George Monbiot Discovers Opportunity Cost – It’s Not Going To Be Pretty, This

Now that the IPCC’s report is being misunderstood to mean that we’ll all have to survive on a diet of mung beans we would of course expect George Monbiot to weigh in. Which, obviously, he does. But in an interesting and for him what is going to be an uncomfortable manner. Because he raises the subject of opportunity costs:

The problem is that it concentrates on just one of the two ways of counting the carbon costs of farming. The first way – the IPCC’s approach – could be described as farming’s current account. How much greenhouse gas does driving tractors, spreading fertiliser and raising livestock produce every year? According to the panel’s report, the answer is around 23% of the planet-heating gases we currently produce. But this fails miserably to capture the overall impact of food production.

The second accounting method is more important. This could be described as the capital account: how does farming compare to the natural ecosystems that would otherwise have occupied the land? A paper published in Nature last year, but not mentioned by the IPCC, sought to count this cost. Please read these figures carefully. They could change your life.

The official carbon footprint of people in the UK is 5.4 tonnes of carbon dioxide per person per year. But in addition to this, the Nature paper estimates that the total greenhouse gas cost – in terms of lost opportunities for storing carbon that the land would offer were it not being farmed – of an average northern European diet is 9 tonnes a year. In other words, if we counted the “carbon opportunity costs” of our diet, our total footprint would almost triple, to 14.4 tonnes.

Now it’s entirely correct that opportunity costs need to be included. The second great lesson of economics, there are always opportunity costs.

Great. But now apply opportunity costs to climate change itself. Current predictions – in fact the models we all use to talk about climate change in the first place – tell us that the world will be some 11 times richer in 2100 than it was in 1990. Assuming that we follow the capitalist, globalised, free market system (the A1 family in the SRES). If we power this with lots of fossil fuels we’ll have lots of climate change. If we power it without lots of fossil fuels we’ll not have lots of climate change (A1FI and A1T).

Well, OK. George rather tells us that we’ve just got to stop economic growth right now because climate change, the environment. But stopping climate change right now has a cost – that opportunity cost of not being 11 times richer in a century’s time. Which is rather the problem with opportunity costs. Once you decide to bring them into the debate then you need to bring them all in. Further, people get to decide for themselves too. What looks like a reasonable trade off to you or me might not to George.

Fortunately, we’ve even a method of dealing with this. Those externalities, put them into market prices. That makes the effect of our trade offs visible as we make a decision. The carbon tax at the social cost of carbon means that we all, individually, see the opportunity costs and then react to them.

So, why does George not support a carbon tax? Why does he support instead legislative action to ban stuff? Because he knows that humanity, on average, will react to those trade offs of opportunity costs differently than he would. Thus he seeks the law to impose his view rather than leaving others to get on as they desire.

Which is in fact the argument against a carbon tax. That it wouldn’t be enough to prevent climate change at all. Because very large numbers of people don’t give a bugger about climate change which is something the campaigners never want to have to acknowledge.

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Matt Ryan
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Matt Ryan

More specifically, if you ask people if they are bothered about climate change they will agree. However, ask them to pay for it and they won’t be so keen.

Expressed versus revealed preferences.

TD
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TD

Yes. Many people will not adjust their behavior, pay increased costs for renewable energy, change their vacation plans, buy smaller cars, or pay more in tax specifically to counteract climate change. So the left sees this as probably their best chance ever to institute a strong and rigid command and control economy, with all of us begging these little mandarins for permission to do anything, all in the name of saving us all.

Boganboy
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Boganboy

I have noticed the occasional comment by pro-Greens, that, even if climate change turns out to be nonsense, the wonderful effects of the beautiful reforms that are being introduced will make it all entirely worthwhile.

Leo Savantt
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Leo Savantt

Muddy waters. Climate change is the norm, if it wasn’t changing that truly would be cause to be concerned, for the only state not changing is death. And what is the opportunity cost of not returning sequestrated CO2 back into the atmosphere from whence it came? Deserts, reduced flora, lower agricultural yields and even more of the global landmass permanently frozen? As Dr. Patrick Moore has so eloquently espoused the tiny proportion of anthropocentric CO2 in the atmosphere (0.01%) is wholly beneficial. We need more not less, so as to make the world greener and healthier. Monbiot, an unpleasant misanthrope,… Read more »

Thruppennybit
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Thruppennybit

“If we power this with lots of fossil fuels we’ll have lots of climate change”
Says them

Phoenix44
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Phoenix44

We farm, and we do that because the farming is worth more than the not farming. So even without knowing the numbers, we can be sure that stopping the farming makes us poorer.

So young Monbiot has to show that that loss is worth it somehow.

Andrew Carey
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Andrew Carey

Cheap red diesel, business rates exemption, Inheritance tax exemption, VED exemption on farm machinery, the CAP hand-outs incident on the land owners, the VAT exemption on a lot of the produce, and quite a lot of good will from the public who will buy British and buy local even when foreign is cheaper or higher quality. Oh and for 2 more months we have membership of a trading bloc designed to protect the recipients of all that from competition. And some regulations which have the effect of them not being more productive ( e.g. the GMO ban ) Some of… Read more »

Matt Ryan
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Matt Ryan

What will happen when the subsidies are removed is that farm land will revert to actual value (i.e. nothing). Once that happens, grazing sheep on it will still be more profitable than doing nothing with it.

Andrew Carey
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Andrew Carey

So put the land up for sale for a few pennies, and no-one will buy it. Yeah right.

Shadeburst
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Shadeburst

I understand the Moonbat as saying we should all stop eating?

Matt
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Matt

So he’s saying we should ban organic farming because its lower output per acre means that we’re using more land than we need to grow food?