Guest essay by Eric Worrall
According to Nobel Prize winner Joseph E. Stiglitz, writing in NYT, Bjørn Lomborg’s new book downplays the risk of allowing global warming to occur, and ignores a study prepared by himself and Lord Nicholas Stern which suggests climate action is affordable. But Stiglitz and Stern’s own study seems to gloss over the details of how society can afford to pay for their proposed low carbon transition.
Are We Overreacting on Climate Change?
By Joseph E. Stiglitz
FALSE ALARM
How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet
By Bjorn LomborgThe thesis of Bjorn Lomborg’s “False Alarm” is simple and simplistic: Activists have been sounding a false alarm about the dangers of climate change. If we listen to them, Lomborg says, we will waste trillions of dollars, achieve little and the poor will suffer the most. Science has provided a way to carefully balance costs and benefits, if we would only listen to its clarion call. And, of course, the villain in this “false alarm,” the boogeyman for all of society’s ills, is the hyperventilating media. Lomborg doesn’t use the term “fake news,” but it’s there if you read between the lines.
As with others in Lomborg’s camp, there’s the pretense in this book of balance and reference to careful studies. Yes, climate change is real. Yes, we should do something about it. But, goes his message, let’s be real, there are other problems, too. Resources are scarce. The more money we spend on climate change, the less we have to grow the economy; and as we all know (or do we?) everybody benefits from growth, especially the poor. And besides, there’s not much we can do about climate change.
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Somehow, missing in his list of good policy measures are easy things like good regulations — preventing coal-burning electric generators, for example. Lomborg, a Danish statistician, exhibits a naïve belief that markets work well — ignoring a half-century of research into market failures that says otherwise — so well, in fact, that there is no reason for government to intervene other than by setting the right price of carbon.
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Assessing how best to address climate change requires integrating analyses of the economy and the environment. Lomborg draws heavily on the work of William Nordhaus of Yale University, who came up with an estimate of the economic cost to limiting climate change to 1.5 to 2 degrees Celsius above preindustrial levels. While Nordhaus seems to think it’s enormous, an international panel chaired by Lord Nicholas Stern and me (called the High-Level Commission on Carbon Prices), supported by the World Bank, concluded that those goals could be achieved at a moderate price, well within the range of what the global economic system absorbs with the variability of energy prices.
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This book proves the aphorism that a little knowledge is dangerous. It’s nominally about air pollution. It’s really about mind pollution.
Joseph E. Stiglitz was chief economist of the World Bank from 1992 to 2000 and was awarded the Nobel in economic science in 2001.
Read more: https://www.nytimes.com/2020/07/16/books/review/bjorn-lomborg-false-alarm-joseph-stiglitz.html
The 2017 study authored by Stiglitz and Stern itself is an interesting document, it leans heavily on the idea of government imposed carbon taxes, backed by government investment in public transport and “laying the groundwork for renewable-based power generation”. The Stiglitz and Stern report recommends a carbon price of “at least US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030, provided a supportive policy environment is in place“, and lists “co-benefits” such as reducing road congestion and air pollution, as ordinary people are priced out of private automobile ownership.
What appears to be missing from Stiglitz and Stern is any realistic estimate of the capital cost of going renewable. They briefly mention nuclear as an option, but their study mostly seems to assume if the carbon price pain knob is turned up high enough, it will encourage the innovation required to achieve the desired outcome.
Stiglitz and Stern criticise Lomborg’s suggestion that radical restructuring of the energy industry is too expensive, but they don’t seem to provide their own detailed transition plan to demonstrate renewables are affordable. I’m talking about an actual priced up transition plan; tonnes of concrete required, solar panels required, battery backup required, energy required to process and refine these materials, maintenance costs.
When you consider the magnitude of material and engineering required, the implausibility of the proposed transition to renewables is obvious.
Consider the problem of energy storage. Energy storage is critical to converting intermittent renewable energy to the reliable dispatchable energy we are used to. And I’m not talking about a few minutes of Energy storage; renewable energy droughts, prolonged periods of adverse weather conditions, can last for months or even years.
The following is from THE “NEW ENERGY ECONOMY”: AN EXERCISE IN MAGICAL THINKING by Mark P. Mills Senior Fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science.
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Battery storage is quite another matter. Consider Tesla, the world’s best-known battery maker: $200,000 worth of Tesla batteries, which collectively weigh over 20,000 pounds, are needed to store the energy equivalent of one barrel of oil. A barrel of oil, meanwhile, weighs 300 pounds and can be stored in a $20 tank. Those are the realities of today’s lithium batteries. Even a 200% improvement in underlying battery economics and technology won’t close such a gap.
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The annual output of Tesla’s Gigafactory, the world’s largest battery factory, could store three minutes’ worth of annual U.S. electricity demand. It would require 1,000 years of production to make enough batteries for two days’ worth of U.S. electricity demand. Meanwhile, 50–100 pounds of materials are mined, moved, and processed for every pound of battery produced.
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Read more: https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf
Unless green advocates like Stiglitz and Stern address in detail how this gap between capabilities and engineering requirements can be bridged, it will be difficult to take their criticism of Lomborg seriously.
Imagine if say a hurricane strength blizzard hit the East Coast, blacking out the sky with storm clouds for days, forcing wind turbines to furl their blades to survive the blast, covering large areas of the USA with a thick blanket of snow and ice, driving millions of people to turn up their home heating to maximum to avoid freezing to death.
How many thousands of years worth of battery backup production would be required in this scenario to keep the grid operating, until benign weather conditions returned?
Green advocate economists seem to want to leave the implementation details to the engineers, which given strong indications in various studies that the route to 100% renewables is impossibly expensive, seems a remarkable blind spot in their claims.
Update (EW): Lomborg’s new book is Available on Amazon.
Stern is a fool. Don’t pay attention to anything he says. When he, as an economist, was (playing) scientific adviser (!) to the Blair government he lamentably scared the living daylights out of the gullibles by claiming that Antarctica would melt by the end of the century.
Your scenario for an energy delivery catastrophe is just one possibility. Others are more likely.
In order to meet the goals heating and transportation are electrified. A nor’easter storm dumps snow across the NE USA followed by a large deep high pressure system with temperatures in the single digits (F) in late December. The extra load for heating and transportation increases demand a lot, the snow covers the solar cells so even the little amount available in the NE USA in late December is cut to zero and the winds are so light in the high pressure system that wind energy goes very low too. This is not an unusual weather situation and the amount of energy storage necessary to get through it will break the bank but if you don’t have the power people will freeze in the dark.
Whenever I hear someone claim that the green solution that depends upon electrification is more resilient I have to laugh. Imagine what will happen once that solution is implemented and there is an ice storm.
Yep – its not difficult to find examples of storms which would leave people utterly dependent on renewables shivering in the dark, under any remotely plausible energy storage scenario.
Stiglitz sez: “It’s really about mind pollution.”
Yeah, we noticed. Also known as propaganda, which Stiglitz uses to push his economy-destroying anti-“carbon” agenda.
“How does this compare to the world’s total energy consumption”
It does not need too. It is only the western world that is hell bent on destroying their civilization. The rest of the world will gleefully pick up the pieces. Thank heavens I am 73.
“…exhibits a naïve belief that markets work well — ignoring a half-century of research into market failures that says otherwise”
This emotional critique ignores the real and obvious history that show that markets work better than anything else, including Keynsean autonomous spending, in that they recover from the frequent and necessary failures inherent to any human enterprise. I’m pretty sure that Lomborg never says that markets work without failure, but pretty sure that Stiglitz will try to tell us that governments never do, a proposition requiring a helluva lot more blind faith than Lomborg expresses.
Almost all so called “market failures” are either the result of government interventions in the market, or because the market fails to produce the results the liberals are after.
The fact that we don’t factor in the non-existent costs of CO2 into the price of energy is to them, a market failure.
An objective definition of a market failure would be: if you can sign a “compact” to obtain a given result, everybody (in a market) would sign it.
I don’t think that’s often the case.
Easy? Go peddle that nonsense to China and India.
And of course, those two countries’ emissions will dwarf any CO2 reductions the Left imagines will result from destroying Western economies.
Last I checked, Stiglitz belonged to socialistinternational.org.
That’s all we need to know about him and his motives and views on Conservative Christian capitalist caused catastrophic climate change.
I thought that Lomborg’s book was politically astute. Had he criticised the basic AGW thesis, he could easily be shot down or ignored by believers. By accepting their (flawed) science, he allows a serious argument to be accepted, that current policies are wrong, even if you believe there is a problem. I don’t care if other people believe in AGW or not, so long as they stop spending my tax money and raising electricity bills to subsidise solar panels, windmills and electric cars. If his book helps end such insanity, who cares what silly ideas people have?
Stiglitz knows which side to make up stories for. Other economists who have encountered him know he is an arse. Count him as the Mann of econ circles and he has no training in these areas.
They do have one thing in common and that is a knowledge gap on the battery materials in the context of perceived scarcity. Here’s the thing–it will take many gullible mine investors to lose money in searching for and producing enough nickel to produce that many batteries. More importantly it requires many investors and governments to lose money in supplying that nickel with falling prices compared to their starting point and over time. This is why scarcities develop and make the news and then rips those who extrapolate from the wrong price signal. It is an obscure corner of markets and economics that ensnares the uninformed who dare to put skin in the game. But then there are those who never intend to compete like Solyndra and go for the quick payoff and exit with lack of competent due diligence in government agencies as their main assumption.
All this may be moot. COVID-19 has closed down the World economy. They assume that they can turn the switch back on and everything will go back to the way it was. I am more doubtful. It may be “All the King’s horses and all the King’s men could not put Humpty Dumpty together again”.
It may be several years before things get back to norrmal.
Before the pandemic, people in Africa were ask to prioritize spending.
“Climate Change” can in as a very low priority with Health Care and Education occupying the top spots.
I imagine that people will now want even more spent on Health Care.
Stern is a serial economics failure at predicting things related to climate.
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which sounds impressive until one learns exactly what that Nobel Prize was for.
A Nobel Prize for Economics that isn’t about actually performing economic assessments for large corporations, states, countries or the globe.
Stiglitz’s book with Stern appears to be an alignment of equals far from being any sort of savants.
I see many people citing clear examples of market failures – that are actually blatant failure of regulation by an authority. For example not transitioning to IPv6 is a classical example of failure (*), when:
– IPv6 supporting OSes are available
– routers handle IPv6
etc.
but ISP were not offering IPv6 adresses and routing at the time. The ISP get IP ranges from a regulator, not a free market. They can’t trade these as they don’t own IP ranges, they are just have a licence.
Not saying that IP ranges should be traded, but it’s classical example of fiat resource and failure of actors to act in the common good (transitioning to IPv6 Internet).
(*) see https://www.bortzmeyer.org/ipv6-et-l-echec-du-marche.html
(I recommend his website for non political issues.)