Thursday, July 31, 2014
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The Davos Apocalypse

FORT LAUDERDALE – At the World Economic Forum’s annual meeting in Davos last month, leading participants called for a rapid shift to cleaner energy to tackle climate change. There is something unsettling about the global power elite jetting into an exclusive Swiss ski resort and telling the rest of the world to stop using fossil fuels.

The apocalyptic bombast is even more disturbing. According to Angel Gurría, Secretary-General of the OECD, “our planet is warming dangerously,” and we need to act now “to avoid catastrophe”; the United Nations climate chief, Christiana Figueres, maintains that global warming means that “the world economy is at risk.”

Former UN Secretary-General Kofi Annan takes the prize for the most extreme rhetoric, claiming that not curbing global warming is “a terrible gamble with the future of the planet and with life itself.”

Yet, the rhetoric is unconvincing. Yes, global warming is real and man-made. But creating panic and proposing unrealistic policies will not help in tackling the problem.

Both Annan and Gurría cited Typhoon Haiyan in the Philippines last November as evidence of increased climate-change-related damage. Never mind that the latest report by the UN Intergovernmental Panel on Climate Change (IPCC) found that “current datasets indicate no significant observed trends in global tropical cyclone frequency over the past century” and reported “low confidence” that any changes in hurricanes in recent (or future) decades had anything to do with global warming.

Annan and Gurría also neglected to note that global Accumulated Cyclone Energy, an index for total hurricane activity, is hovering at the lowest values seen since the 1970’s. Indeed, the trend for strong hurricanes around the Philippines has declined since 1951.

Similarly, Gurría tells us that Hurricane Sandy, which slammed into New York City in 2012, is an example of inaction on climate change, costing the United States “the equivalent of 0.5% of its GDP” each year. In fact, the US currently is experiencing the longest absence of intense landfall hurricanes since records began in 1900, while the adjusted damage cost for the US during this period, including Hurricane Sandy, has fallen slightly.

Figueres claims “that current annual losses worldwide due to extreme weather and disasters could be a staggering 12% of annual global GDP.” But the study she cites shows only a possible loss of 1-12% of GDP in the future, and this is estimated not globally but within just eight carefully selected, climate-vulnerable regions or cities. By contrast, according to the IPCC, “long-term trends in economic disaster losses adjusted for wealth and population increases have not been attributed to climate change.”

On the contrary, the bulk of peer-reviewed economic evidence indicates that, up to around 2050-2070, the net global economic impact of rising temperatures is likely to be positive. Although global warming will create costs stemming from more heat-related deaths and water stress, they will be outweighed by the benefits from many fewer cold-related deaths and higher agricultural productivity from higher levels of CO2.

Global warming is a long-term problem. Most models indicate that the cost toward the end of the century will be 1-5% of world GDP. This is not a trivial loss; but nor does it put “the world economy at risk.” For comparison, the IPCC expects that by the end of the century, the average person in the developing world will be 1,400-1,800% richer than today.

Such incorrect statements by leading officials reinforce wasteful policies based on wishful thinking. Figueres sees “momentum growing toward” climate policies as countries like China “reduce coal use.” In the real world, China accounts for almost 60% of the global increase in coal consumption from 2012 to 2014, according to the International Energy Agency. While Figueres lauds China for dramatically increasing its solar-power capacity in 2013, the increase in China’s reliance on coal power was 27 times greater.

Figueres’s weak grasp on the facts has led her not only to conclude that China is “doing it right” on climate change, but also to speculate that China has succeeded because its “political system avoids some of the legislative hurdles seen in countries including the US.” In other words, the UN’s top climate official seems to be suggesting that an authoritarian political system is better for the planet.

The fact remains that global wind and solar power usage in 2012 cut, at most, 275 million tons of CO2, while soaking up $60 billion in subsidies. With the electricity worth possibly $10 billion, the average cost of cutting a ton of CO2 is about $180. The biggest peer-reviewed estimate of the damage cost of CO2 is about $5 per ton. This means that solar and wind power avoid about $0.03 of climate damage for every dollar spent.

Compare this to smarter technological solutions. In the short run, the US shale-energy revolution has replaced high-polluting coal with cheaper, cleaner natural gas. This has cut about 300 million tons of US emissions – more than all the world’s solar and wind power combined – and at the same time has profited Americans by saving them $100 billion in energy costs.

In the long run, current investment in green research and development will help drive the price of future renewable energy below that of fossil fuels, enabling a choice that is both environmentally and economically sound. In the meantime, even dramatic cuts in CO2 emissions will have very little impact on hurricanes 50-100 years from now. Lifting billions of people out of poverty, however, would not only be intrinsically good; it would also make societies much more resilient in the face of extreme weather, whether caused by global warming or not.

Unfortunately, as we saw at Davos, the global climate debate is polluted with myths and wishful thinking. If we want to do more good at lower cost, we should start by cleaning it up.

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  1. CommentedDavid Donovan

    On the contrary, the bulk of peer-reviewed economic evidence indicates that, up to around 2050-2070, the net global economic impact of rising temperatures is likely to be positive.

  2. CommentedAndrei Sandberg

    Hi Björn
    The IPCC is not worried about the climate change for nothing. We must gradually get off the huge pollution of fossil fuels. Hopefully most of us agree on this. Some might not but that is also a free choice. A day’s walk around Beijing might make us think how bad it is.

    A concern, a worry, is a step towards a more creative thinking to solve the multiple crises. Many of us are worried when we look at the facts. A lot has been done but a lot more must be done.

    The intention of a subsidy is, how I see it in this case, to help to clean the air and Earth, and find a more sustainable way to fix the energy crisis. But there’s a lot of money at stake here.

    I would suggest following the safer route and cutting gradually down subsidies to the fossil fuel industry (who are making record profits) to zero or at least the same level as the renewables, but my guess is that the lobbying of the fossil industry is so powerful that these measures are hard to be taken.

    Shale-gas? Fracking has raised many questions about its environmental hazards and real costs. Chemicals are pumped under the ground etc. One can easily find the data about these polluting effects. What are the costs of these effects? Yes, there are of course some positive effects of moving via shale gas finally to cleaner forms of energy. Maybe a new “energy revolution” is on the way…who knows.
    About the subsidies: "Well, I think what's important to note is the scale of these fossil fuel subsidies. So fossil fuel subsidies have been, you know, on the order of half a trillion dollars. This is a huge amount of money that's going to support the production and use of fossil fuel energy. At the moment, that doesn't create a level playing field in any way for renewable energy or energy efficiency. What it leads is to increased consumption of energy and also creates disincentives for the production of clean energy. So I don't think we can even answer that question about what would be better to create jobs, because there's just not a level playing field for the production of renewable energy, and also not a level playing field for investors. There are so many more incentives going towards, as you say, investors putting money into fossil fuels, and even risky fossil fuels like we see in sort of new technologies in terms of offshore oil and gas, that renewables just can't compete right now." -Shelagh Whitley, Research Fellow, Overseas Development Institute. (Source: http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=10999)
    We all share the same planet and lets try to make it a beautiful one for future generations also. We owe it to them. “We Do Not Inherit the Earth from Our Ancestors; We Borrow It from Our Children”, as someone once put it. Yes, the fossils have given us so much wellbeing but it’s time move forward. Make room for new business opportunities.
    Best Wishes

  3. CommentedMatt Stillerman

    The increase in atmospheric CO2 is also causing acidification of the ocean. We do not understand the consequences of that acidification. However, one plausible consequence is the collapse of the micro-biome in the top few centimeters of the ocean. This micro-biome, consisting of at least thousands of species, is responsible for about 50% of the oxygen in the air that we breathe. So, as you are reading the economic cost-benefit analysis in Mr. Lomborg's posting, take a nice deep breath, and savor that oxygen.

    Question for Mr. Lomborg: What is the present value of 50% of the oxygen in the air, summed over all future dates? In other words, what would it be worth today, in dollars, to prevent that future? And, can we put a value on a lottery in which we experience that future with some probability?

    Of course, these questions are meant to be ridiculous. Just asking them provides a convincing argument that economics and "the market" is the wrong way to think about existential issues such as our climate policy.

  4. CommentedErik de Ruijter

    the fuel may be cleaner, but the impact on the environment is very, very bad. shouldn't that be in the equation as well ?

  5. CommentedZsolt Hermann

    I think there are many important points in the article worth considering, but I don't agree with the "panic" part.
    The problem is that we still try thinking and solving problems in a linear way, despite science gradually showing us that the reality around us is multidimensional, we exist in a "quantum reality".
    What I try to say is that we have to get used to having contradictory thoughts, emotions, sensations appearing in us at the same time and somehow manage to move forward in between them, instead of falling deep into either side.
    For example regarding the article the author claims we are panicking about climate change and this panic would prevent us thinking, acting clearly.
    I don't think it is true.
    I actually don't think we are panicking enough yet.
    We might be making "beautiful, impressive speeches", we even feel tears in our eyes when some disaster strikes, but the next moment we all go back to our usual program without any changes.
    A real panic would at least freeze our present activities and force us to truly think about our next steps, and such a "freeze" hasn't happened yet.
    We truly need to feel on our flesh that we are already on borrowed time, not only regarding the climate, and the environment, but at every level of human activity. That we have built a completely unsustainable, artificial human bubble within a vast natural system that works the opposite way.
    This recognition should stop our march towards the inevitable abyss and force us to start thinking about solutions, but not the present isolated, self-calculating, subjective way, but in a completely new, equal, and mutually complementing way on the global scale.
    We need to feel the constant fear on one hand, feeling the very actual and real presence of danger, while uniting, cooperating in a mutually responsible and benevolent way on the other side.
    We need to move closer to the true "quantum" perception and that is only possible using the "wisdom of the crowd", a constant, mutual think tank above individual wisdom.
    The truly conscious, free and self-governing human being will emerge in between the fear and the new, globally mutual problem solving.

      CommentedEdward Ponderer

      Indeed we are given the clear model of chaos turned to fractal group sense, communication, and action resulting in the most amazing solutions for successful living communities. On the other end of the spectrum, the unity expressed in the quantum connects subatomic particles, atoms, molecules, and macro-molecules together into the most amazing materials and nano-machines for the members of those living communities. Amazingly, to several bits, humans have already captured the power of this unified "quantum intelligence" -- the organization of QBITs into quantum computer -- in working hardware. A recent breakthrough in the measurement of quantum fluctuations in cellular microtubules gives strong support to the Penrose/Hameroff theory that the mind is a quantum computer housed in the brain's cell network.

      In short, group solution--not individual--is our only hope. As to the nice speeches at Swiss Chalet, we all no that NOTHING real is going to get done that way.

      Do we wish to thrive? At least survive? Even bacterial colonies know the answer to that one--which is why they are becoming so good at outflanking the best antibiotics that individual human minds can come up with.

  6. CommentedJoseph Jaroszek

    how to make the depressing reality of climate change sound that little bit more depressing? why, dress it up in the dryiest economic jargon possible. so 'costs stemming from more heat-related deaths and water stress' will be be 'outweighed by the benefits from many fewer cold-related deaths and higher agricultural productivity from higher levels of CO2.'? I rally hope Copenhagen sinks first. and good luck with 'lifting billions out of poverty' while those poor billions continue to multiply like there's no tomorrow. quite some resilience.

  7. CommentedChris Oestereich

    The "fruits" of higher CO2 levels depend on having enough water to go around.

      Portrait of Bjørn Lomborg

      CommentedBjørn Lomborg

      Dear Garry.

      Thanks for your comment. With regards to cherry picking, you can't just disregard the IPCC expectations for GDP. You write "Particularly unbelievable is his assertion that every person can expect an enormous rise in levels of material well-being by the end of the century" -- yet, this is exactly what is expected in the SRES scenarios. (download them e.g. here: http://bit.ly/N34HXl)

      If you don't believe the incredible increase in per capita GDP especially for the developing countries, then the CO₂ emissions will also be much lower (they are strongly linked to GDP), and consequently the temperature rise by 2100 will be much lower. You can't have a high temperature rise without the GDP increase.

      CommentedGerry Hofman

      That Davos is just an opportunity for jet setting politicians to spend some time at expensive resorts is well reported in the media and hardly need repeating here. But it serves well as a cynical opening to this piece of environment bashing rhetoric. It also ignores the fact that the scientific community's warnings are not about the weather today, but about it's diversions in the future. That Lomborg remains unconvinced does not tally with the scientists, who are extremely sure about their analysis and predictions. The kind of cherry picking of statistics that Lomborg engages in does not encourage a balanced discussion. Particularly unbelievable is his assertion that every person can expect an enormous rise in levels of material well-being by the end of the century, as long as we abandon every effort to mitigate global warming. It shows very clearly where he is coming from. But this piece is not about the environment, it's about politics. And of course there is the benefits of shale gas. But since the cost of drilling a fracking well to the point where has flows is around ten million, and since there are some thirty thousand of them in the US, brings the cost up to three hundred billion to establish the industry. Additionally it is now believed that a fracking well may only have a productive life of five to ten years, before the gas flow drops away. Compare that to the reported one hundred billion in benefits and then tell me where the savings are. This is the kind of arguing Lomborg uses to distort the facts every step of the way. But then this is not about fracking, as there is an entirely new industry waiting to kick off. This is UCG or underground coal gasification, where whole underground coal seams are set on fire to drive out the gases, whish are then collected for further use. This will far exceed all fracking operations combined, but to get it going all environmental considerations must be very firmly stomped into the ground.

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