This recent study (h/t to Jim Simpson) comes from Australia and was published in late 2019. It studies the impacts of global warming on the U.S. economy. What the authors have done is used one the climate models (the FUND model) to look ahead at the impacts warming would have on other economic sectors besides energy. Now that the “worst-case scenario” RCP8.5 model has been put out of favor by a recent paper, the 3.0°C warming scenario they used is more in-line with the RCP6 and RCP 4.5 models that remain. The work replicates and improves upon earlier work done by Dr. Richard Tol in 2009 in The Economic Effects of Climate Change.
What they found is surprising; the overall economic impact of 3.0°C global warming would be beneficial nor just for the United States, but the entire global economy.
They write in the introduction:
There is a scientific hypothesis and political acceptance that global warming of 2 °C or more above pre-industrial times would have a negative impact on global economic growth. This hypothesis is supported by economic models that rely on impact functions and many assumptions. However, the data needed to calibrate the impact functions is sparse, and the uncertainties in the modelling results are large. The negative overall impact projected by at least one of the main models, Climate Framework for Uncertainty, Negotiation and Distribution (FUND), is mostly due to one impact sector – energy consumption. However, the projected negative impact seems to be at odds with empirical data. If this paper’s findings from the empirical energy consumption data are correct, and if the impact functions for the non-energy sectors are correct, then the overall economic impact of global warming would be beneficial. If true, the implications for climate policy are substantial.
From the conclusion of the paper:
This study tests the validity of the FUND energy impact functions by comparing the projections against empirical space heating and space cooling energy data and temperature data for the USA. Non-temperature drivers are held constant at their 2010 values for comparison with the empirical data. The impact functions are tested at 0° to 3 °C of global warming from 2000.
The analysis finds that, contrary to the FUND projections, global warming of 3 °C relative to 2000 would reduce US energy expenditure and, therefore, would have a positive impact on US economic growth. FUND projects the economic impact to be −0.80% of GDP, whereas our analysis of the EIA data indicates the impact would be +0.07% of GDP. We infer that the impact of global warming on energy consumption may be positive for the regions that produced 82% of the world’s GDP in 2010 and, by inference, may be positive for the global economy.
The significance of these findings for climate policy is substantial. If the FUND sectoral economic impact projections, other than energy, are correct, and the projected economic impact of energy should actually be near zero or positive rather than negative, then global warming of up to around 3 °C relative to 2000, and 4 °C relative to pre-industrial times, would be economically beneficial, not detrimental.In this case, the hypothesis that global warming would be harmful to the global economy this century may be false, and policies to reduce global warming may not be justified. Not adopting policies to reduce global warming would yield the economic benefits of warming and avoid the economic costs of those policies.
The discrepancy between the impacts projected by FUND and those found from the EIA data may be due to a substantial proportion of the impacts (37% for the US and 67% for the world) being due to non-temperature drivers, not temperature change, and to some incorrect energy impact function parameter values.
Economic Impact of Energy Consumption Change Caused by Global Warming
by Peter A. Lang and Kenneth B. Gregory
Abstract
This paper tests the validity of the FUND model’s energy impact functions, and the hypothesis that global warming of 2 °C or more above pre-industrial times would negatively impact the global economy. Empirical data of energy expenditure and average temperatures of the US states and census divisions are compared with projections using the energy impact functions with non-temperature drivers held constant at their 2010 values. The empirical data indicates that energy expenditure decreases as temperatures increase, suggesting that global warming, by itself, may reduce US energy expenditure and thereby have a positive impact on US economic growth. These findings are then compared with FUND energy impact projections for the world at 3 °C of global warming from 2000. The comparisons suggest that warming, by itself, may reduce global energy consumption. If these findings are correct, and if FUND projections for the non-energy impact sectors are valid, 3 °C of global warming from 2000 would increase global economic growth. In this case, the hypothesis is false and policies to reduce global warming are detrimental to the global economy. We recommend the FUND energy impact functions be modified and recalibrated against best available empirical data. Our analysis and conclusions warrant further investigation.
Full open-access text of the paper is available here: https://www.mdpi.com/1996-1073/12/18/3575/htm#B4-energies-12-03575
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It just doesn’t seem fair, does it? People here keep looking for a better standard of science than what we’ve so often seen in the past!
Can’t they see that it’s much safer to just accept higher taxes and do as we’re told?
–What they found is surprising; the overall economic impact of 3.0°C global warming would be beneficial nor just for the United States, but the entire global economy.–
Ok. But Earth’s average temperature is not going to increase by 3 C.
But were global temperatures increased by 3 C, then we are still in a Ice Age:
Our oceans would still be cold and our polar ice caps would continue to remain frozen.
It hard to imagine a more silly religion, in which it’s witless believers are frighten about warming- when they know, that they are living in an Ice Age.
I don’t think there is any convincing evidence of Earth ever being Snowball Earth, but if wanted to know what Earth would sort of look like, being *somewhat close* to Earth being a Snowball Earth,, well, just look out the window.
It is the warmer phase of being somewhat close to a Snowball Earth, or proper term is it’s the interglacial period of the Ice Age in which glacier periods has been pretty close to SnowBall Earth {less than 2 C away }.
Most will agree that we have been in Ice Age for millions of years, and this Ice Age has been at the coolest, most recently.
AND if extended the graph {to “predict” the distance future] one could make a wild prediction that Earth will become a Snowball Earth- perhaps within a few million years.
[[Though simply extending a trend line is very poor way to predict the future.]]
But, in my opinion, Earth is likely the closest {in geological time] it’s ever been to becoming a Snowball [or Slushball] Earth.
It’s an incontestable fact that we are living in an Ice Age.
And, if not consumed with too much religious fervor, there is no need to worry about Earth getting too warm, and in terms human lifetimes or for reasonable practical concerns, there also no need to worry about it getting much cooler than the present cool conditions that we are enjoying in the 21st Century.
Our cold ocean has average temperature of about 3.5 C.
To increase global average surface air temperature by 3 C, our cold ocean would need to warm by about 1 C.
I’m not convinced they know we’re living in an Ice Age! Hence they believe whatever propaganda is currently popular!