We’ve yet another of these dire warnings, that we’re all about to boil Flipper and we really must do something. The underlying logic of the claim being entirely wrong. Whether or not climate change is taking place is a scientific question. Sure, lots of lovely arguments about that science. But start from the information point that the IPCC is right, it is, we’re causing it and something should be done. Well, what is it that should be done?
That’s then an economic question. One laid out very well in the Stern Review. It’s also one discussed at length in the IPCC’s own reports. They manage to get it right, too.
It’s the final call, say scientists, the most extensive warning yet on the risks of rising global temperatures.
Their dramatic report on keeping that rise under 1.5 degrees C states that the world is now completely off track, heading instead towards 3C.
Staying below 1.5C will require “rapid, far-reaching and unprecedented changes in all aspects of society”.
It will be hugely expensive, the report says, but the window of opportunity is not yet closed.
That’s entirely the wrong logic.
No, this isn’t to use economics in the guise of arguing for privatisation, or in favour of state control. Nor the level of inequality, none of that stuff at all. This is to use the insights into basic activities that the subjects grants us:
“The type of change required to limit warming to 1.5C is really unprecedented,” said Jim Skea, one of the authors of the report and a professor at Imperial College in London.
“We need to extend the kind of progress we have made in renewable energy [and the decarbonisation of the electricity sector] into other areas like transportation and land management.”
That is entirely arse over tit.
The authors of the landmark report by the UN Intergovernmental Panel on Climate Change (IPCC) released on Monday say urgent and unprecedented changes are needed to reach the target, which they say is affordable and feasible although it lies at the most ambitious end of the Paris agreement pledge to keep temperatures between 1.5C and 2C.
As is that equally fundament over fun bags.
Start at the very beginning, our aim is to maximise human utility over time. We want as many humans as possible to be a happy as possible. Utility is defined by the humans themselves. Utility includes having the latest iPhone, a baby’s smile and Bath City Football Club reaching the Beazer Homes Leagues South West Division One. Yea verily, even the impossible. It is also over time. Making us happy at the expense of there being no humans in 200 years time doesn’t work.
There is some risk that whatever we do there might be no humans in 200 years time – that asteroid might arrive. Thus there is a discount rate to future humans and their happiness – those chapters of the Stern Review.
No, no, leave the details. That’s the logic. The empirical bits get filled in after we’ve all agree on these basics.
So, we do realise that some things need to change given that we’ve already started from the point that there’s a problem, we’re causing it and something should be done. Our limitation here is that we don’t want to decrease current utility more than that we’ll save in the future by changing. We could indeed all return to being subsistence peasants, billions would die and climate change wouldn’t happen. That’s too high a cost for that future benefit. If it all cost thruppence ha’penny to solve then we’d do it in a flash and not even worry about it.
A classic economic point, we want to have the right balance here. The optimal amount of action – the optimal amount of climate change. What we’re trying to optimise being that well being, that utility of humans over time, of all humans over all time.
That optimal amount being where the costs of making the changes to prevent it, in reduced human utility, are equal to the damage to human utility avoided. If we do less change than this then we’re reducing future utility by more than we’re adding to present. Equally, if we do more than this then we’re increasing future utility by less than we’re reducing current. Neither of those is optimising utility over time.
Note that this isn’t some denialist logic, it’s not some right wing nor neoliberal invention, this is the plain flat out economic logic of the situation. As parts of the IPCC reports make clear, as the Stern Review does.
So, when we start to talk about what must be done. We do not start with a temperature target and then pledge, whatever the cost, to meet it. We start with the cost and then work out what temperature that’s going to lead us to. Because it is costs and benefits we are trying to balance, not temperatures.
So, now we’ve got the scientists, none of whom would recognise economic logic if it came up and bit them on those fundaments, telling us that in order to meet a temperature target it’s going to be very expensive, very expensive indeed. And that is our problem. The more expensive it is to meet that temperature target the less we want the target to be that temperature.
Again, start from where we accept, arguendo, the basic idea that it’s all happening and something must be done. Even with that we’ve the entire world following the wrong logic. The more expensive it is to hit 1.5 degrees then the less we want 1.5 degrees to be our target. If 1.5 degrees requires massive expenditure now, more than the gains in human happiness in the future, then we want to allow the temperature to rise 1.75, or 2.0, or 2.5 degrees.
This entire climate change process has managed to become derailed from the most basic logic of what climate change is about. The more we’ve got to sacrifice today then the more correct is the decision to allow Flipper to boil. Any decision making process that doesn’t grasp that is simply wrong. Our problem being that the fools are trying to plan the world on their ignorance of this basic and simple point.