How Human Disruptions Impact Global GDP

Resource Brief by Kip Hansen — 29 March 2023

Dr. Lars Schernikau, energy economist, entrepreneur, commodity trader and author of the recent book “The Unpopular Truth…about Electricity and the Future of Energy”, has produced a very informative and insightful short YouTube titled “How ‘Human’ Disruptions Impact GDP”.

“Human Disruptions”? —    Like the Covid Pandemic and governmental responses to it.  Like the war in the Ukraine.  Like governmental efforts to reduce CO2 emissions and restrict the use of fossil fuels.  Like “NetZero”. 

These are not “climate” questions per se, but economic questions that need answering from the knowledge base that is World Economics and Energy Economics.   

Lars Schernikau is one of those people with the depth of understanding necessary to address these issues and communicate what it all means to us.

In this 15-minute YouTube lecture, given over a professional slide deck of illustrations and quotes, Schernikau uses data and projections from the IPCC, Nobel Prize winner William Nordhaus (Nordhaus 2018), Kahn et al. (2021) and other studies, comparing their projections with comments and exploring the possible and probable economic outcomes of the already-underway “NetZero” transition. 

I don’t want to include a spoiler here,  as you should really dedicate a quarter hour to this YouTube, I can tell you that Schernikau shows that  regardless of future climate scenario, regardless of climate sensitivity, and regardless of climate actions or inactions:

The outcomes, in regards to Global GDP,  are better than you think.

Here is the presentation.

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Author’s Comment:

This presentation is well-worth the 15 minutes it takes to watch it, though you may wish to pause the video often to take a closer look at some of the slides. 

We see a lot of details here at WUWT on climate sensitivity and various projections of future temperatures, but seldom see anything on the actual effects on the overall economy – and it is the overall economy that reflects the conditions of human societies.  Better economic conditions generally mean better lives, especially at the lower ends of the economic range.  The biggest improvements to marginal societies come with the ratcheting up of basic standards of living – which depend on decent paying jobs and education. 

Thanks for reading – hope you have checked out Schernikau‘s presentation.   The slide deck can be accessed directly here.

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Chris Hanley
March 28, 2023 11:31 pm

An interesting summary of various academic studies of the supposed costs of various assumed effects of assumed future warming whatever the cause(s) and assumed costs and benefits of mitigation (if that were possible).
There was no mention of the likely benefits and increased global GDP of the assumed future warming ‘scenarios’ like increased agrarian productivity due to a warming whatever the cause(s) and atmospheric CO2 enrichment.
Also not mentioned is the enormous cost to global GDP of the inevitable civil unrest even energy wars that would break out if the mitigation on the scale advocated by the IPCC etc. were attempted.
The planet has warmed over the past forty years the global GDP has more that quadrupled in real terms in large part due to the increased use of fossil fuels supposedly the cause of future GDP costs — go figure.
I dare say that a cooling climate would also have global GDP costs so a panglossian view would be we currently enjoy the most perfect climate possible 😋 .

Last edited 2 months ago by Chris Hanley
Steve Case
Reply to  Chris Hanley
March 29, 2023 12:11 am

“…atmospheric CO2 enrichment…”

Excellent, just excellent (-:

Reply to  Steve Case
March 29, 2023 2:49 am

Very few Climate Howler Global Whiners know greenhouse owners have been CO2 enriching for many decades.

Adding CO2 to the atmosphere is also CO2 enrichment.

Greenhouse owners aim for 1000ppm to 1500ppm CO2

A good level for the atmosphere would be 750ppm to 1000ppm, based on about 300 scientific studies of CO2 enrichment — C3 plant growth that I’ve rea in the past 25 years. The studies I read rarely used over 1000ppm so I can’t say 1500ppm would be better than 1000ppm.

There are over 3000 such studies, and that was the count years ago.

Adding CO2 to the atmosphere, when using modern pollution controls, was inadvertently the best thing humans have ever done to improve the ecology of our planet. Global Whiners go berserk when I say that, which entertains me. Honest Climate Science and Energy Blog

Last edited 2 months ago by Richard Greene
Reply to  Chris Hanley
March 29, 2023 2:40 am

The planet has warmed over the past forty years the global GDP has more that quadrupled in real terms in large part due to the increased use of fossil fuels supposedly the cause of future GDP costs — go figure.]

GDP growth, hydrocarbon fuel use and CO2 emissions are all strongly correlated.

They are simultaneous, related variables — it’s hard to claim one causes the other.

The biggest change in the past 40 years that caused all three variables to rise is a reduction of communism in many nations. Mainly China, Russia and eastern European nations.

The communist economic system was hindering economic growth.
Russia and eastern Europe got rid of it.

China converted about 40% of their means of production to their unique form of state capitalism. And that 40% accounted for 60% of their GDP.

Pure communism had been a failure for bringing people out of poverty. Similar changes have been happening in Vietnam.

In 2019, before the Covid epidemic made Chinese economic data wacky:

State-owned enterprises accounted for over 60% of China’s market capitalization in 2019 and generated 40% of China’s GDP of US$15.98 trillion dollars (101.36 trillion yuan) in 2020.

Domestic and foreign private businesses and investment accounting for the remaining 60%.

Last edited 2 months ago by Richard Greene
Reply to  Richard Greene
March 30, 2023 9:33 pm

a reduction of communism in many nations…

amply compensated on the Grand Scale by the total collapse of the old colonisers (US, UK, France etc) into abject communism and social decay.
it is a common mistake that capitalism won the cold war, communism is the clear winner. Only those who remember history are moving away from communism, the rest are rushing towards it.
Maybe work on that reduction theory a bit more… go ask Macaroni, Bidenski, Turdeau, Lafart for pointers towards the reality of it.

March 29, 2023 2:12 am

Hansen is one of the best authors here.
I can only wonder why he would have any interest in this data free economic and climate astrology.

“Data free?”. you ask? “There are lots of numbers here”
But they are not data
There are no data for the future
The future climate and future economy is merely a data free speculation highly dependent on assumptions used. A wild guess
Therefore, this report is a totally meaningless, wild guess astrology.

Not one human alive today knows what the global climate will be like in 100 years. Except me, of course: It will be warmer, unless it is colder.

Not one person on this planet knows the global GDP growth rate over the next 100 years

If the climate gets warmer, and there is more CO2 in the atmosphere, the result is likely to be good news: Milder temperatures in colder nations and better plant growth.

I wonder if the author sees CO2 enrichment as good news, just as most greenhouse owners do, but how does one quantify it?

The sad truth about GDP growth statistics are they includes all government spending, including weapons of war, and spending on redundant things, such as Nut Zero, that will not improve electric grids, but will actually degrade them .. but still get counted as Real GDP economic growth.

The general rule of thumb for governments and rulers in the history of this planet is mainly tyranny, and only a small minority of nations with freedom. Those freedoms have been slipping away rapidly in the past few years. That trend, morphing toward totalitarianism, could severely affect GDP growth in future decades.

The trend of fewer births directly affects GDP growth through the grwoth of the labor force.

Labor productivity, the primary source of economic growth, can be hindered by government rules and mandates.

The increase of the labor productivity rate in the 1990,s with the invention of the internet, was predicted to be a permanent step up for world economic growth. The productivity growth rate improvement only lasted a few years. Similar productivity claims are made about AI today.

In the 43 years I wrote a for profit economics newsletter, called ECONOMIC LOGIC, the most important fact, that I mentioned at least once a year, was:
As a group US economists have never predicted a US recession
Not even once has a majority of well-known US economists predicted a US recession. Even though one recession a decade is very likely.

Think about that fact when someone recommends a wild guess of the climate and economy in 100 years.

Don’t waste your time reading long term predictions — they are rarely right, and even then. they are “right”, they are only “right” because they were a lucky guess.

Why am I against long term predictions?
By “long term”, I mean for more than six months in the future.

Because without long term predictions, that are very likely to be wrong, there is no CAGW, and without CAGW, there is no Nut Zero,
That’s why.

The entire climate change religion is based on a prediction of CAGW that has been wrong since it was defined as an ECS range in the 1979 Charney Report.

Here are 24 climate and energy articles I read yesterday and recommend to others, listed on my daily page of recommended articles: Every one better than this video.
Honest Climate Science and Energy Blog: The best climate science and energy articles I read today, March 28, 2023

Last edited 2 months ago by Richard Greene
Reply to  Richard Greene
March 29, 2023 2:23 am

A wild guess”

Aka a model.

Reply to  strativarius
March 29, 2023 3:00 am

A model of what?
Not the climate on this planet
The Russian INM may be the one exception
They may be models of the climate on some other planet
Maybe Uranus?

Better described as “Climate Confuser Games”

No one knows if the climate will be warmer or colder in 100 years

Based on historical anecdotes, warmer would be good news and colder would be bad news.

No one ever called a cold period a Climate Optimum.

Reply to  Richard Greene
March 29, 2023 3:13 am

You should recapitulate…

““A wild guess”

Aka a model.

Reply to  strativarius
March 29, 2023 2:24 pm

I think you give most alarmists too much credit. You don’t really think old Al Gore, to point out only one obvious example, uses anything as disciplined as a numerical model to come up with his wild guesses, do you?

Frank from NoVA
Reply to  Kip Hansen
March 29, 2023 11:38 am

‘Unfortunately, the world’s governments are acting on the understandings and projections/predictions of the academic economists and climate “experts”. Thus, it it important to know that they are saying to the policy makers.’

It’s true that it’s ‘important to know what the “experts” are saying to the “policy makers”, but that’s a relatively minor part of the problem. The real issue is that policy makers listen to the wrong experts, meaning those whose policies heavily favor the expansion of government. Examples abound:

  • Keynesians over Austrians
  • Globalists over Nativists
  • Centralized banking over Free banking
  • Climate Alarmists over Climate Realists
  • Etc.

In other words, the problem isn’t good vs. bad experts, it’s bad policy makers.

Reply to  Frank from NoVA
March 29, 2023 2:29 pm

No, they don’t listen! Consider the IPCC summaries for policy makers. They are produced by government policy makes, for government policy makers, not by anyone with even a poor education in, or understand of, how the natural world actual functions.

Last edited 2 months ago by AndyHce
Frank from NoVA
Reply to  AndyHce
March 29, 2023 4:11 pm

The IPCC and their stooges can write away to their heart’s content, but it won’t affect me at all unless my ‘immediate’ policy makers use the IPCC’s offal as a basis for formulating law. I have no influence on the IPCC, but may be able to influence the installation of better immediate policy makers to shield me from the former.

March 29, 2023 2:20 am

“economic questions that need answering”

And an establishment determined not to answer them.

“Andrew Montford, Global Warming Policy Forum, which won the decision says:

“This is a major embarrassment for the Treasury. It appears that it cobbled together a few numbers on the back of an envelope, and simply emailed them off to the Prime Minister without a blush. After Parliament’s decision to adopt the Net Zero target without any meaningful scrutiny, and without consideration of the economic and engineering implications, it is becoming clear that the whole project is misgovernance on a historic scale.”

I believe the economic answers are: to export heavy [emissions] industries to East Asia etc, to introduce rationing in the west beginning with energy and food and to ensure populations are nudged into making do with a lot less than they have – and being happy.

Ehrlich set the bar and his ideas have finally taken off.

“At a time when degrowth economics is being hotly debated within and outside the environmental movement, Saito’s aim, he explains, is to “overcome the divide between Marxism and degrowth”, bringing together the red and the green. Many in the environmental movement argue that capitalism and its “infinite accumulation on a finite planet … is the root cause of climate breakdown”, writes Saito. But because Marx’s writings on ecology have often been marginalised, there’s a view that his socialism is pro-technological and anti-ecological – supporting the development of technologies to lay the foundation for a post-capitalist society and ignoring nature’s limits, believing it can be dominated by humans.”

So, now instead of improving people’s material and spiritual lot, they are going to reduce it. It seems to be working – and as ever there’s attribution to be done…

“The Institute and Faculty of Actuaries, which calculates life expectancy on behalf of the UK pension industry, declined to speculate on why longevity is deteriorating for men and women in England and Wales. Some analysts, however, blame austerity and cuts in NHS spending, others point to worsening obesity, dementia and diabetes.”

it is the overall economy that reflects the conditions of human societies. “

Going down.

Joseph Zorzin
Reply to  strativarius
March 29, 2023 4:41 am

Marx’s writings on ecology….”

No such thing.

Frank from NoVA
Reply to  Joseph Zorzin
March 29, 2023 1:53 pm

Just checking in. Any headway on convincing MA politicians that they can sequester carbon for decades, if not longer, by converting old trees to dimensional lumber?

Joseph Zorzin
Reply to  Frank from NoVA
March 29, 2023 2:15 pm

it’s all up in the air- the govenor stopped all cutting on state forest at the beginning of this year- with a statement that the state will come up with a science based blah, blah, blah- but that was essentially done back in 2010 with its “forest vision process” of which I was a part of, on the 12 person “technical steering committe” and there was a stake holders’ committee of maybe 40 people – we spent a year debating forest policies including climate implications- though at that time NOBODY in MA was a climate skeptic, the presumption was that there is a major climate problem— the conclusion back then was that about a 1/3rd of state forest would be in “parks” (with little harvesting, except for ecological reasons), a 1/3 would be in “reserves” (meaning locked up for blah, blah, blah reasons) and the final 1/3 for serious forestry- seemed like a reasonable compromise

the problem is that in the past few years there is this new demand by the enviro nut jobs that we must lock up ALL the publicly owned forests to sequester carbon while hinting that there should be a slow down of cutting on private land- this is the “proforestation” fantasy – these nut jobs are gaining in influence because they bomb all the media with this idea- these nut jobs do not have the big picture of what’s going on around the world- as we get here in WUWT- they really think they’ll save the Earth this way and the biodiversity- not knowing about China and India and Africa- and the immense damage to our economy and the impossibility of getting to net zero

unfortunately, virtually all politicians in this state are dummies- even the lawyers- they may be smart in some issues but not this issue of what to do with state land and forest policies in general- so far, no word is leaking out of the state administration- some logging firms that payed for timber projects before the beginning of the year and were planning on starting their work early in this year have been prevented from starting– which is outrageous- most likely after some time, this “moratorium” of timber cutting on state land will pass and we’ll be back to the 3 way division of a dozen years ago

but some of us of course think forestry is a great thing- I keep telling the rest of the forestry “community” that in order to win such a battle- we should be pushing very hard in the opposite direction- calling for far MORE cutting on state land

I’ve been caught up in forest policy debates here for over 30 years. I should write a book on the subject. 🙂

so the answer to your question is no- no luck in convincing the politicians that we can sequester carbon for decades, if not longer, by converting old trees to dimensional lumber- but that idea is being advanced- the other side claims they can deconstruct the idea- that it’s false- what I say about this we have no need to sequester carbon- what we should do is intense forestry on most forest land- with many benefits to society – there is climate emergency so no need to worry about sequestering carbon- but, I’m seldom listened to here by either side

as to why I don’t use proper punctuation- I’m lazy!

Frank from NoVA
Reply to  Joseph Zorzin
March 29, 2023 3:49 pm

Thanks, I figured ‘logic’ is always an uphill battle with these people.

David Dibbell
March 29, 2023 3:58 am

“This presentation is well-worth the 15 minutes it takes to watch it…”
Agreed. Done.
Thanks for the tip, Kip! 

David Dibbell
Reply to  Kip Hansen
March 29, 2023 8:46 am

I had heard about Schernikau, but had not yet read or seen his work. So I figured I would watch. Much along the lines of Lomborg’s views. So even though I think these analysts cede too much to the claims of a significant climate system response to GHGs, I respect their reasoning about the consequences of policy choices.

Peta of Newark
March 29, 2023 4:08 am

Trivia, minutia and irrelevance.
People, critters and planets do not behave like machines and they most certainly never conform to straight-lines curves on a graph.
Golden rule for those situations: Expect the unexpected
That is where Ukraine came. Strangely, it was not or should not have been unexpected, Trump saw it coming and was laughed at.

Climate Change is NOT going to be the Golden Warm Utopia of greenery & lovely many folks imagine.
Even if there was any credence in the GHGE, burning the very fabric of your house/home/furniture to keep warm is hardly the brightest idea anyone ever had
It will be the horror that the alarmists predict but for All The Wrong Reasons

Two examples: but will only tell one here and now.
My maternal grandfather, as I knew him briefly before his passing (not quite) 60 years ago, was a farmer in what was The County of Cumberland in NW England.
His was a ‘mixed farm’ on the flood plain of a large river that drained the Lake District about 7 miles inland from a town name of Silloth
As I’ve come to realise, a miniature ‘NIle Delta’

The only real thing I remember of him was when one day, me and him went for a walk around some of his fields. We looked over gates and through hedges at dairy cows, horses, sheep, hay fields and arable crops.
He was a very tall man, easily 6′ 6″ and that was my memory when we called at his crop of Oats (Avena Sativa) – being grown for the (work) horses he kept.
On seeing this crop from behind the gate, his pride, joy and happiness were palpable. He was old by then, rapidly declining health but just the sight of this brought him back to life.

It was a spring-planted crop and was ready for harvest, all the right colours and smells and sounds in the breeze.
As a small kid it was a mystery to me, especially that even with the height of the man, he had to stand on the 2nd or 3rd bar of the gate to survey the crop.
This stuff was standing (standing being the operative here) at least 7 feet tall – as a small kid all I saw was this massive and intimidating forest.
But I shared his joy, I desperately wanted to understand, to ‘know’
I knew that ‘something good’ was in there but, just what exactly?

Come 40 years later here’s me as a cow-farmer, less than 20 miles further inland, I gave up trying to grow spring-planted barley (Hordeum Vulgare)
The growing season even for that stuff had become too short.
Yes The Climate seemed to have changed but massively for the worse. I was in fact almost the last of my local peers to give up spring-barley – 10 years previous almost everybody did.
(It was actually the crows (Corvids) that did it for me and they feature in Part 2 of this tale, when I get to tell it)
(It’s = Sugar. Feed it to beef animals and the ‘look lovely’ when you take them to auction)

This was me 10 years ago, ‘my auction’
comment image

The guy standing up in the white coat (above the ‘Hexham’ billboard)
answers to the (first) name of ‘Scott’ – we were well acquainted.

It puzzled me just why The Climate changed so that I and my neighbours could no longer grow spring barley, not even the dwarf variety that is all there is available now.
And even then it needed masses of fertilisers and chemicals to keep it on its feet.
Yet my grandfather could grow crops that stood 7 feet tall with only a modicum of horse poo for fertiliser and no chemicals
While The Weather was such that they never ‘blew over’ or got wasted by cold, wet and rain.
Ain’t that crazy, so close to the coast, so far north and directly facing the North Atlantic (once it has skipped over Ireland)
What changed?

I’ve worked it out now
Dish The Dirt – while there still is some.

Last edited 2 months ago by Peta of Newark
Reply to  Peta of Newark
March 29, 2023 4:14 am

What changed?”

Outside my small parcel of land in SW17, everything. I’m seriously considering going Passport to Pimlico

Joseph Zorzin
Reply to  Peta of Newark
March 29, 2023 4:46 am

“Climate Change is NOT going to be the Golden Warm Utopia of greenery & lovely many folks imagine.”

I don’t see anyone around here saying it’ll be a Utopia- it’s just that we don’t have to listen to the likes of Doctor of Theology Greta telling us all to “panic”.

Reply to  Joseph Zorzin
March 29, 2023 3:02 pm

Life is some kind of challenge most days for most people, regardless.

Reply to  Peta of Newark
March 29, 2023 6:40 am

If you can I recommend watching “Clarkson Farm” on Prime. Jeremy Clarkson farms over 1000 acres and his oft funny woes are documented. Some of it reminds me of my youth on grandparents farm. Well worth a viewing.

Lars S.
March 29, 2023 5:11 am

thanks Kip, appreciated… obviously, this is only a summary of external data, everyone can make their own interpretations of what this means. I tried to give various sources especially on the “cost” of climate change, of course the benefits of CO2 are not considered by any of those mentioned models or accords.

clearly, the cost of “energy transition” does not include the true full cost from energy poverty…

thanks for all your comments

Lars Schernikau

Andy Pattullo
March 29, 2023 10:01 am

The whole presentation is interesting and informative. The most imporant statements he makes are about not trusting what he says but looking to the evidence and his admitting of biases up front. These are the words of an honest academic who wants is listeners to be informed with truths rather than dogma. So rare these days.

E. Schaffer
March 29, 2023 10:09 am

The cost of “net zero” are based on the assumption it was even possible. Then it sums up some (be it realistic or not) investments to get there. In real life we know darn well about the impossibility of running electric grids with wind and solar and prohibitive energy costs. Let alone the need for electricity to substitute all other combustion with cars, aircraft, ships and industry.

All the economic progress in the past was essentially about leveraging manpower with tools using external energy. Take away the energy and there is no more leverage. The consequence is not a single diggit percentage cost of GDP, but an economic meltdown.

March 30, 2023 9:25 pm

I shall not rush to see the presentation, as the headline pushes my economics snigger response; GDP is a worthless metric, of use only to propagandists and naive buttspelonkers trying to impress the boss with their high financial knowledge.
If GDP was an actual thing, please explain how the GDP keeps perpetually climbing, while poverty rises concurrently. Moving money does not neceessarily produce anything but debt…
The religion of Eternal Economic Growth, and its bastard child, Trickle-down Economics, here married to climastrology and surreptitious genocide. Phuyi!

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