimated the GAO’s climate damage SWAG.  In my initial calculation, I started out with $35 billion in 2017.  I incrementally grew the annual increase from $12 billion in 2018 to $112 billion in 2100.  I compounded the damage by adding the annual increase to the previous year’s damages.  This resulted in damage equivalent to 4% of US GDP in 2060, higher than the GAO’s upper SWAG range.  I re-ran the calculations using a constant baseline of $35 billion.

Ct = net cash inflow during the period t  $           8,086,000,000,000
Co = total initial investment costs  $           7,480,000,000,000
r = discount rate, and 7%
t = number of time periods 83
 $                 29,436,094,543
NPV  $         (7,450,563,905,457)

This leads to a -$7.5 trillion NPV at a 7% discount rate.  The NPV is negative even at a 3% discount rate in this scenario.

Ct = net cash inflow during the period t  $           8,086,000,000,000
Co = total initial investment costs  $           7,480,000,000,000
r = discount rate, and 3%
t = number of time periods 83
 $               695,415,051,803
NPV  $         (6,784,584,948,197)

Addendum 2

A comment by Craig:

David, in your example, I think you discounted the whole $161T back from 2100. To calculate the NPV, each annual cash flow is discounted to present for the appropriate number of years and the individual discounted cash flows are summed, for example, 2018 is discounted for 1 year, 2019 is discounted for 2 years, etc. It will make a huge difference in your result. Excel has a formula (NPV) that makes it easy.

Yep.  I did discount the entire cash flow back from 2100.  I also realized that 2017-2100 has 84 intervals, not 83.  So, I went back and applied the NPV formula to each year, using the static baseline, and ran NPV’s for discount rates of 7%, 5%, 3%, 1% and 0.25% and never obtained a positive NPV.

Ct = net cash inflow during the period t
Co = total initial investment costs $7,480,000,000,000
r = discount rate, and 7%
T = number of time periods                                              84
Undiscounted Cash Flow $8,086,000,000,000
Discounted Cash Flow $884,761,102,227
NPV ($6,595,238,897,773)
Ct = net cash inflow during the period t
Co = total initial investment costs $7,480,000,000,000
r = discount rate, and 5%
T = number of time periods                                              84
Undiscounted Cash Flow $8,086,000,000,000
Discounted Cash Flow $1,335,842,279,142
NPV ($6,144,157,720,858)
Ct = net cash inflow during the period t
Co = total initial investment costs $7,480,000,000,000
r = discount rate, and 3%
T = number of time periods                                              84
Undiscounted Cash Flow $8,086,000,000,000
Discounted Cash Flow $2,344,891,536,915
NPV ($5,135,108,463,085)
Ct = net cash inflow during the period t
Co = total initial investment costs $7,480,000,000,000
r = discount rate, and 1%
T = number of time periods                                              84
Undiscounted Cash Flow $8,086,000,000,000
Discounted Cash Flow $5,050,177,743,850
NPV ($2,429,822,256,150)
Ct = net cash inflow during the period t
Co = total initial investment costs $7,480,000,000,000
r = discount rate, and 0.25%
T = number of time periods                                              84
Undiscounted Cash Flow $8,086,000,000,000
Discounted Cash Flow $7,148,802,502,752
NPV ($331,197,497,248)

 
I still get a negative NPV at almost any discount rate above zero-point-zero.

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116 thoughts on “GAO Report: Cost of Climate Change Damage Far Less Than Cost of Decarbonization!

  1. Dave, I am unclear. What is your actual position on whether we go ahead and invest that $7.5T? It’s for the children after all.

    • Natural disasters are MADE more expensive when they build cities in flood,storm prone areas.

      New Orleans is BELOW sea level,Miami barely above sea level,Houston on a flood plain, Seattle and San Fransisco on easy to smash ground from Earthquakes, on and on.

      Early in the Holocene,when the Glacier melting back was in earnest,there were many cities on the coast, that are today well underwater,did they learn from it?

      • Just wait until a km+ thick glacier comes bearing down on Manhattan once more. We know with absolute certainty that this has happened many times before and will inevitably happen again no matter how much CO2 we can pump into the atmosphere. Hopefully by then, climate science will have converged to the truth about how small the finite effect incremental CO2 has on the average surface temperature.

      • Sunsettommy October 24, 2017 at 11:15 am :

        You left out areas that get tornadoes, blizzards and ice storms. So your argument seems to be that we just don’t build anywhere.

      • Houston is on a flood plain with properly designed drainage. This is how we got a 500 year storm with significantly less damage than New Orleans did with a 50-year storm. We need to be this close to the sea in order for industry to work. There’s no place without risk. You just have to mitigate it properly.

      • Every society has a flood story (eg. Noah, Atlantis). link When the glaciers started melting about 20,000 years ago, the oceans were about 400 feet lower than they are now. Even as recently as 6000 years ago, settlements were being inundated. link

        Since there is evidence of ‘cities’* as much as 8,000 years ago, it is quite possible that cities were flooded by the rising seas.

        *The big deal with ‘cities’ is that they indicate that there was a significant portion of the population not directly involved in agriculture or hunting. In that context, cities could be quite a bit smaller that what we would consider to be a city today. For instance, the city of Jericho would have been only one or two thousand.

      • co2isnotevil October 24, 2017 at 12:51pm Just wait until a km+ thick glacier comes bearing down on Manhattan once more. We know with absolute certainty that this has happened many times before and will inevitably happen again
        ————
        Well, there is an obvious solution: Make Panama Strait Again! The glaciation cycle began when the strait between both Americas closed. No idea however how many trillions that would cost.

      • Back in the 70s or 80s, there was a proposal to convert it to a sea level canal, effectively restoring the Panama Straight.

      • Of course they learned from it. They stopped burning sacrifices on the pagan altars, in order to reduce their co2 footprint.

  2. Moreover, David, this represents total disaster costs. Surely the major part of the disaster arises naturally. So, on average, the “climate change portion by their own estimates can’t be more than a quarter of it. And of its increasing, the main ‘costs’ are in the latter quarter of the century making NPV even lowwr

    • That was my thought, too, Gary. These figures appear to be total cost of these disasters, not the portion that is attributed to climate change. If we bite the bullet and spend all this money (and every other country does too), does that mean we’ve seen the end of *all* weather-related, I mean, climate-related, natural disasters? If so, maybe it would be worth it!

      • But, but, but, if we just all give up fossil fuels, it will soon be all sunshine, rainbows, unicorns, etc.

      • @ KPhelan
        Sorry to pop your dreams, but if we give up fossil fuels, we also have to shoot all unicorns. Unicorn farts are the strongest GH gases in the world. Leaving these pests alive would be counter productive. But the rainbows would still look nice.

  3. We should respect the opinion of experts much more. According to experts, we did run out of oil twenty years ago. Yet we mindlessly fill our car tanks with gasoline. That’s totally disrespectful.

    • Do I detect a hint of sarcasm? Continuing with that theme …

      The more societal wealth we destroy now, we’ll have less of it exposed to future loss.

  4. So even using Gospel in Gospel out pseudoscience, they still can’t make a good case for shifting our entire economy away from fossil fuels before innovation and technology naturally takes us there.

    This type of crap needs spoofed. Maybe the GAO could research some papers on eugenics and present the “evidence” that we need to invest heavily on human breeding and sterilization projects to protect future generations, or maybe some research on frontal lobotomies to show that the dearth of this procedure has led to an increase in mental health related violent crime.

    • Hell, according to Paul Ehrlich, we mostly all died in a famine about 1975, so we shouldn’t be using any resources at all.

      • Sometimes I feel the effect of Ehrlich’s predicted famines, then I fill my F350 up with diesel and drive over to Burger King

      • You can’t say so! Paul was stoned all seventies, and besides, he said IF nothing is done, we’ll all be dead.

        I think he was right! :-)

  5. We just want to remove the CO2 from combusted fossil fuel exhaust and transform it into useful-saleable products. Our Sidel Carbon Capture Utilization System will remove over 90% of the CO2 for less than $20 a ton. With the products we are recovering and producing we want to offer the utilities a return on their investment over the next 10 to 15 years.
    Instead of CO2 being bad for the environment we want the CO2 to be good for the economy. Then there will be the tens of thousand of full time jobs that will be created dealing with this CO2. Applying our CCU System will even be better for the environment than the past Administrations Clean Power Plan. Much more CO2 removed, and it’s not sequestered so we never have to worry about it ever leaking back out of the ground.
    http://www.SidelGlobal.com

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      • Yeah, but they are only artificial diamonds. My girlfriend would dump me if I only gave her ‘fake’ diamonds!

    • CO2 is not bad for the environment. It is the fundamental plant food for all flora on Earth. CO2 is a free and all natural by product of combustion. No mitigation is required or needed. You should find a line of work that provides real benefits to humanity, rather than preying on the CAGW industry created irrational fears of a 0.04 percent by volume atmospheric trace gas.

      Free the CO2! The plants agree: It’s the Green Thing to Do!

      • Yes, CO2 along with water and sunlight powers nearly all life on the planet. I’m absolutely certain that when we eventually do run out of fossil fuels, mankind’s biggest challenge will be how to boost atmospheric CO2 to keep agriculture from crashing.

    • Why & how will your company apply a standard of the amount of co2 that should be in our atmosphere ? 200ppm-to —.At 200ppm the plants won’t do anything. Photosynthesis happen’s better when the co2 is about 400ppm-500ppm.

    • You forgot the /sarc, but I guess everybody got it – CO2 bad for the environment!!! Haaaa-haaaa!!

    • An solution for a nonexistent problem. Not quite snake oil, but equally as useful. I have a hard time seeing this as economical for the current market of CO2 byproducts.

  6. [Quote from post]A November 2016 assessment by the Office of Management and Budget (OMB) and the Council of Economic Advisers found that recurring costs that the federal government incurred as a result of climate change could increase by $12 billion to $35 billion per year by mid-century and by $34 billion to $112 billion per year by late-century, the equivalent of $9 billion to $28 billion per year in today’s economy.

    The total cost of climate damages to the US by 2100 would be $161 trillion. Would it make sense to spend $7.5 trillion now (or in the near future) if it averted $161 trillion worth of damages over the next 83 years? [End Quote].

    If the repair cost for storms increased linearly from $35 billion per year now to $112 billion per year in 2100, the total cost (not accounting for inflation) would be 83 * (35 + 112)/2 = $6100 billion = $6.1 trillion, not $161 trillion.

    It certainly would NOT make sense to spend $7.5 trillion now to avoid $6.1 trillion in storm damages over the next 83 years, even without discounting the $6.1 trillion for inflation.

    Besides, $112 billion in storm damages in 2100, at a 3% inflation rate, would be the equivalent of $9.6 billion now. Are the study’s authors assuming that storm damages in 2100 will be less than the $35 billion per year average over the last decade?

    Former President George W. Bush had a good name for this study: Fuzzy Math.

    • I took the $112 billion in 2100 as being in addition to the $35 billion baseline. My initial stab at this took the same approach you did. That resulted in the undiscounted NPV being negative.

      • David, in your example, I think you discounted the whole $161T back from 2100. To calculate the NPV, each annual cash flow is discounted to present for the appropriate number of years and the individual discounted cash flows are summed, for example, 2018 is discounted for 1 year, 2019 is discounted for 2 years, etc. It will make a huge difference in your result. Excel has a formula (NPV) that makes it easy.

      • My accountant’s name is Craig… Coincidence?

        The Excel NPV formula doesn’t have line to enter Co (the investment cost.) If I enter this:

        =NPV(7,H2:H85)

        I get $5,217,396,715 as the NPV of the discounted cash flow at 7%.

      • In Excel, if C0 happens at T0 (for example, you are cash out of pocket for the purchase of an asset ahead of the asset generating any cash flow), you would simply subtract it from the calculated NPV as in the formula you showed. If it happens during T1 [or another period(s)], you would subtract it from the corresponding period cash flow in the numbers you feed into the NPV function.

      • Remember, though, David: Garbage In, Garbage Out; speculation about future events and costs/benefits is not truth.

      • David, speculation about, among other things, the NPV of CO2 abatement in your “But the NPV analysis can actually be correct.” is just that: speculation. Additionally, the use of AR5 RCP 8.5 should give any thinking being pause.

      • Great clarification, David.

        Having done many high-stakes financial analyses, I can testify to the rampant misuse of NPV tools.

      • I get an NPV of -$930 billion. Although, I probably should spread the “investment” cost out over the first 20-50 years.

      • An important consideration is that in an analysis like this, the discount rate is a proxy for risk, and 7% would suggest a fairly low risk meaning the future cash flows are fairly certain. I’ve seen many VC deals subjected to 50%+ discount rates. The less certain the future cash flows, the higher the appropriate discount rate. Given the nature of the assumptions behind these climate cost cash flows, I would say that they are far from certain and the discount rate should be much higher than 7%. Just clicking it up a point or two will lower the NPV by $trillions.

      • =NPV(7,H2:H85) is discounting by 700% not 7%. If you plug in 7%, I think you’ll get -$835B. Note that increasing the discount rate by just 1 point to 8% takes the NPV to -$2.4B

    • In the post, I incrementally increased the annual damage baseline by adding the annual growth to the previous year.

      If I just use a straight $35 billion baseline and add the incrementally increasing additional damage, I get total damages of just under $8.1 trillion, with an NPV of -$7.5 trillion at a 7% discount rate and -$6.8 trillion at a 3% discount rate.

    • Just one of many critical comments on the Report: Infrastructure growth and mitigation measures (for current losses) in vulnerable areas cannot be estimated in such a speculative analysis.

  7. “based on developing research being undertaken by a small but growing number of researchers, according to the literature we reviewed and several experts we interviewed.”

    I detect the ugly stench of post-Normal pseudoscience in the GAO Report”

  8. Early in the CCN report it refers to “global emission rates”. These are not defined. Is it now assumed that the only emission on earth that matters is human-spewed CO2, or is this referring to something else?

  9. So the LA Times is concerned that $28 billion dollars increase per year is a crushing cost for taxpayers. Really?!? $100 per year per person in the US right now is a crushing cost? I’m sure if it was proposed to spend $28 billion extra per year for medical care for illegals that it would only be a tiny sacrifice and we need to pony up our fair share.

  10. The first thing I do with with GAO report is read the question and see who asked it.

    For example there was a study to see if customers of investor owned power companies were gouged. Yes, indeed!

    However, one has to wonder why the question was not asked who did the gouging and how bad was it. How much power was sold and at price from public records.

    The biggest gougers were public power that gets to play be different rules. Los Angles Water and Power made ENRON look good. The biggest finger pointer was S. David Freeman, LDWP GM.

    A useful GAO report looked at power production deregulation in three states. It work in Texas and failed in California.

    • The report was prepared at the request of Sen. Maria Cantwell (D-WA) and Susan Collins (R-ME).

      Sens. Maria Cantwell (D-Wash.) and Susan Collins (R-Maine) had requested the GAO examination of climate change preparedness. Collins is among the renegade Republicans vocal in their disappointment of the administration’s climate policy. She voted against the confirmation of EPA chief Scott Pruitt and reprimanded the administration for bailing on the Paris agreement to combat climate change.

      http://www.latimes.com/politics/la-na-pol-climate-gao-20171024-story.html

      Cantwell’s response was almost as idiotic as the GAO report:

      “My colleagues no longer have to take it from me—the Government Accountability Office tells us climate change will cost taxpayers more than a half a trillion dollars this decade, and trillions more in the future unless we mitigate the impacts.” said Senator Cantwell.

      https://www.energy.senate.gov/public/index.cfm/democratic-news?ID=36E835AB-6BE1-44DE-A5A3-C1178ECBF6EB

    • CA never actually deregulated.
      They scrapped the existing regulations and replaced it with a scheme that was much more complicated.

      • MarkW

        Deregulation allowed independent power producers (IPP) to compete with existing power companies.

        The purpose was to encourage invest in needed generation.

        The company I worked at the time, Duke Energy, was Duke Power when I started with them. With deregulation, Duke could buy or build power outside of their regulated territory as could other companies.

        Texas was one of the places where Duke built power plants. Texas got the capacity it needed.

        Duke also bought power plants in California with the intent of modernizing the power plants. For example, Duke bought Moss Land to upgrade from a 1000 MWe SCGT to 2000 MWe CCGT using the same amount of natural gas.

        It took 3 years to get the permits.

  11. There IS no “cost” from “bad weather” that is actually attributable to “climate change” at all, that is nothing but pure propaganda. And as I like to say, if we are going to “blame” “Climate Change” for the current Atlantic storms just experienced, then we must ALSO “credit” “Climate Change” for the LONGEST PERIOD ON RECORD without a major hurricane hitting the U.S. mainland. They can’t have it both ways.

    History and logic also indicate that the most violent WEATHER occurs during COLD climate states, NOT warm ones, due to the greater temperature differential between the equator and the poles. The essential entirety of the (supposedly) upward “trend” in temperatures being higher NIGHT TIME LOWS, NOT daytime highs, underlines this. Reduced day vs. night temperature differentials ALSO mean less turbulent weather, not more. Only in the AGW fantasy world does a “warmer” world mean more violent weather.

    Why do you think the warmest period in the current epoch was called the “Holocene Climate OPTIMUM?!” Because the weather was so awful?! LMAO

    • Exactly right….and meteorology 101.

      Lower number of violent tornadoes.

      Trillions in agricultural productivity.

      The atmosphere can hold something like 4% more moisture at 1 deg C warmer so heavy rains have increased. However, that number typed in the line above is 4%………not 400%……..not 40% but 4%.

      The planet has greened up and crop yields/world food production has increased by a number that is multiple times 4%, just from the increase in CO2. In addition, the last 40 years have featured the best weather/climate for most of life since the Medeival Warm Period, 1,000 years ago…….the last it was this warm.

      Dial in the boost from beneficial CO2 and it hasn’t been this good for most life since…….humans walked the earth?

      • As I read elsewhere today:

        “Science has value as a TOOL. But it is still simply a tool to understand Universal Law. It does not CREATE the truth. It merely seeks to DISCOVER it. By its very nature, science has and always will be LIMITED. Gravity existed before we understood it. The atom existed before we were aware. More powerful than test tubes and blood samples in our search for truth are our cognitive abilities of logic and reason.”

    • “They can’t have it both ways.”

      ‘They’ can always have both ways. You and I not so much.

      This concept applies to things like casual overtime. When mangers discuss the subject, I volunteer to home after the meeting to catch up on casual under time.

      Training new mangers about having it both ways is fun. It would appear to some that I came and went as I pleased. I can read a schedule. I may have work due on Friday but if a manger has work from 20 due on Friday, I am going to waste a lot time standing line unless I get it done early in the week.

      The first part of the week, I am at home working. My lap top has a program to answer my work phone. My work is ready for the manger’s two days early.

      Then I get a new manager. The supervisor in charge of 10 engineers who need no supervision comes by a tells me the the new managers want me to be at desk at the prescribed times. Fine I say but do not come to me on Friday with emerging work due on Monday. If managers do not like me getting work done early, I can get it done late on Friday. The manager will have to stay late but he will know I am at my desk working hard.

  12. Socialist Democrat Senator Maria Cantwell requested this ‘report’.
    Surprise! The ‘imprecise’ and fudgy-as-you-can-get analyses support the socialist CAGW agenda!

  13. ‘The extreme weather events of the past decade that scientists believe were exacerbated by climate change’

    Yet, the percent of ‘exacerbation’, doesn’t seem to be taken away from the total.
    So, this is a study describing the cost of weather.

    • Exactly! The forward cost of mitigating ‘estimated’ weather, because we are afraid of trace amounts of essential CO2 plant food in our atmosphere…..

  14. Now who would have guessed that modeling would “produce imprecise results?” It is as shocking as Bogart’s character Rick, in Casablanca, discovering that there is gambling going on in his café. There is a similarity.

    • Clyde Spencer … ‘produce imprecise results’ …

      And, the imprecision gets compounded!

      [ from the article ]
      ” they use different types of complicated climate and economic models that are linked together in a sequential framework that uses the results of one model as input to another…”

      • But the U.S. EPA and other governmental agencies use this insanity to write regulations adversely impacting everybody in the country.

    • You can recognize political BS from the obvious signs – RCP 8.5, high end sensitivity, projected massive CAGW destruction, no gains, mssing interest rate – I wonder do these people realize why they are being laughed at? They mention uncertainty only to say it could be worse, even there is no evidence just some advocate pushing aggressive pro-mitigation scenario.

      It is so obvious, yet we have to take it daily from the MSM which applies no critical thinking what so ever.

  15. Who asked the question:

    “The Honorable Maria Cantwell Ranking Member Committee on Energy and Natural Resources United States Senate The Honorable Susan Collins United States Senate”

    So not bipartisan!

    What was the question: “You asked us to review the potential economic effects of climate change impacts and resulting risks to the federal government. ”

    While ignoring any benefits or costs of reducing ghg!

    So not worth reading.

  16. Anybody else notice a pattern here?

    In addition to the pattern of content, there is a pattern of style. In particular the portion of the text you quote appears to be a collage of cut and paste phrases. (Compare opening sentences of paragraphs 2-4, for starters.) Hard to believe it was really proofread, when you read constructions like this:

    …methods used to estimate the potential economic effects of climate change in the United States, and the national-scale methods that use the methods, produce imprecise….

    All of which suggests this is a ‘boilerplate’ report, written to meet an outside demand, with no great interest in the subject on the part of the writers.

  17. The first paragraph of the report includes: “The methods and the studies that use them produce imprecise results because of modeling and other limitations…”

    They should have stopped there.

  18. Suggested correction:

    If we accept that climate change is currently costing us $35 billion per year ($350 billion over past decade) and accept the GAO’s estimate of future costs:

    From the coverage – as bad as it is; it suggests that “extreme weather events of the past decade,” cost $350 billion – and that [perhaps] climate change [assuming they mean man-made] might have “exacerbated ” those costs. And, that by 2015 this additional imprint of CACC could end up adding $12 – $35 bil/yr additional costs.

    Needs to be reworked, David. Was bad enough as the LAT’s, AP, presented it.

    One might wonder – perhaps it;s in the ridiculous study, are they even coming close to putting a CACC contribution to the $350 bil, over the past decade? In other words, is perhaps, in their little exploding heads, $1, or $2, or $10 billion of the $350 billion the man-made part?

    PS – for fun.. I posted a comment at the LAT’s suggesting that perhaps some readers (did not mean David Middleton) would walk away telling others that man-made climate change cost taxpayers $350 bil over the last decade.

  19. Firstly… Is it my imagination? Or does the CNN “reporter” appear to be about 12 years old?

    No, I had the exact same thought. I didn’t want to express it because it’s an ad hom, but you had the exact thought even to the exact age, so I am.

    Am I just getting old, maybe? Those darned coppers are getting younger every year too…

    • It would only be an ad hominem argument if I was using his apparent age as an argument against the GAO’s idiocy.

    • Many high schools have work experience programs so that the kids can find out what it’s actually like to (e.g.) work in a hospital.
      I had knee surgery some years ago, and I had to go back for check-ups several times. The last time I went, one of the kids on work experience, a girl of about 16, came in, and started asking me a few questions.
      I was thinking “Bright kid. She’s picked some of the jargon”, when I saw the name tag on her white coat. It said “Dr. F. MacKenzie”.

      Then I knew I was not quite a young man any more.

  20. So after we’ve spent 161 trillion, then Puerto Rico can be happy they will only be totally trashed by a couple of 2017 type mega hurricanes or, horrors, 1950s grade, in 2099 and we will have to shell out the same cash inflated by 80yrs anyway. I make that 322trillion.

    We learned in an article here the other day by Pat Frank that a y=mx+b linear formula matched the models from Hansen’s to Gavin Schmidt and all the other 100 efforts. And then there is physics instead of grade 9 algebra apparently, although I’ve only heard about the physics in words.

    Shame, shame. If we let these clones get away what they are doing to learning and science, by 2099 they’ll be handing out PhDs for learning your 12 times table. I thought Steve McIntyre was being sardonic when, after criticizing the stats and science in climate papers, he said:

    “In my opinion, most climate scientists on the Team would have been high school teachers in an earlier generation – if they were lucky. Many/most of them have degrees from minor universities. It’s much easier to picture people like Briffa or Jones as high school teachers than as Oxford dons of a generation ago. Or as minor officials in a municipal government.

    Allusions to famous past amateurs over-inflates the rather small accomplishments of present critics, including myself. A better perspective is the complete mediocrity of the Team makes their work vulnerable to examination by the merely competent.”

    https://wattsupwiththat.com/2013/08/04/quote-of-the-week-high-school-climate-science/

  21. from the LA times: “, a huge drain on the budget as funds were diverted to cover more disaster relief, crop and flood insurance, firefighting costs, and infrastructure and public lands repairs”

    So they are concerned that there is redistribution of assets taken from their redistribution of wealth program that they intended to go to government handouts that buy votes.

  22. insufficient analysis.
    1) There always was, and there alway will be, extreme event, event if we completly decarbonize.
    The 350 B$ have just nothing to do with climate change, since they are not more frequent or stronger than before. They indeed do more damage, but only because properties are more numerous and have higher value in the hit areas. This will keep going on and on, climate change or not.
    2) you have take into account the benefits of higher temperature and CO2 level, including greening and preventing a new LIA. A new LIA, that just cannot be ruled out, would have tremendous human and financial cost, far more than any compilation of extreme event (that will occur nonetheless !). It must be prevented at all cost, even the supposed cost of Global warming (much lower in any hypotheses).
    Climate Pascal’s Wager is easy: If we could (and IPCC says we can, although i don’t believe it), we should prevent a new LIA at all cost, and if warming occurs and even have huge costs, so be it, this is a fair price to prevent a new LIA.

    • What’s hysterical, paqyfelyc, is that we actually had the LIA! We know it could happen again; we don’t have to speculate.

      The Precautionary Principle is ripe for that scenario.

  23. The US government has spent more than $350 billion over the past decade in response to extreme weather and fire events, and the Government Accountability Office report estimated the US would incur far higher costs as the years progress if global emission rates don’t go down.

    Hmmmm….if adjusted for inflation, population growth, etc., just how does that $350 billion compare to the previous one or two decades? Decades before that?
    “The US government has spent …”
    In the past, the Feds were less likely to open “the flood gates of tax dollars”.
    (How many Fed dollars, adjusted for inflation, went into rebuilding Galveston?)
    Lot’s of variables.
    How many did the kid enter into his figures?

  24. “H/T to ivankinsman for bringing this to my attention.”

    I think Ivan didn’t read the report properly or didn’t understand it when it was linked to in the other thread.

  25. Was it defined if these weather & fire events were ‘naturally’ caused? Lots of arson out there. I distinctly remember the Hayman Fire in Colorado.

    Biggest recorded fire. Arson by a government employee. Ha!

    Man still remember driving down 6th Ave (east Denver metro) heading West, kept getting darker and red/orange then @#$&# I can’t see passed my hood. Whelp, U-Turn.

  26. Investing the calculated amount, or any other amount, to have a fund for future government emergency expenses is pure fantasy. Politicians ALWAYS spend every cent NOW. If any such foolish fund should be established, say from a new wage tax, corporate tax, slave tax, or whatever, all that would exist on that future date would be an accounting entry. Like social security, government pensions, and various other entitlement programs, actual expenditures at any future time could only be made from then current receipts. Nothing else but a number in a ledger would exist. There has been no money for a long time, there is only debt.

  27. They got the headline. Most people won’t read any further than the first few paragraphs. Object achieved!

    There are some limp qualifiers further down, so a retraction won’t be necessary even if the inaccuracies are challenged. All in all, a first-class piece of modern journalism.

  28. Why are there only “costs” associated with climate change? We all know from history that global warming is always healthier and more productive for humans than global cooling.

    More warming means longer growing seasons, more extensive greening of desert areas (already visible in Saharan Africa), less starvation, less disease, longer lifespan, less ice and snow (that kills people), etc. etc.

    Why are these studies always so one-sided?

    Oh, yeah, I get it, the warmists don’t want us to know that their greatest fear is not warming but that we’ll figure out that they’ve been BSing us for decades about the net effects of warming.

  29. Looking through the GAO report. I don’t see any reference noting that all climate change is not man-made. Seems to be the assumption that, for example, that all sea level rise is, and has been, caused by man. Thus if we can reduce our CO2 emissions to pre-1970’s levels, sea level rise will be stopped and hurricanes, droughts and forest fires will be no more.

    No need America to plan for extreme weather events and continuing SLR – no infrastructure needed; simply stop driving and the risk will go away.

  30. Dave,

    Thank you for this The discount rate of 7% is as you say typical. The use of 3% has been advanced by some as appropriate for policies that affect all of society, as opposed to rate based on market returns. No discount rate is merely a dodge to avoid doing real cost benefit analysis.

    • The problem with a 3% discount rate, is that the government is taking money from the private sector now to pay for crap in the future. A 7% discount rate reflects the cost of the capital to the private sector. A 3% discount rate barely reflects long-term Treasury notes.

  31. You pose an interesting question of whether the costs of decarbonization exceed the costs of climate change damage. I think you do have a valid criticism of those sources you cited that only talked about the costs of one thing without comparing them to the costs of the alternative.

    However, I do have two problems with your analysis.

    If I’m reading things correctly, the $35B/yr is only the government money spent for disaster relief. It doesn’t include any private losses (either covered by insurance, which ultimately gets tacked on to premiums, or uninsured losses in excess of what they get from the government in disaster relief.) And there could be other economic costs of climate change beyond natural disasters, like maybe crop fertility is reduced. It may be hard to accurately count those up, but it’s not valid to ignore them.

    The second problem is that there’s a fairness issue with this kind of externality. A bunch of people emit carbon, and then a few people have their homes destroyed by hurricanes. Or if you apply a discount rate across generations, then you are deciding whether you should spend money now based on how much money it’s going to save someone else 50 years from now. Unless you also include some scheme for the deciders/creators of the externality to fairly compensate the sufferers of the externality then it’s not just a matter of which is going to cost less in the aggregate, you also have a problem of is it fair to allow people to create costs for others? Maybe for fairness we should prevent the externality even if it’s net present value is zero.

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