GLOBAL ECONOMIC CONFLICT: A NOBEL-WINNING ALTERNATIVE TO THE PARIS CLIMATE AGREEMENT?

By Patrick J. Michaels

Senior Fellow, Competitive Enterprise Institute

Every December brings the holiday season back into our lives, along with the lights, the decorations, and time with family and friends. December is also when the United Nations holds an annual “Conference of the Parties” (COP) to its 1992 climate change treaty. This year’s 12-day event is already underway in Madrid, but don’t expect much in the way of results.  

The outcome of previous COPs has not been stellar. In 1997, COP-5 gave us the Kyoto Protocol to the climate treaty, in which developed nations agreed to reduce their emissions of dreaded carbon dioxide. Some large and growing emitters like China and India were not included; China became the world’s largest emitter less than a decade later. Kyoto didn’t do a darn thing to affect the climate and was a failure, according to the winner of the 2018 Nobel Prize in Economics, William Nordhaus of Yale University.

This year, COP-25 is focused on implementation of the Paris Climate Treaty, which Nordhaus noted would not get close to its stated goals, and that its unenforceability renders it useless. Drafted in 2015, the stated goal of the Paris treaty was to hold warming since the Industrial Revolution under 2.0⁰C, with a further aspiration to keep it below 1.5⁰C.

It is easy to demonstrate that if every nation lived up to its current voluntary “contribution,” Earth’s surface temperature would be only a few tenths of a degree lower than it would be in 2100 if we just continued emissions-as-usual.  The effects of Paris are too small to reliably measure. In his Nobel acceptance speech, Nordhaus noted that Paris would not get close to its stated goals, and that its unenforceability renders it useless.

Nordhaus knows from whence he speaks. He was awarded the Nobel for his model that calculates the so-called social cost of carbon [dioxide], along with the effects of emission reduction policies.  In his actual acceptance speech he sheepishly pointed out his model showed the “break even” level of warming (where overall costs begin to exceed the benefits of slight warming coupled to economic growth) is 4⁰C. 

Despite his model’s objective guidance, Nordhaus ultimately agreed that something serious needs to be done about warming. Now. Never mind the fact that life expectancy doubled in the developed world as it warmed one degree, while in nations like the U.S., per capita wealth increased over eleven fold. It is simply ludicrous to believe that warming a mere half-degree more will reverse all the progress of the last century. This is the position of alarmists like Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Bernie Sanders (D-VT).

Nordhaus proposes an alternative solution to Paris and the COPs that is truly scary in its scope, intent, and potential harm.  

The 2018 Nobel Laureate in Economics is proposing that an (unspecified) group of nations form a “club” that sets what he calls “harmonized emission reductions” (whatever that means) and that club members who do not meet these reductions will be penalized. The reductions are determined by agreeing to set a minimum price to emit a ton of carbon dioxide.  Where this money goes isn’t said, but who it comes from (you and me) is obvious. 

What is so scary?  After all, the penalties only apply to members of the “club,” right?

Wrong.  Nordhaus proposes that club members then penalize—globally—the non-members.  Here’s the core of his thinking, in his written remarks:

A key component of the club mechanism…is that nonparticipants are penalized…[T]he simplest and most effective would be uniform percentage tariffs on the imports of nonparticipants into the club region. With penalty tariffs on nonparticipants, the climate club creates a strategic situation in which countries acting in their self-interest will choose to enter the club and undertake ambitious emissions reductions because of the structure of the incentives. 

This will play well in sub-Saharan Africa, won’t it?  It contains 13% of the world’s population, but nearly half of the total number of people without any electricity. McKinsey, a major energy consultancy, predicts electricity consumption there will increase fourfold from 2010 to 2040, with natural gas providing 40% of the power. The “renewable” share isn’t projected to change very much, a mere four percent over thirty years. 

How could these nations join Nordhaus’ emissions reduction club? Doing so would consign them to the group of penalized countries.

It’s ironic that a Nobel Prize winner in economics glibly proposes what could become a global economic conflict because the UN can’t get its act together. History is largely a story of the carnage that ensues when empires attempt to punitively control the world. All of this is world gone mad over an additional half-degree of warming, and a world gone mad over something that Nordhaus’ own Nobel Prize-winning model says will be a net benefit.

Patrick J. Michaels is a senior fellow at the Competitive Enterprise Institute and author of “Scientocracy: The Tangled Web of Public Science and Public Policy” (Cato Books, 2019).

Advertisements

67 thoughts on “GLOBAL ECONOMIC CONFLICT: A NOBEL-WINNING ALTERNATIVE TO THE PARIS CLIMATE AGREEMENT?

  1. Our Carbon Capture Utilization System turns CO2 into good paying full time jobs and money.
    Coal fired power plants can operate and put into the atmosphere less CO2 than a new natural gas fired power plant.
    America needs to get wise with it’s use of energy. Coal needs to be used to create electricity. Natural gas needs to be used for building space heating and by industry to produce all those products we use every day.
    Oil is for transportation and to produce all those products that need oil.
    The renewables (solar & wind) need to be on it’s own grid network and be used to supply electricity to the growing EV market. When the sun goes down and the wind stops blowing and the batteries run out of juice, it’s time to park and call it a day.

    • Carbon Capture Utilization System turns

      … a sizeable amount of fuel into waste to power the capture process load that increases the overall amount of fuel needed to maintain the same power output, at an unnecessary cost in wasted fuel.

      CCS is make-work – a climate activist dream come true but in reality a high price for no climate gain.

    • Carbon capture? I don’t see how you can promote that after reading the article. It makes it very clear that CC is not needed. Doesn’t it?

    • When do Sid’s comments pass the line of a blatant sales pitch?

      I enjoy the give and take on this site, including the comments of folks with whom I disagree and sometimes feel are expressing opinions just to be ornery. But this is thinly veiled advertising.

      Our Carbon Capture Utilization System” makes it clear this is pure self promotion.

      Now get off my lawn!

    • There is no economics to Carbon Capture – unless you use CO2 for enhanced oil production. Even then, oil must be well above its current price for CC to be economic.

    • “Sid Abma December 13, 2019 at 11:39 am”

      Trees, biomass, plants, food plants…its taken care of.

    • Why? We need to get to at least 800ppm.

      The economic model of cheap energy for everyone and a slightly warmer, moist, green earth with plentiful food should be worth at least ribbon from a county fair, if not a Noble prize.

  2. ‘All of this is world gone mad over an additional half-degree of warming, and a world gone mad over something that Nordhaus’ own Nobel Prize-winning model says will be a net benefit.’

    Kinda makes you think that was never the real agenda, doesn’t it?

    • It might not be an agenda but groupthink. Climate science is a new attempt at using models to predict the global average temperature many years in advance.

      • They might have given it to the inventor of the boomerang hand grenade, but then no one heard from him again.

        • Actually, a war boomerang, which usually isn’t carved to come back, can be thrown much further and more accurately, so a grenade in it could be useful. Of course modern technology has done it one better with the Rocket Propelled Grenade, complete with onboard guidance from the launcher.

  3. The lack of integrity of the left who once championed the needs of the poor in Africa and Central America and are now glibly throwing them to the wolves has never been more evident.

    • ‘And the morals that they worship will be gone’

      Watching that happen in my lifetime is a personal tragedy.

      • Senegal has been dependent on imported oil to fire its generation for ages. I think that coal fired plant was really small and old. Anyone confirm that?

        When I worked there the oil supply was very difficult and power generation uncertain.

        There isn’t nearly enough hydro power available so they will be restricted to oil, gas and some form of solar indefinitely until small nukes are available.

        Cooking relies on imported LPG and (mostly) charcoal from the far SE.

    • Yes, championing the poor in Africa at the same time that they were trying to exterminate them through malaria. How do you tell when a liberal is lying? Their mouth is moving.

      • THAT is the question! I propose a carbon budget of 3 for all the attendees – if the budget is exceeded either going or coming they have to walk home! Doesn’t matter if home is across an ocean they still half to walk!

  4. This is the sole problem for the u.n..

    “Never mind the fact that life expectancy doubled in the developed world as it warmed one degree, while in nations like the U.S., per capita wealth increased over eleven fold”

    HUH 😐

    Nordhaus proposes that club members then penalize—globally—the non-members.

    • That was my point–but I softened it for Fox, which declined the article. Thanks for picking up on it!

  5. you missed the obvious pun, in paragraph beginning “A key component of the club mechanism…is that nonparticipants are penalized…” should be changed to “A key component of the club mechanism…is the CLUB…” applied liberally about the head and brows. 🙂

    • another article on this did mention they felt they had the right to use military force on nations that didnt comply
      so yes the CLUB part is very very correct
      dissolving the UN would be wise .
      surely america can close the building they use down?
      if they wanna keep it up they can go HQ in EU or elsewhere
      and Trump should pull their funding entirely.

      • Restrict the UN building in NYC to energy generated by renewable sources say solar panels on its roof, cut off their electricity for lighting and natural gas for heat and cooling from public utilities, require it to get their water supply from the Hudson River or the East River. Provide them with filtration devices, fans, and sweaters of course.

  6. I’ll bet that 1/2 degree of warming will do a whole lot to melt the Continent of Antarctica were the average DAILY TEMPERATURE is 59 degrees BELOW ZERO! Only people who are too stupid to look up that fact believe in this nonsense.

  7. Taxes cloaked in various forms of do-gooder illusions. We’re all being taxed now. All supposedly renewable fuels are subsidized by taxpayers. Taxes are imbedded into cost of energy everyone pays. Not enough yet to cause much of a fuss. Corporations spouting the AGW rhetoric to keep the NPOs and NGOs at bay, contribute to the cause and imbed the tax into COGS. Trickles noticed a little, like an itch but not yet a sore. When the time comes that they feel empowered to go full scale, I think the itch will become more objectionable. Note the public reaction to small increases in fuel taxes when openly forced upon the great unwashed. And this rebellion happened in France of all places. Nous Verrons…

  8. When your religious zeal overpowers your ability to reason, you get this kind of proposal; otherwise known as lunacy.

  9. Hmmm; maybe we would end up with 2 blocks. One the “club” members who trade with each other without tariffs but impose crippling tariffs on non club members, the other the “non club” members who trade with each other without tariffs but in retaliation probably impose similar crippling tariffs on the club members. So the critical question is; which group would be better off, would the non club group need the club group more or less than vice versa? In the end, one group would “win” and the other “lose. What would happen if a country from one group decides to change sides especially if going from the “club” side to the “non club” side? Given the expressed attitudes of the club side which sounds to me awfully like totalitarian socialism, it feels like we could call the club socialists and the non club capitalists. I think it is inevitable that the two groups will find much more to disagree about than just carbon pricing. History has something to say about the outcome of such a scenario (America vs Russia and the cold war anyone?)

    Also remember at at least as far as the club is concerned, the actions of non club members are seen as having a major bearing on their lifestyle. Every reversal within the club will be attributed to actions of the non club, breeding hatred and clan thinking. Just consider the rhetoric over the NSW bushfires blaming them on global warming not lack of fuel reduction measures.

    This sounds to me very much indeed like a formula for world war 3.

    • It seems to me to be a formula for economic destruction of the middle class in the Club, followed by a tyrannical Police State to maintain the crushing carbon tax. The police state may look to foment a foreign war to distract the People, but they’d lose their ass to the non-Club nations due to disparity of economic strength and population.

  10. This could be a viable plan. A combination of first-world privilege and affirmative discrimination as it is deemed politically congruent.

  11. The EU tried to form a “club” or cartel, to impose their fading influence on a world which had rejected their 19th century empires. Look how it worked out for them.

    • The EU is still intending to expand and to increase its political centralisation and defence capabilities. I’m sure it works very well for those who like that sort of thing but I voted leave!

    • As of Friday 13th 2019, the 3rd, successful voting attempt to separate from the EU, the EU will be on a death spiral. Germany, France, front up and support the spawn of your “union”, the UK wants nothing of it anymore!

      Ciao bella!

  12. The less oil, coal and gas are used; that is, the more these fuels are banned, the cheaper their price will get, making them more attractive to ‘rogue’ countries who in turn will be more attractive for investors due to the cheap energy required for their operations, especially manufacturing firms. This will in turn hurt the ‘good’ countries badly by losing most of their manufacturing jobs to the rogue countries. But wait a minute, this has already happened, that rogue country is China and the losers are the USA and Europe. That’s why Trump and Brexit.

    • But wouldn’t it be better to make all countries first world countries? In all first world countries population numbers would have gone down were it not for immigration.

  13. Since tariffs are economically indistinguishable from a tax on your own country’s consumers, I’m not seeing how Nordhaus’ proposal really penalizes the non-participants.

    • Remember the “Six Phases of a Project”? In my original submission, which was much longer, I likened Nordhaus’ proposal to that process:

      1. Enthusiasm
      2. Disillusionment
      3. Panic
      4. Search for the Guilty
      5. Punishment of the Innocent
      6. Praise and Honors for the Nonparticipants

      • Clearly you have not worked on a “project” in Australia. I recognise only point 5., as being a recipient.

    • A tariff is mostly a voluntary tax at the end of the day, in that a consumer/company can decide not to buy a product made in China for example, but buy the same or similar product from Vietnam or Malaysia where there is no tariff. That is the point of Trump putting tariff’s on Chinese goods, which is to penalize China for its nefarious behaviour in how it stole much of USA/West technology and/or how it behaves in the global order. It may take some time to shift the manufacturing base to countries other than China, but it is happening at a furious pace as evidenced by China’s declining economy. Yes, some consumers are going to pay the tariff here to the treasury which is effectively a tax in the short term, but within a few years much of that manufacturing base will have left China for pastures that do not rile the USA or the global order that has been established since the last world war.

      This is similar to relations with Japan, circa mid 1930’s when when we tariffed them and finally embargoed their oil supplies. That was because of their behaviour in China and SE Asia which the USA/Britain challenged and led to the Pacific War in WW2 where we had to clobber Japan into the stone age. Things are aligning much the same with China under President Xi, and in my opinion, under Xi, war is 100% unavoidable given everything they have done and are doing, including all the South China Sea issues and theft of other nations EEZ. And not to mention the minor problem with North Korea which China is is the ultimate proxy and must be dealt with fairly soon. President Trump has gone beyond the call of duty in trying to engage NK to join modernity, to no avail. And not for lack of trying. It actually was a noble attempt, but China isn’t really cooperating.

      The sooner we crush President Xi and Red China economically, the better off and safer the world will be. The best way to do that is exactly like President Trump is doing, is to massively penalize their economy hoping to change their behaviour so as to avoid any war. But the people in China have no recourse to change their Gov’ts behaviour. And we have no tools short of destroying their economy so as to force President Xi and the evil fascists from power. This phase 1 agreement is just a temporary reset to see how far either party wants to proceed down the path to ruin. And it won’t be the USA ruined, but it will be the Communist Party of China, and unfortunately their hard working citizens that suffer under the cloak of totalitarianism. A similar type of totalitarianism is trying to be imposed here, under the cloak of climate change and all that nonsense. We must be very vigilant in allowing this type of behaviour, either globally such as with China, or with the climate emergency masquerading also as another form of totalitarianism.

  14. Nordhaus’ little proposal runs into one big problem. International corporations.

    Beyond that “little” problem, another more obvious problem is the “offshoring of emissions.”

    Let’s say the Club Countries impose carbon tariffs. Prices go up for the consumers in those countries for everything starting with electricity and liquid fuels. (Ignore the fact for a mment that mass “Yellow Vest” protests would take off by the populace. The Club better have good riot control. ) And it is not just offshoring of manufactured goods. Domestic costs for agriculture goes up. More incentive to move agriculture production overseas to cheaper areas. The companies then start moving energy intensive production for everything overseas. Imports go up.
    Now the double whammy. Because those imported goods were made in a carbon low cost country, predatory import duties are slapped on them. Then prices go up further for the Club countries’ consumers. They can’t produce their own domestically without getting slammed with high energy costs. They can’t buy from abroad because of high import duties. Only the very wealthy escape the economic misery that follows if the People allow this to continue. As noted earlier, the government bteer have good riot control and be prepared to impose totalitarian police-state methods on it people.

    Does anyone else see how that would turn out for a government that tried this?

  15. PJM, “It is easy to demonstrate that if every nation lived up to its current voluntary “contribution,” Earth’s surface temperature would be only a few tenths of a degree lower than it would be in 2100 if we just continued emissions-as-usual.

    It’s no such thing. One cannot demonstrate anything with climate models, except what the climate models produce. There’s a centrally-important whoop-de-do for you.

    Sorry to say, Pat Michaels (and Chip Knappenberger) still believe that climate models have some predictive capacity. So, we get misguided comments like the above, agreeing that CO2 emissions will produce detectable warming.

    Well, they haven’t done, and there’s no evidence they will.

    A central part of the AGW problem is that even skeptical climate scientists are evidently untrained in error analysis. They don’t know how to evaluate their own models. So, they publicly credit the validity of models that lower limits of resolution hundreds of times larger than any possible thermal effect of CO2 emissions. That public credit empowers the eco-Yahoos to push for the destruction of industrial prosperity. The incompetent feeding the malignant.

    Then we have this, “Despite [Nordhaus’] model’s objective guidance, …” Objective guidance from a model based on fake premises working from the output of models operating on fake premises? You’re touting objective guidance from subjectivism-squared.

    You’re out of your ever-loving mind, PJM.

    Honestly, your support of the models makes you as responsible as anyone for the pseudo-scientific outrage that is AGW consensus climatology.

    • Pat,

      You remind me of a common story told to me by a g/f who worked in an Emergency Room:

      “Mr. Jones, it appears you have been shot. How did this happen?”

      “My friend shot me”.

      • Pat Michaels, I have no idea what your comment means.

        I remain bemused by your confidence in climate models, and in economic models driven by climate models.

  16. The US the retaliates placing all countries in the club on it’s sanctions list denying them access to financial markets 🙂

    See what happened when US put sanctions on Iran and other countries notably in Europe didn’t want to follow.

    This idea is a non starter and there aren’t any countries stupid enough to try that save Venezeula and the like.

  17. In the third world, what Nordhaus proposes is called “neocolonialis”. There will be fireworks, or outright war, if the Paris/Cop group try it.

    • But of course voters in each member state of the club would need to vote to create such a club. Which is why the green scum want authoritarianism as they know we’re never going to vote for it (see the EU Commission).

  18. Why would one bother spending money to ‘capture’ when it’s beneficial?

    Global vandals without a cause.

  19. “Here’s the core of his thinking, in his written remarks:”

    Perhaps someone should set the remarks in a blockquote, or in some way set them apart from the normal text. There’s no visual difference as is stands.

  20. The best thing that humans have every done for the planet was to rescue life from the CO2 deficiency in the atmosphere.

    Massive benefits would continue up to levels that are impossible to reach.

    We are having a climate optima, not a crisis. Best weather/climate in at least the last 1,000 years. 50 years ago, had you asked a scientist if life on this planet would do best if the global temperature cooled by 1 Deg. C, stayed the same or warmed by another 1 Deg. C, 97% of them would likely have picked warmer. Probably most viewing warmer by 2+ Deg. C being even better.
    Now we hear the false narratives about 97% of scientists having the opposite view.

    What changed? Science didn’t change……….nobody abolished the law of photosynthesis. Animals still migrate south and hibernate to survive the harsh cold in Winter in the high/mid latitudes. Plants still go dormant and some die because of the cold.

    Every scientific field considers CO2 as a beneficial gas. Agronomy, plant science, biology, zoology, authentic climate science….etc

    Only in politics is CO2 categorized as pollution. That’s the only field that has changed in the last 50 years with regards to how humans view CO2.

    • I agree with you 100% Mike .
      I have looked at this global warming /climate change for many years since it was first touted at the first climate summit held in Villach in Austria in 1985 .
      At that time the green house effect was being talked about but there was no proof that CO2 could raise the worlds temperature by very much .
      We are now approaching 35 years since then and there is still no proof that the doubling of CO2 will raise the earths temperature by very much .
      There is no proof that the .3 or .4 degree Celsius that the world has warmed from 1979 is not natural climate variation and there is certainly no proof that it has been caused by CO2.
      Everything is now blamed on climate change and there is no proof but people want to wreck the worlds energy systems and our modern industrial economies because of an unproven theory .
      Climate change has been hijacked by politicians to advance their agendas and most policies will end in disaster and poverty .
      A great number of politicians are driven by ideology and have no idea how the modern world works and if for any reason fuel or electricity stops the whole economy will grind to a halt .
      Take one example from our New Zealand Government .
      They declared that no new offshore oil and gas exploration licenses will be issued .
      How shortsighted is this ?
      Private and public transport rely s on fuel and for a country that rely’s on exporting to generate funds for all products that we need from overseas the country can not be starved of fuel or energy .
      This will start to bite when our gas fields start to slow down and the oil and gas has to come from somewhere else.
      Maybe some common sense will take hold and people will realize that that they are being thrown under the rampant bus of climate change to make some politicians feel good because they believe that they are saving the world.

    • Hey, you left out the dinosaurs. They had a lot to do with upgrading the CO2 balance, y’know. Give the thunderlizards some credit, willya?

  21. “The COP conference in numbers:
    This 24th COP will be hosting over 28,000 people. The figure includes: close to 13,000 people with the parties to the UNFCCC gathering to negotiate the Paris Agreement work programme, some 450 UN staff, over 7,000 observers from non-governmental organisations, and 1,500 media representatives. Dec 2, 2018”

    So many slurping at the trough. I could not find figures for 2019

    Bureaucracy is an industry in Europe. I looked up numbers for the EU monstrosity. I was shocked:

    “Around 32 000 people are employed by the European Commission. In the European Parliament, around 7 500 people work in the general secretariat and in the political groups. They are joined by Members of Parliament and their staff. In the Council of the European Union, around 3 500 people work in the general secretariat. May 6, 2019”

    Now why would the Brits want to leave that? (well done, you socked it to them). Climate change is not the greatest threat to humanity, it is left wing bureaucracy and the intellectual elite. I find their ignorance, arrogance and attitudes – and support by media – very concerning.

    There is nothing more dangerous than a privileged wealthy left-winger. Their views are based entirely on ideology based around how others should think, speak and act.

    M

  22. The EU was an experiment, to try to be the “United States” of Europe. Sadly, without a common language, as a basic need, it was doomed to fail, and is doing so. Open borders, and “common” passports, fail! A common currency was the next “fix”, and failed. Thank the UK for preserving sterling.

  23. “…the Paris Climate Treaty, which Nordhaus noted would not get close to its stated goals, and that its unenforceability renders it useless. ”

    Well, nuts!!!!! (Lots of loud unhappy noises from my corner.) I’m tired of winter already and we still have to put up with it??? /s

    Why do none of these over-educated, grant-grabbing mopes ever account for the pollution controls and other “clean up the environment” stuff that have already been addressed and done? Why? Just how lazy are they, brain-wise?

Comments are closed.