Discounting the future

This is a guest post by Rachel


Whether or not we should do something about climate change is often evaluated in terms of costs and benefits. If the benefits of doing something outweigh the harms, then this would give us a reason to do something about it. If the costs of mitigation are greater than the benefits, then this leads people to argue that we should do nothing or little about the problem. But disagreements arise because we can’t agree on how much these costs and benefits are. Most of the harms will be inflicted on future generations and some people think that the way in which these harms are currently being calculated is inaccurate at best, unethical at worst.

One assumption which is often made in these cost-benefit analyses is that future harms and benefits are worth less than harms and benefits which occur today. Philosophers call this discounting the future and they seem to disagree with economists on the merits of discounting in this way. They argue that whether something is good or bad has nothing to do with the time in which it happened. Harms are just as bad regardless of whether we endure them today or the people living 100 years from now endure them.

There are however some arguments in favour of a certain degree of discounting which seem reasonable to me. I’ve just read quite an interesting paper called On discount rates in the cost-benefit analysis of climate change. The author makes the case for the pricing and therefore discounting of commodities rather than harms and benefits directly. If we want to compare the prices of things at different times then we need to adjust them in ways that make such comparisons accurate as commodities change in price over time. So this seems fair enough to me.

He also argues for what is known as decreasing marginal value. This is when stuff becomes less important to us as we get more of it. For instance, our fifth computer is going to be less beneficial to us than our first or second. If people of the future have more stuff, then the benefits of additional stuff will be of less value to them than to people who have less stuff. I’ve heard other people argue something similar: future generations will be wealthier than us and so this is justification for discounting the costs and benefits we leave to them. The philosopher Derek Parfit disagrees with this and says “These two arguments do not justify a social discount rate. The ground for discounting these future benefits is not that they lie further in the future, but that they will go to people who are better off“. ( source: http://faculty.smu.edu/jkazez/parfitsocialdiscountrate.pdf)

I think what Derek Parfit is saying is that by discounting on the basis of time, we are not being true to our reasons for discounting, which are that people are wealthier and not that they live in the future. Luc Van Liedekerke says “A social discount rate is only justified when it exactly traces the growth process in future welfare, if not, the discount rate leads us astray“.

Another argument made in favour of social discounting is that future risk is uncertain. Derek Parfit calls this the argument from probability. He says that “Predictions about the further future are not less likely to be true at some rate of n percent per year. When applied to the further future, many predictions are indeed more likely to be true”.  I think what he’s saying is that when we justify an outcome because it is uncertain, our reason is not because it occurs in the future, but because it is uncertain.

It took me a while to understand this so I’ll elaborate with the example that Parfit gives. Suppose some radiation is going to escape from somewhere and potentially cause a billion deaths in 400 years. If we discount those deaths at 5% per year, then a billion deaths in 400 years is worth less morally than one death next year. This is indefensible. However, if we use the argument from probability, we can say that it’s possible that over the next few hundred years, humans will develop the technology to resolve this problem and so the billion deaths becomes less likely. It’s therefore not a case of the interests of a billion people 400 years hence counting for less, but that the probability of their deaths is a billion times less likely to occur. Parfit says that “It is therefore a mistake to discount for times rather than probability“. This explained well by Liedekerke:

We ought not to discount over time but over probabilities. When we discount over time we misrepresent our reasons for discounting, suggesting that we attach lesser importance to what happens in the future while in fact we attach lesser importance to what is uncertain. Now one could argue that the further you go in time, the more uncertain outcomes become, so time discounting would in fact amount to probability discounting. But not only would this give a misrepresentation of our real views, but it is also very unlikely that probability discounting is in all circumstances the same as time discounting; and if it is not the same, time discounting will point to wrong conclusions.

I accept that maybe some discounting is useful, discounting commodities for instance, but it seems to me that some of the other things we discount on the basis of time, are unjustifiable and at odds with our reasons for discounting them in the first place which suggests to me that our conclusions are probably wrong.

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150 Responses to Discounting the future

  1. Since this topic has come up, maybe some of the bright people who comment here can answer a simple question for me. Various people on Twitter yesterday (Bjorn Lomborg for example), where saying things like “climate change will only cost 2% of GDP, mitigating will cost 6%, we need better ideas”. I realised that I have no idea what these numbers really mean.

    For example, if someone says “climate change will cost x% of GDP”, what do they normally mean? GDP is a measure of economic activity. Do they mean we will be spending x% every year on adapting to and recovering from climate change related effects? Do they mean GDP will be x% smaller than it would be in the absence of CC? Somethingelse altogether? Also, what are the assumptions about future growth, etc.

    Similarly when we compare the costs of CC and the costs of mitigating (as Lomborg seems to do) are we comparing like with like. What we spend on mitigating is still an economic activity, so will contribute towards GDP (although, it may not be the most efficient spend of that money). If climate change acts to reduce GDP, then comparing the percentage reduction in GDP with the cost of mitigating, seems like an incorrect comparison. Again, maybe I’m just confused about what these numbers mean.

  2. johnrussell40 says:

    I think projections of the damage climate change will have on GDP are fumbling in the dark, though the economists who make them are incredibly arrogant in their belief they know what they’re talking about.

    If for instance agriculture represents 5% of UK GDP and there’s a 20% reduction in production due to climate change impacts then it would seem on the surface that we’ve just lost 1% of our GDP. But of course climate change won’t just impact UK’s agriculture; it’s likely to have a similar or worse impactt in other countries. Which means, simplistically, that there’s no longer any spare food available to import and worldwide food prices go through the roof. Now consider what effect a 20% reduction in food home grown food supplies, a shortage of imported foodstuffs and the resultant overall massive hike in food prices would have on the rest of UK industry and commerce. Can we really imagine GDP just falling by 1% in these circumstances?

    We need to learn lessons from the Arab Spring: http://www.scientificamerican.com/article/climate-change-and-rising-food-prices-heightened-arab-spring/

  3. john,
    Indeed. I also think there’s often a confusion about comparisons. Consider your scenario in which climate change impacts agriculture so that rather than it making up 5% of GDP, it’s 4%. So, it’s reduced GDP by 1%. Consider an alternative where we can sustain the same level of agriculture, but it will cost 6% of GDP rather than 5% – i.e., it costs 1% more of GDP than before. I think many regard these as the same when – as I see it – they’re not. If we spend 1% more on something than before, that extra spending still employs people and generates economic activity. If GDP reduces by 1%, then that means less economic activity and people out of work. I realise that there are subtleties to this, but I get the sense that people often see a reduction in GDP as equivalent to an increased cost. I think this is incorrect, but maybe I’m wrong.

  4. Rachel says:

    AndThen,

    I am curious to know the answers to your questions too because I don’t really understand it either. I did have a look at chapter 10 of the recently released IPCC report though – Key economic sectors and services, and it puts the economic losses globally at between 0.2 and 2.0% of income once the temperature reaches 2.5°C. This is with medium agreement and medium evidence according to the report. The report then goes on to say that “Impact estimates are incomplete and depend on a large number of assumptions” although it does not say what these are.

  5. Tom Curtis says:

    Anders, from the WGIII Summary for Policy makers, mitigating climate change to prevent CO2 increases above 450 ppmv will cost 4.8% of consumption by 2100. That gives us a 66% chance of temperature not rising above 2 C. There will be an additional cost from the impacts of climate change at plus 2 C of 1.1% of incoome (WGII, Chapter 10). That get’s the 6%.

    With no mitigation (RCP 8.5), however, temperatures will rise to plus 3.7 C by 2100, plus 6.5 C by 2200, and plus 7.8 C by 2300 (WGI, Table 12.2). The IPCC does not give costs for those temperature rises that I am aware of. However, Tol (2012) does give PDFs for costs for temperature increases of 2, 3, 5, and 10 C, with median values of approximately -0.3%, 2.9%, 16.7% and 95.6% of total income respectively. There is a slight mismatch between temperature baselines, with IPCC projections in terms of temperature change since 1750, while the economic costs are for temperature change from recent temperatures. Ergo, for BAU we have a median expectation of loss of total income of about 2.9% by 2100, 16.7% by 2200, with a near 50% chance for total loss of all income (100% loss) by 2300.

    Regarding the estimates of income loss, the IPCC says:

    “Losses are more likely than not to be greater, rather than smaller, than this range (limited evidence, high agreement).”

    Further, at 2100, the 95% projection for BAU is plus 2.6 to 4.8 C. Because total cost rises rapidly with temperature, expected value of BAU is higher than the approx 2.9% of income median estimate – probably significantly higher.

  6. Tom, thanks. I think that answers my question. I think it also suggests that when someone says climate change will cost x%, that this is an actual reduction in GDP/economic activity. The y% that we spend to avoid this is, however, an economic activity and hence doesn’t necessarily imply a reduction in GDP/economic activity. Therefore suggesting that we shouldn’t spend y% mitigating because it’s bigger than the x% losses due to global warming seems – at best – simplistic. We may well want to spend more than x% to avoid a reduction in economic activity of x%.

  7. Tom Curtis says:

    Anders, I’m not sure whether that is the correct take, or not. Personally, I am intrigued by the fact that costs of mitigation are reported as reduction in consumption; whereas costs of climate change are reported as reduction of income. If “consumption” does not include investment, than a 10% reduction in consumption is < a 10% reduction in income. If that distinction, and conclusion is valid, that would support what you are saying (and be a different way of saying the same thing).

    However, I suspect many economists would accuse you of making the glazier’s fallacy, and reject a meaningful distinction between consumption and total income in this context on those grounds..

  8. verytallguy says:

    Tom,

    Ergo, for BAU we have a median expectation of loss of total income of about 2.9% by 2100, 16.7% by 2200, with a near 50% chance for total loss of all income (100% loss) by 2300.

    The acronym CAGW is often bandied about, and it’s often pointed out that this is a strawman.

    However, your sobering sentence seems like a pretty good definition of what catastrophic means in this context.

    Also, it’s instructive to think about timescales. Your figures suggest net cost this century is not that high, but costs rise massively beyond that. It’s instructive that many contrarians focus on costs to 2100, by which time it will, of course, be too late to prevent those massive costs.

  9. Tom,

    However, I suspect many economists would accuse you of making the glazier’s fallacy, and reject a meaningful distinction between consumption and total income in this context on those grounds..

    Quite possibly. I shall have to have a look into that. It wouldn’t be surprised if there is some reason why my reasoning is flawed. However, it does seem that the simple y% > x% argument is also probably flawed.

  10. Tom,
    I’ve had a look at your link, and I agree that increased spending in one sector can – and will – have an impact on other sectors of the economy. So if mitigating will cost y% of GDP, that could imply that it is simply a change in economic activity and that this won’t effect overall GDP. However, given that this y% implies some change in another economic sector (given that the spending has to come from somewhere) it could imply some kind of overall effect on GDP. However, it seems that spending y% on mitigating doesn’t immediately imply a reduction of y% in economic activity. Therefore it does seem that directly comparing the cost of mitigating with the cost of climate change in the absence of mitigation is – at best – simplistic.

  11. jsam says:

    Many of the “costs” of climate change will increase GDP. Building flood defences is an increase in economic activity and an increase in GDP. It’s a measure of how frenetic the anthill is.

  12. AnOilMan says:

    Much of the strict cost of mitigating climate change is portrayed just as a sunk cost. I disagree with that. It will cost more for energy (based on using current numbers), but those costs are being fed into jobs and manufacturing. Personally, I’d hardly notice the difference in my electricity bill.

    The other thing is that the sooner you start weening yourself off fossil fuels, the more gentle the impact is on the economy and the pocket book. If you do this later, or gosh (likely) in a knee jerk reaction to a bad weather event, the most painful and costly it will be to deal with.

    This is my favorite ad for solar panels (This ad is running in places where electricity costs more than solar);

    For a comparison question… How many people started saving for retirement when they were 20? 30? 40? Gosh… I Gotta save $100k a year to make up for lost time now!

  13. The ground for discounting these future benefits is not that they lie further in the future, but that they will go to people who are better off“.

    That has a paradoxical consequence. A high discount rate thus means that you do not mind redistribution of wealth from (future) rich to (present) poor. Somehow the libertarians that live as if the future is not important (high discount rate) are normally against redistribution (low discount rate).

    Rachel really helped me think about this problem. Thanks. This econtalk on the discount rate is also interesting. If only for having to hear the libertarian host suffer for having to stay polite to a guest with such weird mainstream scientific views on climate change.

    Robert Pindyck of MIT talks with EconTalk host Russ Roberts about the challenges of global warming for policy makers. Pindyck argues that while there is little doubt about the existence of human-caused global warming via carbon emissions, there is a great deal of doubt about the size of the effects on temperature and the size of the economic impact of warmer climate. This leads to a dilemma for policy-makers over how to proceed. Pindyck suggests that a tax or some form of carbon emission reduction is a good idea as a precautionary measure, despite the uncertainty.

  14. I’m getting more and more convinced that the real justification for the use of a discount rate is that the benefits from most investment decisions made today decrease with time as the conditions change from those considered at the time of the decision and as people make their future decisions to adapt to the conditions of the time of the decision.

    While I consider certain that declining benefits are true for most investments, there may be cases where the opposite is true as discussed by Thomas Sterner and others. (I have related comments in the earlier “Tolgate” thread.)

    I mention above investments. Sometimes the word savings or reduction in consumption is used. They mean largely the same thing as all real savings mean that something real is left for future. It’s not possible to save money, when we consider the global economy.

  15. Rachel says:

    Victor,

    Somehow the libertarians that live as if the future is not important (high discount rate) are normally against redistribution (low discount rate).

    I guess they don’t mind redistribution when they are the beneficiaries. 🙂

    AnOilMan,
    The dolphin babies commercial is good!

  16. Great post on an interesting topic. However one of the rules of thumb I try to follow is that if I can think of some issue in some field, probably somewhere in the centuries of history of that field, somebody thought of it before I did. (As an example, you’ll often hear some ‘sceptic’ point out that melting ice floating in water doesn’t raise the water level, therefore melting sea ice won’t raise sea level. Well, guess what? Scientists already thought of that. In fact that’s how ‘sceptics’ know it in the first place(*)).

    Similar is true in economics. I’m pretty sure it has the tools to think about these things and economists are already aware of the issues mentioned. But it’s interesting to think about anyway.

    Regarding the effect of some hazard distant in time, I think it’s easy to see that if someone plants a bomb timed to go off in a few weeks time, it wouldn’t make any moral difference if it were to kill someone who wasn’t even born when they planted it. It’s not obvious that it should make any difference if it was timed to go off in 200 years time either. Nor is it obvious if it should make any difference if there is only a chance it will go off, even if that chance is small.

    Other cases are not so clear.

    Should you build a bridge across the San Francisco bay? After all it might collapse in the future and kill many people. Bridges have collapsed before. By this logic the Golden Gate bridge should not exist. But nobody would say that it shouldn’t, so there is some kind of cost/benefit trade off.

    Climate change is similar but much harder. If you could wave a magic wand and provide the people of the 3rd world with air conditioning and electricity and all the benefits of fossil fuels, would you? It would certainly save many lives right now, at the cost of increased emissions and risk in the future.

    That’s more like the cost/benefit trade off of fossil fuels vs CO2 rise. And it does seem to make sense that we should look for the amount of emissions at which the costs exceed the benefits, i.e. in any solution there will be *some* climate change.

    (*) In fact as far as I know this is *not* actually true of sea ice melt. There is a slight effect.

  17. Arthur Smith says:

    I just wanted to say thanks to Rachel for posting this, I’ve been a fan of Parfit’s for a while, though just read one of his books (“Reasons and Persons”) – for those who think philosophers don’t do anything useful, he’s a great counterexample, very thought-provoking on many issues.

    I am wondering though how this concern about probability plays out in practice. I mean, how can we know with any degree of certainty what future generations will be capable of? If we mess things up too badly, they may not be able to even have access to some of the capabilities we have now, 100 or 200 years down the road. So you assign some probability to the different trajectories for humanity, I guess, and then try to optimize? It seems horribly tricky…

  18. Rachel says:

    Thanks, Frank. Your comment has reminded me of a question I had when I was writing this post but that I decided was too dumb to include in it. Here it is:

    One argument for business as usual is that people of the future will be richer than us which is a reason for using a social discount rate. Parfit responds to this by saying “Some of our successors may not be better off than we are. If they are not, the arguments just given fail to apply”. Economists would respond to what Parfit says by saying that high emission scenarios are based on the assumption that people are richer – i.e. economic growth drives fossil fuel emissions and so high emission scenarios assume that developing countries are emitting higher amounts of fossil fuels.

    Is it possible for countries like China and India to become much richer and to contribute enough greenhouse gases such that emissions are at the high end of projections, while some places, in Africa for instance, remain poor? Is it possible that every country is going to become richer or will some become richer while others remain poor?

  19. Rachel says:

    Arthur,
    I was wondering about that too, or something similar anyway. Suppose people in 200 years are richer than we are but that we messed things up so badly that their quality of life is not as good as ours today. I don’t think it’s always true that our quality of life improves as we become richer. Up to a point it does, but beyond that, no. It could be that the frequency of floods and extreme weather events has caused a degree of psychological distress which no amount of money can improve. Or perhaps the natural world has changed so significantly that much of its beauty and enchantment has vanished. When economists make projections of future wealth, do they include factors related to wellbeing like these?

  20. Rachel,
    Many of the links of the Tolgate thread were on including issues like that.

  21. I think in any of the analyses I have read (which is not that many) they conclude that even where there is a net benefit or a net zero there will be winners and losers, the winners broadly speaking being richer countries and losers being poorer ones. The IPCC report also says something to the effect that the GDP figures mask such differences. Hence equity weighted results come out different, for example (go back to the Tol study discussed on another post, the one that finds a net benefit from modest warming, and the equity weighted answer is 0). So it’s not like nobody knows this or nobody is drawing attention to it.

    One other example that occurs to me – think of the cost/benefit trade off of cars. We accept cars on the road right now even thought they kill vast numbers of people worldwide, many of them children. This is something that seems obviously wrong yet not having cars at all would probably be worse. Bicycles are another one…many people would consider cycling dangerous even though on average people who cycle will live longer (due to the exercise etc.).

    So it’s not just economists that make these trade offs that are peculiar at first sight. 🙂

  22. Mark Bahner says:

    Hi,

    This is a very interesting post. I have some posts on my blog that address some of these issues:

    http://markbahner.typepad.com/random_thoughts/2013/03/my-entry.html

    http://markbahner.typepad.com/random_thoughts/2013/04/a-few-more-predictions-for-the-21st-century.html

    http://markbahner.typepad.com/random_thoughts/2014/04/do-people-of-2100-have-a-right-to-be-pretty-angry-about-global-warming.html

    The basic gist of my blog posts is that:

    1) It’s likely that the people of 2100 will be far better off than the people of 2014, and therefore it’s of questionable morality for the people of 2014 to sacrifice for the benefit of the people of 2100; and

    2) Even if global warming does turn out to be much worse than expected, the people of 2100 can spend approximately 10 percent of their GDP (i.e., about what the U.S. spent, on average, on the military, for four decades following the end of WWII) and get the global CO2 concentration down to the pre-industrial level of 280 ppm in about 4 decades.

  23. Rachel says:

    Pekka,
    I’m looking in that thread now but I can’t see anything at first glance. Is there stuff about this in one of Richard Tol’s papers? I must admit I didn’t read any of those 🙂

  24. The paper of Fleurbaey and Zuber is on that, so is Sterner and Persson (no link, but title to search for). These papers are no easy reading, but they tell about the interest economist have on these issues. I really hope I can explain the issues more in near future, but that requires more than commenting here. Most probably I post on my own site, and give a link to that here as well. Cross posting for easier discussion would be possible.

  25. Rachel says:

    Frank,

    …they conclude that even where there is a net benefit or a net zero there will be winners and losers…

    I agree with what you say and with your point about cars and tradeoffs. But I’m not sure that it answers my question. What I’m wondering is this: if we give as our reason for business as usual that future people will be richer; and if it transpires that some future people are not richer; then does this invalidate our reason for business as usual as Derek Parfit suggests?

  26. Rachel says:

    Thanks, Pekka. I’ll have a look. You’re welcome to submit a guest post on the topic. So far no-one has sent me any posts, although there has been a bit of interest.

  27. ” if we give as our reason for business as usual that future people will be richer; and if it transpires that some future people are not richer; then does this invalidate our reason for business as usual as Derek Parfit suggests?”

    Well if our best information is that people will be richer and it transpires that they aren’t, then I don’t think it does. I don’t think we can be criticised for acting on the best information we have. It would be like criticising a surgeon for operating, or not operating, based on this being the best bet for the patient, even though it transpired that (against the odds) the patient died.

    You also have to compare to the other options. If we were to apply the precautionary principle too aggressively then (to take an extreme case) we would halt all emissions and that would be disastrous. Not only for us but for future people also.

  28. Rachel says:

    Frank,

    Ok, yes, I see your point.

    I made a mistake in my previous comment by suggesting that this is what Derek Parfit’s argument is and that’s not exactly right. His main point is that a social discount rate which discounts harms and benefits over time, does not address our reason for discounting in the first place which is that future people are richer and not that they live in the future. So adjusting over time is unjustified. We should address what we mean.

  29. Mark Bahner says:

    “It could be that the frequency of floods and extreme weather events has caused a degree of psychological distress which no amount of money can improve.”

    I’m willing to test that hypothesis. Give me $10 million, and then you can flood my house once a decade. 🙂 (Seriously. I’ll even settle for $5 million, and you can completely destroy my house every decade.)

  30. “our reason for discounting in the first place which is that future people are richer and not that they live in the future. So adjusting over time is unjustified. We should address what we mean.”

    The two are closely related though so it’s not really obvious that the discounting is done over time for time’s sake.

    I’m not even sure that we really discount benefits to richer people generally. We don’t quite do it for richer people now, never mind the future. Most richer people don’t even do it for themselves. Millions subsist on US$2 a day but we will happily buy a cup of coffee or a gadget instead of donating to efforts against easily treatable diseases, for example. We certainly spend far more on family, friends, citizens of the same country, etc, than we do on others, poorer or not. You don’t have to look to the future to find many examples of this.

    At the same time (as Steven Pinker argues in his book ‘the better angels of our nature’) our circle of concern is getting bigger as time goes by, e.g. we nowadays worry about things like universal human rights which would have seemed peculiar centuries ago, and we even extend rights somewhat to other species. It’s possible that some of the ways we value things now will look as odd to people of the future, as some of the values of the past look to us.

  31. Tom Curtis says:

    Frank O’Dwyer:

    ” I don’t think we can be criticised for acting on the best information we have. “

    I don’t think the results of Integrated Assessment Models are “the best information we have”. The models are very simplistic, have prescribed economic growth, and neglect major areas of concern with regard to damages from global warming. I think their results are should be described as “best case estimates” rather than “best estimates”.

  32. AnOilMan says:

    Mark,

    You make a lot of claims about the economics of Climate Change, yet I seriously doubt their veracity.

    First, there is the assumption that some how it will me a nice smooth predictable path forward. Nothing we’re seeing indicates that to me. We may have more interesting discoveries on the way.

    Second, you also claim that we’ll be wealthier and able to afford rapid repair with a mere 20% GDP… I think I can hear the howling from future Libertarian think tanks all the way to here. In the mean time we’re looking at all the escalating costs associated with Climate Change damage and repair. Although I think your proposal to do nothing would earn Bjorne Lomborg’s approval.

    Third, you’ve assumed that it will all just reverse nicely back to something nice and useful. I doubt that. I wonder if dried up desiccated dirt blows in the wind… Ah yes it does…

    Lastly, you’ve essentially decided ahead of time to financially liquidate whole swaths of population. “Be a good sport and loose everything you own… I want another martini.” We’re not even getting in to damage to food supplies for the third world. They are staring down some grim prospects indeed.

    Your financial arguments are based on global and essentially western money. The third world is looking at comparatively fast depletion of food, and double digit GDP looses. If I told you that the developed world was facing the same prospect would you still propose doing nothing?

  33. Tom,

    “I don’t think the results of Integrated Assessment Models are “the best information we have”. The models are very simplistic, have prescribed economic growth, and neglect major areas of concern with regard to damages from global warming. ”

    I didn’t say they were. I think the information we have includes what is left out and all the rest.

    But I also think economists know that and in fact they are the ones who tell us what is left out and what is assumed, and so on. A lot of the objections to the economic approach (“What about catastrophic risk?) are probably not much better than when a ‘sceptic’ says to a climatologist “What if it’s the sun? Didn’t think of that, did ya?”. Or compare to the complaints about climate models.

    Having a model isn’t optional. Those who don’t want us to use mainstream models usually implicitly appeal to some other model instead (which often means consulting their own bowels). If you want to say some model is too simplistic you need to point to a better model.

  34. John Mashey says:

    People might peruse the discount rate hole discussion over at Rabett Run a few years back.
    1)Having asked various IPCC folks and others where the GDP growth projections came from, and
    2) finding they were based on the past century, when
    3) there was a huge increase in energy, mostly from fossil fuels
    4) And noting that Ayres and Warr had pretty good arguments that much of the GDP growth, especially Total Factor Productivity (or Solow Residual) of neoclassical econ, was attributable to:
    work = energy used * efficiency and
    5) If FF use decreased (either because of climate constraints or things like Peak Oil)
    6) then the discount rate could go negative

    A lively discussion ensued, showing that some people were totally clueless, others not.

    Amusingly, an economist showed up and pointed at several of his papers that said the discount rate could go negative.

    Try Ayres & Warr(2008) The Economic Growth Engine, probably from library.

  35. AnOilMan says:

    Initial value problems always cause some concern.

    Consider Mark Bahner’s agreement that we could simply afford the fix things in 90 years or so. But clearly, in the west, we’ve already had tremendous positive benefits from cheap oil, for a hundred years or so I think. We’ve had to suffer tremendous loss of lives, and livelihoods, and continue to suffer a high death rate from pollution and now looking at long term and possibly permanent damage to the environment.

    Clearly using his logic, we can easily afford a 20% hit to our GDP right now. What have we got to complain about? We had such huge growth for the last 100 years, that we can easily afford to spend anything necessary. Our use of coal is harming our populatio, fracking is poisoning our ground water, and finally we can do something about all those tailings ponds.

    If someone had said that 100 years ago, would we care today? What would conservative right wing think tanks say to it today? Listen to our forefathers?

    Let the frog boil some more…

  36. Rachel says:

    Frank,

    The two are closely related though so it’s not really obvious that the discounting is done over time for time’s sake.

    Yes, there is something of a relationship there but it’s only rough. Consider how we might give special weight to people who are near to us – our children and our grand-children. A temporal discount rate would see increasingly less concern given to more and more distant generations. But what we really want is a discount on the basis of kinship rather than time. Why should our successors living in 100 years be given more weight than those who live 150 years from now? Or as Parfit says “But should effects on the fifth generation concern us more than effects on the sixth?”. If we accept that some sort of kinship discounting should occur, then shouldn’t it level off at some point?

    A lot of the objections to the economic approach (“What about catastrophic risk?) are probably not much better than when a ‘sceptic’ says to a climatologist “What if it’s the sun? Didn’t think of that, did ya?”.

    I don’t really want to agree with this either but this could be because I find myself objecting to being compared to climate change “skeptics”. 🙂

    I’ve also had a bit of look at some of the papers Pekka mentioned above and it seems to me that there is quite a bit of discussion about these topics in academia so comparing it to “What if it’s the sun?” type-arguments seems unfair. One of the papers is quite interesting and I’m not going to pretend I understand it but here’s an excerpt – Climate policies deserve a negative discount rate

    We now come to the main thesis of this paper. Why should climate policies be evaluated with a negative discount rate? The person‐to‐person discount rate is negative when the present donor is richer than the future beneficiary. Given the above result, if we consider long‐run policies, the discount rate should be negative when the poorest contributors to the policy are richer than the poorest beneficiaries. It is plausible that many climate policies satisfy this condition. Mitigation efforts, when they are well conceived, should put the burden on the high emitters who are typically among the affluent members of the present generation, but they will benefit many members of future generations. Moreover, it is often said that the most vulnerable to climate change are the poorest, so that many beneficiaries in the future will be among the poorest of their generation. Can we hope that the poorest of future generations will be better off than the middle class of the present generation? This appears, sadly, unlikely. Therefore climate policies that avoid imposing a burden on the poor members of the present generation deserve to be evaluated with a negative discount rate.

    This paper is interesting too and note how they mention in the quote below that discounting should be made according to rank rather than time – Probability adjusted rank-discounted utilitarianism

    This dilemma – that the ethically commendable requirement of equal treatment
    seems to lead to extreme prescriptions when applied in actual criteria of intergenerational
    equity – is a main motivation for rank-discounted utilitarianism (RDU), proposed and analyzed by Zuber and Asheim (2012). RDU discounts future utility as long as the future is better than the present, thereby trading-off current sacrifice and future gain. However, if the present generation is better off than all future generations, then priority shifts to the future. In this case, zero relative weight is assigned to present utility. The criterion of RDU can therefore capture the intuition
    that we should be more willing to assist future generations if they are worse off than us, but not to save much for their benefit if they turn out to be better off . RDU is compatible with equal treatment of generations as discounting is made according to rank, not according to time.

  37. ‘ A temporal discount rate would see increasingly less concern given to more and more distant generations. But what we really want is a discount on the basis of kinship rather than time.’

    Just a quick response on this bit. A kinship discount rate would be even faster. You would not have to wait many generations before the chances of a descendant receiving even 1 gene from you is effectively zero. You would probably have a similar level of kinship with a tenuous cousin or random stranger living today. But nobody says their interests should be completely discounted except perhaps when they conflict with those of close kin. So I’m not sure what Parfit is arguing against here, I don’t think it is an argument anyone really makes.

  38. Steve Bloom says:

    A lot of the objections to the economic approach (“What about catastrophic risk?) are probably not much better than when a ‘sceptic’ says to a climatologist “What if it’s the sun? Didn’t think of that, did ya?”.

    No, since climatologists have carefully considered solar influences and all too many economists ignore plausible catastrophic risks because they’re too difficult to model.

  39. Steve Bloom says:

    It’s instructive to imagine economists on Easter Island calculating discount rates prior to the collapse.

  40. johnrussell40 says:

    The eternal optimists (Mark Bahner) who just think things get better and better endlessly just drive me nuts. There’s nothing to support that belief. We’ve been selling the family silver for the last two hundred years and there’s a point it all runs out. The world’s resources are finite. More pertinently, there’s a point at which the planet can no longer continue to deal with our pollution and discarded waste without long-term damage occurring. It’s just a matter of time.

  41. Tom Curtis says:

    In fact, a kinship discount rate is actually slower. Individually, it depends on the times between each generation, and how many descendants we have. Thus, after three generations, each descendant has approximately 12.5% of our genes (ignoring incest, and the distribution of genotypes in the population). That means, however, that if we have 9 descendants in that generation, we should give the period of that generation a value 12.5% greater than our own. That estimate assumes, of course, no overlap between generations. Typically humans overlap by three generations so that complicates things, and increases the value placed on each year by the kinship discount.

    Of course, we don’t know how many descendants we will have in each generation. Therefore it is reasonable, at least for times 50 years in the future, or more, to assume our descendants will match the average number of human descendants after that period. It follows that we should apply a discount to each year equal to population growth times 0.5^((pojected year – current year)/average generation time). With zero population growth, and a generation time of 35, that approximates to an annual discount rate of 2%. An annual discount rate of 3% with zero population growth approximates to a kinship generation time of 22.5 years.

    Frank suggests we would not have to wait many generations until we only passed on one or so genes to our descendants. It turns out that it would take, on average, 15 generations for that condition to arise with respect to protein coding genes (excluding those from mitochondrial DNA), or over thee hundred years even with short generation times of 22 years. More interestingly, you have to go back 5 – 10 thousand years to find a human ancestor such that all modern humans are equally their descendants – ie, the point at which genetic ancestry truly washes out.

    Finally, this little discussion reveals two clear problems with kinship discounting. The first is that it positively favours having large families if things can be presumed to be getting better. That is probably counter productive. Further, we do know something about our potential future number of descendants in that first world nations generally have a slightly declining reproduction rate. Their populations only continue to grow due to immigration. In contrast, most third world nations have strongly growing populations from reproduction, and will continue to do so for some time. Therefore there will be a marked disparity in kinship discount applied between first and third world nations.

  42. izen says:

    @-Steve Bloom says:
    “It’s instructive to imagine economists on Easter Island calculating discount rates prior to the collapse.”

    They would have just figured out that the new stone field agricultural system they had adopted could sustainably support the growing population when strange people in big boats arrived and started abducting the young men and women and the babies starting dying from some coughing disease…

  43. Frank, from the econtalk discussion, I have linked above, I got the impression that economists do not agree on the right value for a discount rate and do not even know how the problem could be resolved. In this respect, I do not see the discussion on the discount rate here as similar to the nonsense below a WUWT post.

  44. Mark Bahner says:

    AnOilMan writes to me, “You make a lot of claims about the economics of Climate Change, yet I seriously doubt their veracity.”

    You doubt their “veracity.” You think I know some truth that I’m not telling? What’s that?

    He continues, “First, there is the assumption that some how it will be a nice smooth predictable path forward.”

    I don’t think it will be a “nice smooth predictable path forward.” Among significant downside possibilities are: thermonuclear war, nuclear or biological terrorism, takeover by terminators, and massive unemployment, due to machines being less expensive/better workers than humans. If any of those things happens, I doubt climate change will be high on the list of priorities.

    “Second, you also claim that we’ll be wealthier and able to afford rapid repair with a mere 20% GDP… I think I can hear the howling from future Libertarian think tanks all the way to here.”

    I don’t think you know Libertarians as well as you think you do. You obviously aren’t familiar with *Article I* of the “Bill of No Rights”:

    “ARTICLE I — You do not have the right to a new car, big screen TV or any form of wealth. More power to you if you can legally acquire them, but no one is guaranteeing anything.”

    http://uncyclopedia.wikia.com/wiki/United_States_Bill_of_No_Rights

    No one has ever been born into a perfect world. And no one has any right to expect to be born into a perfect world.

    “Although I think your proposal to do nothing would earn Bjorn Lomborg’s approval.”

    When did I propose to do “nothing”?

    “Third, you’ve assumed that it will all just reverse nicely back to something nice and useful. I doubt that.”

    You doubt that, if the CO2 was lowered to the pre-industrial level of 280 ppm, the earth would cool off?

    “Lastly, you’ve essentially decided ahead of time to financially liquidate whole swaths of population.”

    I question your veracity. I wrote/advocated no such thing.

    “The third world is looking at comparatively fast depletion of food, and double digit GDP looses.”

    Are you saying that the “third world” (assuming there even is such a thing in 2100) will be less well off than the third world of today?

    You’ve questioned my claims of the future. Right back at you…I question yours. I challenge you to make your own predictions corresponding to my predictions:

    http://markbahner.typepad.com/random_thoughts/2013/03/my-entry.html

  45. Mark,

    Among significant downside possibilities are: thermonuclear war, nuclear or biological terrorism, takeover by terminators, and massive unemployment, due to machines being less expensive/better workers than humans. If any of those things happens, I doubt climate change will be high on the list of priorities.

    Why isn’t climate change itself one of your possible “significant downside possibilities”?

  46. johnrussell40 says:

    Mark; your predictions appear to be based on nothing of any substance.

    If you believe returning atmospheric CO2 concentrations down to 280ppm will cause the Earth to “cool off”—assuming you mean ‘back to normal by 2100’—then I think you don’t understand the science. There’s a hell of a lag built in to the mechanism and anyway, the chances of humans bringing about the sort of changes necessary in the required time scale is rather pushing it, especially considering the unwillingness of nations to man-up to the problems since the first climate conferences back in Geneva, February 1979, flagged them up. And frankly the costs of battling climate change, including relocating or defending cities from sea level rise, will leave very little in the kitty to bring about the sort of improvements in average wealth you seem to take as a given. Add to that the fall-off in crop yields as a result of drought and flooding and I think a growing global population is going to be rather preoccupied with just feeding themselves.

    Pessimistic? Maybe. But I don’t see many reasons to be optimistic, the way things are going.

  47. AnOilMan says:

    Who makes the decision about what the climate in another country should be? As a Canadian, you should know that I wold prefer if America was a desert wasteland. It would positively wonderful for me up here. I could suntan any time of year.

    Mark is neglecting that by performing a live experiment on this planet, we are discovering a lot of bad things. With no cold winters in Canada anymore… Pine Beetles are eating our forests, and driving people out of work. Telling people they can have their old jobs back in 200+ years, is crazy. In the mean time those people are being financially liquidated. (Psst… wanna buy in house in a dead town? Their cheap…)

    Mark is also neglecting that it took hundreds of thousands of years for the climate system to arrive at the approximate state that it is now. You can’t just cook it, destroy it, and assuming that cooling it off later will bring you back to where you were. When we anneal anything, we do it to permanently change its state.

    Mark is assuming that there are no more unknowns in his desire to experiment with our climate system In fact, we keep discovering worse and worse things.

  48. jsam says:

    Economic models are far worse than climate models. Economists have predicted seven of the last three recessions. http://www.neweconomics.org/publications/entry/model-behaviour

  49. dhogaza says:

    ATTP:

    “For example, if someone says “climate change will cost x% of GDP”, what do they normally mean? GDP is a measure of economic activity. Do they mean we will be spending x% every year on adapting to and recovering from climate change related effects? Do they mean GDP will be x% smaller than it would be in the absence of CC? Somethingelse altogether?”

    Among other things, they mean that (for example) the Great Barrier Reef has no value. Well, except perhaps tourism and fishing income.

    I don’t think that it’s a big mystery as to why ecologists and economists look at the future costs of global warming very differently.

  50. I have mentioned a couple of times that I’ll try to get my thoughts on discounting in order. Now I have got far enough to present them on my own site. Those of you interested enough in trying to understand, what my post of possibly heavy reading is trying to tell are welcome to criticize my way of thinking and my conclusions. The post is strictly technical in its goals. The issues discussed are of some relevance on the climate related decision making, but on this stage I do not make any claims on what the effects would be.

    I thought originally that I would include a little more discussion on my interpretation of the paper of Fleurbaey and Zuber, but perhaps I return to that in another post.

    I have also written, that cross-posting the content elsewhere (like here) is fine with me, but I leave it to others to tell, whether they are interested in that.

  51. OPatrick says:

    I recommend Pekka’s post – though on a first read through I’m not sure that it has actually clarified anything for me yet (apart from to confirm that twitter is an irredeemably bad format for ensuring honest communication on a topic as complex as this).

  52. andrew adams says:

    It’s likely that the people of 2100 will be far better off than the people of 2014, and therefore it’s of questionable morality for the people of 2014 to sacrifice for the benefit of the people of 2100

    I think this is a highly dubious claim. Of course we would expect future generations to be better off than today, just as we are considerably better off than people 100 years ago, and one of the reasons for asking people of 2014 to make sacrifices would be to ensure the people of 2100 are actually better off is in order to protect the welfare of people in the future. The fact that they (hopefully) will be richer than us doesn’t absolve us of responsibility for actions that will be damaging to their interests or mean we shouldn’t try to limit those actions. Is it OK for me to steal from a rich person because they can afford it and the benefit to me would be greater than the damage to them?

    And it’s not just about protecting their financial interests, it’s about preserving the planet so that they have a hospitable world with all its natural wonders to live in. Let’s say that we can actually cost the damage from climate change in 2100 at, say, 5% of GDP but that peoples’ wealth has increased overall by more than that. That doesn’t mean that they can just spend that 5% of GDP and get back the things they have lost because of climate change.

  53. Mark Bahner says:

    “ATTP” writes “Why isn’t climate change itself one of your possible “significant downside possibilities”?

    1) I assume that the IPCC assessment in AR5 that 2.5 degrees Celsius warming n this century is likely to produce a GDP penalty of 0.2 to 2% is a reasonable assessment.

    2) I know that the only IPCC scenario with warming significantly above that 2.5 degrees Celsius value, the RCP 8.5 scenario, has completely unrealistically high fossil fuel use projections (especially for coal).

    3) I know that the global per-capita GDP growth rate for the 20th century was about 2.3 percent, and it’s reasonable to expect growth in the 21st century to be higher (absent the catastrophes I mentioned, like thermonuclear war). Therefore, the world per-capita GDP in the year 2100 (in 2014 dollars) is likely to be above $70,000. (And likely *well* above $70,000…I expect it to be over $1 million, again in year 2014 dollars.)

  54. Mark Bahner says:

    Andrew Adams writes, “The fact that they (hopefully) will be richer than us doesn’t absolve us of responsibility for actions that will be damaging to their interests or mean we shouldn’t try to limit those actions. The fact that they (hopefully) will be richer than us doesn’t absolve us of responsibility for actions that will be damaging to their interests or mean we shouldn’t try to limit those actions. Is it OK for me to steal from a rich person because they can afford it and the benefit to me would be greater than the damage to them?”

    I don’t agree that your analogy is valid. Here’s an analogy that I think is more valid. Assume a person smokes. A lot. The person dies and leaves his or her house to descendants. They have to do extra work on the house (e.g., extensive cleaning or even replacement of carpets, re-painting all the walls) if they want to live in it or sell it to someone. In other words, the house is worth less to the descendants because the person smoked. Was the person doing something morally wrong in smoking, and therefore leaving the descendants with a house that was worth less than it otherwise would be worth? I think the answer is, “Clearly not. The descendants were fortunate even to get a house. They have no moral claim to getting a house that hasn’t been damaged by cigarette smoke.

    Andrew continues, “Let’s say that we can actually cost the damage from climate change in 2100 at, say, 5% of GDP but that peoples’ wealth has increased overall by more than that.”

    Andrew, I wonder if you have any concept of just how much wealthier people will be in 2100? The U.S. per capita GDP is about $53,000, and the world per-capita GDP is about $13,000. What do you expect the U.S. and world per-capita GDPs to be in the year 2100 (expressed in year 2014 dollars)?

  55. Mark,

    I know that the only IPCC scenario with warming significantly above that 2.5 degrees Celsius value, the RCP 8.5 scenario, has completely unrealistically high fossil fuel use projections (especially for coal).

    I think it depends what you mean. If we follow what seems to be your advice – don’t really do anything specifically to mitigate against climate change – then RCP8.5 becomes a realistic future scenario. If you’re arguing that it is unlikely and that we will probably follow a scenario in which we see only 2.5 degrees by 2100, then I think you have implicitly included mitigation in your assumptions.

  56. Life is like an analogy.

  57. AnOilMan says:

    I’m confused about talk of houses being left to descendants. People who loose their houses because of Climate Change loose everything and leave nothing.

    I’d like to dwell on Mark’s intent to let people be financially liquidated by climate change. To compensate people Mark wants to raise taxes and pay for Climate Change damage, or simply let people loose all that they have. (In Canada conservatives scream about paying people who take environmental losses. Something that will no doubt get louder as time goes by.)

    Annd no one will agree that anything is 100% climate change damage, so I guess the people suffer, huh? (Let’s be fair, Climate Change may be the straw that breaks the camel’s back. Instead of a bad year, people have a negative income year.)

    The fact is Mark, your so called numbers take the face away from the real harm Climate a change does. How about I take your house, and stiff you with the mortgage, and we’ll just see how you like that. That is what is happening to people now today in North America.

    You intend to bankrupt people and hide behind numbers while pretending it’s all ok.

  58. Rachel says:

    Mark,

    “They have to do extra work on the house (e.g., extensive cleaning or even replacement of carpets, re-painting all the walls) if they want to live in it or sell it to someone. In other words, the house is worth less to the descendants because the person smoked.”

    We’re not talking about changing the curtains, carpets and painting the walls here. We’re talking about whether people of the future have the right to a habitable planet. This is very different to your analogy. Here’s a copy and paste from the latest IPCC report, chapter 3 – Social, Economic and Ethical Concepts and Methods.

    If future people’s basic rights include the right to survival, health, and subsistence, these basic rights are likely to be violated when temperatures rise above a certain level. However, currently living people can slow the rise in temperature by limiting their emissions at a reasonable cost to themselves. Therefore, living people should reduce their emissions in order to fulfil their minimal duties of justice to future generations. Normative theorists dispute the standard of living that corresponds to people’s basic rights (Page, 2007; Huseby, 2010).

    If it was just a matter of fresh paint then I don’t think anyone would really care. But it’s much more than that and what is disputed is what level of harm is unethical to inflict on future generations. What basic rights do we owe future generations? Do they have the right to the same standard of living as we have? Do they have the right to a habitable planet?

  59. Steve Bloom says:

    FYI Bahner has been repeating the same line for at least the last 10 years. No amount of added evidence will persuade him to change.

  60. Mark Bahner says:

    “If we follow what seems to be your advice – don’t really do anything specifically to mitigate against climate change – then RCP8.5 becomes a realistic future scenario.”

    No, RCP8.5 only becomes a realistic future scenario in a world that has different geology and resource economics than this earth.

    “If you’re arguing that it is unlikely and that we will probably follow a scenario in which we see only 2.5 degrees by 2100, then I think you have implicitly included mitigation in your assumptions.”

    No, I’m merely assuming that the geology and resource economics of coal, oil, and natural gas are known, and that trends in renewable energy sources (such as photovoltaics) will continue as expected.

  61. Mark reminds me of Holodecks:

    http://ourchangingclimate.wordpress.com/2010/06/26/climate-skepticism-comes-in-many-shades-of-grey/#comment-6492

    It’s about other kinds of models, but it’s about the same quandary.

  62. Mark,

    No, RCP8.5 only becomes a realistic future scenario in a world that has different geology and resource economics than this earth.

    You seem extremely certain (about lots of things, it seems). Care to provide some convincing evidence?

    I still think that your scenario effectively includes some form of mitigation, whether you like to admit it or not.

  63. Tom Curtis says:

    RCP 8.5 assumes that coal consumption will rise by a factor of 7.8 relative to 2000 levels by 2100. There is no question that there are sufficient coal reserves for consumption to rise by that level. When Mark Bahner says “RCP8.5 only becomes a realistic future scenario in a world that has different geology … than this earth” that is pure bluster. Further, absent a price on carbon, with the exhaustion of conventional oil and gas reserves, it is likely that current oil and gas power generation would be replaced by coal power generation. It is even probable that some fuel requirements for transport will be replaced by diesel generated from coal rather than by oil from unconventional sources such as tar sands. That makes RCP 8.5, to my mind, and entirely plausible scenario. Indeed, absent any price on carbon and assuming the levelized costs of solar and wind power to not fall to that of coal, it is a conservative scenario.

    Bear in mind that Bahner expects per Capita Gross World Product to rise from its 2012 value of $12,400 US (PPP) to at least $70,000 US PPP, an increase by a factor of 5.6. Global population is expected to increase to 10 billion by 2100, an increase by a factor of 1.4. The combined increase in GWP is 7.84. As wealth is connected to energy production, even in this very conservative scenario according to Bahner, the RCP 8.5 increase in coal consumption merely represents coal consumption increasing inline with GWP.

  64. jsam says:

    Pick an RCP. The more complacent you are about today the higher the path you will follow into tomorrow. http://www.carbonbrief.org/blog/2014/04/degrees-of-change-the-ipcc%E2%80%99s-predictions-for-future-temperature-rise/

  65. verytallguy says:

    We have more than enough ingenuity to reduce fossil fuel extraction costs as well as renewables, and there’s more than enough to way exceed even RCP8.5 Fracking is a good current example, but much more damaging technologies are also out there – tar sands is well known but also for example http://en.wikipedia.org/wiki/Underground_coal_gasification

    If an additional 4 trillion tonnes [of coal] were extracted… …carbon-dioxide levels could quadruple

    Plus there are sectors, particularly transport, where renewables will never be competitive with fossil fuels unless tax/subsidy is used to ensure fossil fuels pay the externality.

  66. Tom Curtis says:

    Additional to my previous, the IEA 2011 estimated reserves in coal are sufficient to raise atmospheric CO2 levels by 3,800 ppmv by themselves, assuming historical airborne fractions. That is sufficient for an RCP 14 with no other contributing sources of CO2, showing quite clearly that Bahner’s notion that there is insufficient coal for RCP 8.5 to be plausible is complete rubbish.

  67. The total amount of fossil carbon is certainly enough for RCP8.5, but some of the estimates of ultimately recoverable resources tell that reaching RCP8.5 is not possible and that limited availability of fossil fuels will start to have a strong effect soon. The long term answer depends mainly on assumptions on the real potential of low-quality coal and shale oil, the nearer term effects on the problems in keeping up the rate of production. Methane hydrates is a further potential source of carbon, but far less certain even at high cost.

    From the point of view of policy decisions limited availability of fossil fuels leads largely to the same conclusions as the requirement to limit CO2 releases. The conclusions would differ more strongly in case where the total amount of recoverable fossil fuels is sufficient for RCP8.5 and beyond.

    As it is so difficult to reach international agreement on effective climate policy, it’s quite possible that the problem gets solved through difficulties in meeting the demand of fossil fuels. That would be a limitation that bites effectively without any international agreement. It that turns out to be the real future then all the work that has been done to reduce dependence on fossil fuels will be found as very valuable.

    People who think that recoverable fossil fuel resources are near the lower estimates should agree widely on policies with those who require strong climate policies. The real issue for both is the ceiling on the use of fossil fuels.

  68. andrew adams says:

    Mark,

    I don’t agree that your analogy is valid. Here’s an analogy that I think is more valid. Assume a person smokes. A lot. The person dies and leaves his or her house to descendants. They have to do extra work on the house (e.g., extensive cleaning or even replacement of carpets, re-painting all the walls) if they want to live in it or sell it to someone. In other words, the house is worth less to the descendants because the person smoked. Was the person doing something morally wrong in smoking, and therefore leaving the descendants with a house that was worth less than it otherwise would be worth? I think the answer is, “Clearly not. The descendants were fortunate even to get a house. They have no moral claim to getting a house that hasn’t been damaged by cigarette smoke.

    Well it wasn’t really analogy, more an extension of the same moral principle. But your analogy doesn’t really work, for the very reason you state at the end – no one has any entitlement to inherit someone else’s property so there is no moral obligation for him to preserve the value of that property in order to protect the interests of those who might inherit it, and they can’t claim to have suffered any unfair damage as a result.

    Andrew, I wonder if you have any concept of just how much wealthier people will be in 2100? The U.S. per capita GDP is about $53,000, and the world per-capita GDP is about $13,000. What do you expect the U.S. and world per-capita GDPs to be in the year 2100 (expressed in year 2014 dollars)?

    If GDP per capita continues to rise in line with historical trends then (based on the UK) I would guess it would be around 3 to 5 times higher in developed countries. But of course if we don’t take action on climate change that figure could be lower, and ultimately the damage could start to outweigh increases in GDP. And we are much, much wealthier now than we were 100 years ago but people are still vulnerable to economic shocks, extreme weather events etc. But either way my previous point still stands – however wealthy people are in 2100 it doesn’t mean that they can buy protection from all of the effects of climate change, and it certainly won’t enable them to reverse whatever damage is done to our planet in the meantime.

  69. johnrussell40 says:

    Pekka: “People who think that recoverable fossil fuel resources are near the lower estimates should agree widely on policies with those who require strong climate policies.”

    Those outside the UK might like to know that they’re now saying in the last week or so that 70% of the UK’s coal (and remember we started mining it seriously in about 1700 to kickstart the whole industrial revolution) still lies under the North Sea; and, thanks to new techniques to burn it in situ, they’re now talking about exploiting it. As you can imagine, some people are becoming all excited about it, even though the necessary CCS is still just a sparkle in the Tory government’s eye: http://www.worldcoal.com/news/coal/articles/Coal_discovered_in_North_Sea_674.aspx#.U05r1qKAnuc

    And: http://www.bbc.co.uk/news/business-26921145

  70. johnrussell40 says:

    I think Mark unwittingly flags up a real issue that needs addressing. How many people actually understand what 2, 3 or 4C of warming actually means in practical, man-in-the-street terms. My guess is that apart from a few feet of sea level rise and a slightly warmer climate (and who in Northern Europe or North America thinks that’s a bad thing?) they haven’t got a clue what will result on a personal level. Maybe more should be done to spell out the effects.

    I know my eyes were first opened to the practical repercussions when I read Mark Lynas’s ‘Six Degrees’: http://www.theguardian.com/books/2007/apr/23/scienceandnature.climatechange

  71. ThingsBreak is in good form:

  72. AnOilMan says:

    Willard: Lomborg doesn’t know economics or the environment. He has a PHd in gaming people’s votes. He’s a political scientist.

    johnrussell40: My parents have two beach front condos in Hawaii. Each has a 180 degree unobstructed ocean front view. If my parents die I plan to sell those to people like Mark.

    There are the well known statistics on deaths caused by rain and heat. (After a rain storm, x% of people get sick and die.)

    Vancouver will be seeing ever increasing damage from ocean rise.
    https://ca.news.yahoo.com/blogs/geekquinox/vancouver-named-one-top-cities-risk-sea-level-145723142.html

    The Pine trees of British Columbia will be gone (this is already scheduled).
    http://www.woodbusiness.ca/harvesting/bc-mountain-pine-beetle-epidemic
    http://www.cbc.ca/news/canada/british-columbia/pine-beetle-blamed-as-quesnel-houston-sawmills-to-close-1.2224677

    Towns that use ice roads will be shut down or removed;
    http://en.wikipedia.org/wiki/Ice_road

    Whole swaths of northern towns built on permafrost will need to be replaced;
    http://en.wikipedia.org/wiki/Permafrost

    Northern natives will need to develop new navigation techniques as the traditional Pingo way points will be gone.
    http://en.wikipedia.org/wiki/Pingo

    Oh, and Canada won’t be producing more food. The dirt in the prairies grows grass, (Grain) and not much else. I’ve seen good soil. I know what good is. And son, this is not good soil. So let them eat bread?

    I wonder If Mark included the sequestration of all the released carbon from ice melts, which will cost 60 trillion dollars if it does melt;
    https://ca.news.yahoo.com/blogs/geekquinox/summer-arctic-ice-melt-carries-monstrous-60-trillion-120204988.html

  73. Rachel says:

    Willard,
    I nearly started a new post about that tweet of Bjorn Lomborg’s which I’m pretty sure is not making a fair comparison. But I really know what I’m talking about!

  74. Rachel says:

    Oops. I meant to say that I really *don’t* know what I’m talking about.

  75. John Mashey says:

    Canada won’t be producing more food? You mean farmers won’t rush into that empty space in the Canadian Shield? Maybe the topsoil moved long ago by glaciers to the US MidWest can be moved back. 🙂

  76. johnrussell40 says:

    @oilman: actually it’s ‘when’ not ‘if’ your parents shuffle off their mortal coils.

    The way things are going there are sure to be people with Mark’s outlook ready to snap up condos for a long time yet. In fact the value of ocean-side properties, in comparison to properties on higher ground, is probably an accurate proxy for the level of denial in the general population.

    While I accept your list of some of the likely impacts from climate change, you must admit that they’re not really attention grabbing to someone living in the suburbs of any large city in the mid latitudes—which is the majority of the 1st world’s population. And that’s the problem: these sort of people in their cosy suburban homes with 2.4 children, a well-stocked fridge and an SUV in the drive think things happen to other people, not them. How to get through to them that climate change will be a problem for them or their kids?

  77. Tom Curtis says:

    Willard, Lomborg correctly points out that he is pointing to annual values. The 0.06% value is the “percentage point reduction in annualized consumption growth rate“. In 2070, that comes to a 3.54% reduction in annual consumption (compounding from 2010). That is, in 2070 an efficient mitigation plan will reduce annual consumption by 3.5% of what it would have been with BAU, and ignoring damages from climate change. Lomborg compares that to the damages from climate change estimated for approximately 2.5 C above recent temperatures (reached in 2075 in RCP 8.5 median (mean?) figure) of 0.2 to 2.0 C. (WG2, Chapter 10 Summary for Policy Makers).

    Breaking this down, Lomborg has used the figure for 2100 for the mitigation policy rather than that for 2070 (ie, 2100 mitigation cost plus cost for 2100 increase in temperature). He has excluded the impact of climate change on economic growth, estimated as being greater than the impact in consumption in three out of four studies reported, and as being 50% greater in the fourth (I think). He has excluded the benefit of a lower temperature with mitigation than without. These three factors bring the net cost in 2070 near to parity. He has also ignored that impacts rise rapidly above 2 C, potentially reaching 100% of income with temperatures as low as 5.8 C above recent temperatures.

    He further ignores that “Economic impact estimates completed over the past 20 years vary in their coverage of subsets of economic sectors and depend on a large number of assumptions, many of which are disputable, and many estimates do not account for catastrophic changes, tipping points, and many other factors.” (WG2 Summary for Policy Makers), and that downside risks are far greater than upside risks so that the expected value of impacts is not given be the median (or mean) values of temperature and costs, but are significantly higher than that.

  78. Rachel says:

    Tom,

    Bjorn Lomborg says on his Facebook page:

    The new report shows (table from page 18) that cutting CO₂ to 2℃ limit is going to cost up to 4% of GDP in 2030, 6% in 2050 and 11% in 2100. And this is assuming that “all countries of the world begin mitigation immediately, there is a single global carbon price, and all key technologies are available”.

    I decided to post this on my blog since I have probably got it horribly wrong but I still don’t understand where his figures have come from.

  79. Tom Curtis says:

    The costs to keep CO2 to 450 ppmv in 2100 are 1.7 (1 – 3.7) in 2030; 3.4 (2.1 – 6.2) in 2050; and 4.8 (2.9 – 11.4) in 2100. All ranges are 16-18% ranges His claim that costs are “very likely” greater than 6% is nonsense. First, it is as likely as not to be 4.8% or below in 2100, as the table shows. That means it is not even “likely” (66-100% chance in IPCC terms), let alone “very likely” (90-100% according to the IPCC) to be above 6%.

    Second, the table he references is the same table I drew the 0.06% annual growth in reduced consumption from. Therefore my analysis above stands. In particular, even in his own terms Lomborg should include the reduction in economic growth rate due to climate change, and reduce the cost of mitigation by the difference in the costs due to climate change at 4.2 C (RCP 8.5, 2100) and 2 C to make the comparison. Even that ignores the downside risks and the potential for catastrophic changes, and tipping points. In essence his argument is that playing Russian Roullete is a winning stragegy because it pays our median expected outcome is a small payout (small advantage of not mitigating over mitigating), while firmly turning a blind eye to that sixth chamber.

  80. Maybe someone’s already mentioned this, but this is from AR5 WGII page 19.

    With these recognized limitations, the incomplete estimates of global annual economic losses for additional temperature increases of ~2°C are between 0.2 and 2.0% of income (±1 standard deviation around the mean) (medium evidence, medium agreement). Losses are more likely than not to be greater, rather than smaller, than this range (limited evidence, high agreement). Additionally, there are large differences between and within countries. Losses accelerate with greater warming (limited evidence, high agreement), but few quantitative estimates have been completed for additional warming around 3°C or above.

    This is also almost certainly where Lomborg is getting his 2% from

    So, it seems clear that Lomborg has compared the annual economic losses for an additional warming of 2 degrees, with the reduction in consumption due to mitigation based on a percentage point reduction in annualised growth rate of between 0.04 and 0.14 (mean 0.06%).

    At best, these would seem to be not actually comparable. The only way the comparison would seem to be valid is if these numbers suggest that our economies can continue to grow at a rate that is unaffected by climate change or mitigation and that climate change then costs 2% of GDP in 2070 (when we’ve warmed by 2 degrees). In that case a 0.06% reduction in growth due to mitigation policies would result in a bigger reduction in GDP in 2070 than climate change would alone. I suspect, however, that this isn’t correct. I can’t see how the growth rate can be unaffected by the economic losses associated with climate change.

    Possibly, the more valid comparison is to compare the annualised losses with the reduction in growth rate, but I’m not even sure that that is strictly correct because you’d need to know how the losses influenced the growth rate and I don’t think that is trivial.

    I should add that, not being an economist, maybe I just don’t really understand this at all.

  81. Rachel says:

    I think the IPCC could have made this clearer and easier to understand. Interesting discussion on twitter atm.

  82. Steve Bloom says:

    Just to note that it’s entirely plausible for global GDP to climb even while hundreds of millions starve.

  83. Steve,

    Just to note that it’s entirely plausible for global GDP to climb even while hundreds of millions starve.

    Indeed, quite possible. I guess there are possibly even scenarios where global GDP could rise because hundreds of millions are starving.

  84. WG2 tells that little is known about the economically measurable losses of warming. Essentially the only simple information is the reduction of 0.2-2% in consumption when warming has reached 2.5C. As the values are presented they would apply as long as the temperature stays at that level.

    WG3 tells a bit more on the estimates of the cost of mitigation. It tells that the same quantity (reduction in consumption) would be for the case of 450 ppm in 2100 between 1.0-3.7% in 2030 and larger later in the century. Thus the estimate is much larger than the estimated loss at 2.5C. The scenarios that lead to around 600 ppm would have a cost level comparable to the losses at 2.5C.

    All these percentages are fully comparable (they all apply to consumption every year) as long as we look at one level of warming (2.5C) only.

    The error ranges are huge on all cost estimates, for the cost of more warming than 2.5C are so few and so incomplete estimates that the only thing that can really be said is that the costs are likely to rise sharply with more warming. We miss, however, all credible quantification of what “sharply” means.

  85. Tom Curtis says:

    That is a further point. The cost estimates for impacts are weighted by production, not by population (or other equity weighting). They assume implicitly that poor people are worth less. Is Lomborg committing himself to that proposition? Or just obfusticating?

  86. Steve Bloom says:

    While we’re talking Bad Climate Economics undertaken by modern Panglosses, let’s not forget that it doesn’t exist in a vacuum. In about half an hour (6:00 PM EDT) there’s a live-streamed talk by Thomas Piketty, author of the just-published “Capital in the Twenty-First Century” describing the recent sharp rise in inequality, followed by a panel discussion featuring Krugman and Stiglitz. See the discussion here and follow the link to the stream.

  87. Tom Curtis says:

    Peka, I refer you again to Tol (2012), fig 4. Coupled with WG1 table 12.2, they show a 1/40 chance of a 15% reduction of total income by 2100, and a 1/400 chance of a 45% reduction with BAU (RCP 8.5). By 2200 that rises a better than 1 in 4 chance of a 15% reduction, and a 1/400 chance of a 100% reduction of total income with BAU. “Sharply” would appear to mean policy relevant probabilities of catastrophic effects within the time frame effected by current mitigation policies even assuming no tipping points.

  88. In WG2 it’s said that the numbers are equivalent income losses. Thus they should emphasize losses of the poor more than direct monetary losses would.

    Here is one paper that contains discussion of equivalent incomes

    http://www.cepii.fr/PDF_PUB/wp/2007/wp2007-03.pdf

  89. Tom,

    All the economic comparisons seem to be totally dependent on numerous questionable assumptions. It’s trivial to create a list of five points that distort strongly in one direction and five other points of the opposite influence.

    This is a really serious dilemma, because both the potential risks and the potential costs of mitigation are so large that we cannot afford decisions that cannot be justified any better than is typical right now. Many people resort to wishful thinking to support their favorite approach, when nothing better is available, but the most likely outcome of wishful thinking is little gain from possibly high costs.

  90. Steve Bloom says:

    Pekka, I think a risk-based approach (physical rather than economic risk) does the job nicely. Essentially that’s what the likes of Lomborg and Tol argue against.

  91. That 2012 paper of Tol is one more meta-analysis done using as input a few analyses that are all dependent on assumptions that cannot really be justified. It tells only that those few scientists end up in very different conclusions. Add more scientists might result in even wider spectrum of conclusions.

    A number of smart people work in this field, but that’s not enough.

    To me it’s most confusing that so much effort is put in calculations that are so dependent on some badly understood assumptions and technical choices that there’s no hope the results are really useful. People should spend more effort in finding more robust approaches. Such approaches may be crude by design but in a way that can be understood better than mathematically more precise models that are numerically unstable.

  92. Tom Curtis says:

    Peka, we had this out with Tol on this site. He was quite clear that the comparisons that underline the IPCC values, as shown in Fig 10.1, were production weighted. That is, the costs for each region analyzed were weighted by the net productivity of each region to produce a global estimate. It is also clear that equity weighted measures produce a higher, often a much higher cost.

    Further, I agree with you about the economic comparisons. I, in fact, do not think they are useful guides at all, as yet. But if, like Lomborg, you are going to base an argument on them, you need to get the details right – which Lomborg has not.

  93. Steve,

    I agree partially, but on the other hand people misjudge easily the relative importance of factors that are not measurable using the same unit. The importance of large unforeseen or very risks is an are, where that kind of misjudgments are a rule, not an exception.

    It’s really important to search for quantitative (or at least semiquantitative) methods for the assessment, but they must be kept simple enough to make them understandable to at least a large number of specialists of various related fields, if not for more general public.

    I do believe that better approaches are possible, but formulating them requires different type of talent than building standard economic models.

  94. I formulate my view in another way.

    We need quantitative comparisons. For that we need models, but the models must be kept as simple and transparent as possible. Further details must not be added in the production models, if that implies using input data that’s not understood well enough. More detailed models may, however, be valuable in study of specific sources of uncertainty, and for methodological learning that helps in refining and justifying the simple and transparent production models.

  95. Actually I don’t think that it would presently make much difference whether the reduction in consumption is calculated with or without equity weighting. The reason for this belief is that I don’t think that the data and the methods used really allow for estimating well enough the differences in the relative losses at different income levels. The real effect could be large, but the data is probably too sparse to support a real analysis.

  96. Joshua says:

    Peeka –

    “That 2012 paper of Tol is one more meta-analysis done using as input a few analyses that are all dependent on assumptions that cannot really be justifie”

    We have discussed this before.

    Another whole set of assumptions, in addition to those underlying choice of discount rate, are often (always?) made w/r/t positive and negative externalities, differentially, when comparing the economic outcomes of renewable vs. fossil fuel energy. For example, I think that economic projections, to be comprehensive, need to have a full cost accounting for negative externalities such as the human capital and economic costs of keeping oil flowing, or of the “opportunity costs” of empowering despots who deny basic civil rights and access to necessary infrastructure to large % of their populations, or of the health and economic costs of particulates from burning fossil fuels. “Skeptics” have a valid point, IMO, that the positive externalities of access to inexpensive energy also need to be accounted for, but does anyone really think that someone like Lomborg has done so in the full context of all externalities? Economic projections are just another climate change ink blot, IMO. You can predict the results of economic analysis by the analysts’ general orientation.

    Seems to me that any economic projection should necessarily be accompanied by a grounding in a frame of decision-making under uncertainty, with a full discussion of how policies need to be developed to address “fat tails” and perhaps unlikely but deeply devastating outcomes.

    Lomborg = same ol’ same ol’.

  97. Mark Bahner says:

    Tom Curtis writes, “RCP 8.5 assumes that coal consumption will rise by a factor of 7.8 relative to 2000 levels by 2100. There is no question that there are sufficient coal reserves for consumption to rise by that level. When Mark Bahner says “RCP8.5 only becomes a realistic future scenario in a world that has different geology … than this earth” that is pure bluster.”

    Notice how he [Mod: snip] puts ellipsis in what I wrote, to deliberately alter the meaning. (I guess if one wants to convince an audience and doesn’t mind being dishonest to do it, that’s one way.) Here is what I actually wrote:

    “…RCP8.5 only becomes a realistic future scenario in a world that has different geology and resource economics than this earth.”

    And not only do I stand by that quote, I challenge anyone to claim differently. The RCP8.5 scenario projects that worldwide coal usage will continuously increase throughout the 21st century, to approximately a factor of 8 more than in the year 2000.

    Here are production values for the year 2000, in short tons:

    China 1,514,054
    United States 1,073,612
    India 370,018
    Australia 338,103
    Russia 264,912
    South Africa 248,935
    Germany 226,048
    Poland 179,247
    Kazakhstan 85,367
    Indonesia 84,469
    Rest of world 742,401
    Total world 5,127,166

    I challenge anyone to claim that those numbers will be 8 times higher in the year 2100, i.e.. that the U.S. will produce 8.6 billion tons; China 12 billion tons; India, 3.0 billion tons, etc. No one who knows anything about the subject thinks that will happen.

  98. Tom Curtis says:

    Bahner, you’re an [Mod: snip]. I put the elipsis through “resource economics” because my discussion of relative increase of consumption vs increase in economic activity had already dealt with that issue. As it stands, the best rebutal you have to my discussion of the geology is to simply ignore it. At a minimum, you have been shown to have padded your claim with an irrelevant factor.

    Turning back to the resource economics. the 2012 global production of coal was 7.864 billion tonnes. That represents a growth rate in coal production between 2000 and 2012 of just of 3.6% per annum. Compounded over 100 years, that represents a growth by a factor of 34. So, your claim is that resource economics cannot sustain the current growth rate of coal production into the future because “no one who knows anything about the subject thinks that will happen”. Looked at slightly differently, an expansion by a factor of eight requires an annual growth rate in production of 2.1%. That growth rate is not impossible due to lack of coal, for as already seen there is more than enough. It is not due to lack of economic activity, for by your claim economic growth will match, and indeed far exceed that level. Therefore there is no fundamental reason for coal production to not multiply by a factor of 8 over the coming century other than a preference for cleaner energy sources – ie, a desire to mitigate climate change. And that, of course, is a reason excluded from BAU scenarios.

  99. AnOilMan says:

    Here’s a complete breakdown on all data for all energy sources;
    http://www.bp.com/en/global/corporate/about-bp/energy-economics/statistical-review-of-world-energy-2013/review-by-energy-type/renewable-energy/solar-energy.html

    Check the downloads. Its compiled by BP so it should be kosher for Mark to look at.

    Proven coal reserves are 860938 million tons. Its yearly consumption is as Tom says. (There’s no historical data on reserves, but as prices go up, reserves will increase, along with discoveries, etc.) Coal reserves haven’t changed in 4 years;
    http://en.wikipedia.org/wiki/Coal

    Oil Reserves 1668.9 Billion Barrels, Consumption 86152k barrels a day, 31.44 Billion Barrels per year. Historical data shows a pretty slow but steady increase in reserves. (In the industry, if prices go up, companies are willing to spend more to get it, and that also drives up reserves.)

    It looks like we’ve hit peak Nuclear. Solar and indeed all renewables are most definitely going exponential. I wonder when they’ll overtake fossil fuels at the present rates.

  100. AnOilMan says:

    The projections for lifetime of these reserves is based on zero increase in production and zero increase in reserves. Neither of which is true, and as I’ve said, as prices increase, so will reserves.

    On the plus side, renewables have infinite reserves, and you don’t need to spend trillions of dollars annually to maintain your control over it.

  101. Tom Curtis says:

    The IEA World Energy Outlook of 2011 lists coal reserves as 1,001 Billion tonnes, but coal resources as 21,204 billion tonnes (table 11.3, page 402). Resources are ” Concentrations of coal in such forms that economic extraction is currently or may become feasible”. Of resources, only some are “identified resources, ie, “Specific bodies of coal whose location, rank, quality, and quantity are known from geologic evidence supported by engineering measurements”; while reserves are “That portion of the Identified Coal Resource that can be economically mined at the time of determination. The reserve is derived by applying a Recovery Factor to that component of the Identified Coal Resource designated as the Reserve Base” (USGS).

    Because resources are less certain than reserves, estimates of their quantity have a wide error margin. Whereas reserves are known to an accuracy of plus or minus 10% or so, resources are far less certain. So, with an estimated resource of 21 trillion tonnes, there may only be 10 trillion, or as much as 30 trillion actually in the ground. However, that uncertainty is not a basis for reducing the estimate in itself. That is, first, because the uncertainty cuts both ways; and because, second, any such reduction is just a new estimate or resources with less basis than the original.

    Importantly for this discussion, 1 trillion tonnes of coal represents about 100 years production at current rates. Therefore, with a linear trend in production, 4.5 trillion tonnes is sufficient to increase production to eight times current levels by 2100, ie, about one fifth of the coal resource. Even less is required with exponential growth. It is unreasonable, therefore, to assume there is insufficient coal to increase production to 8 times current levels.

    It follows that Bahner’s argument that RCP 8.5 coal production estimates are unrealistic devolves down to an argument that with growth in Gross World Product by a factor of 8, and with future advances in extraction technology, it remains implausible that it will become economic to extract one fifth of coal resources. His only argument to that effect to date has been his argument from unspecified authority.

  102. OPatrick says:

    Via Stoat, an interesting article by David Appell – When Will Economic Growth Ever Be Enough? – seems relevant.

    It [real per capita GDP in U.S.] has just about tripled since 1960.

    Now, 1960 wasn’t a terrible time in the U.S. People weren’t starving. They weren’t huddling in shantytowns, begging for food or warmth or an education.

    but if you would have asked them to pay for clean, renewable energy, what might have been their response?

    They might well have said, gee, that’s a nice idea, but you know, we just really can’t afford it right now.

    But, they will say…our descendants will surely be wealthier than we are, so why don’t you ask them to sacrifice? They’ll be able to afford it.

    Which brings us to 2014. Real GDP is almost three times higher, per person.

  103. jsam says:

    “Do we not have a professional obligation to talk about the whole probability distribution, given the tough consequences at the tail of the distribution?” http://www.yaleclimatemediaforum.org/2014/04/mit-scientist-an-obligation-to-take-on-tail-risk-vs-alarmism/

    Or, “Do ya feel lucky, punk?”

  104. AnOilMan says:

    There’s also the costs of continuing to do what we do;
    http://en.wikipedia.org/wiki/Environmental_impact_of_the_coal_industry

    Interesting… coal shortens lives, and business as usual is at minimum killing 100,000,000 more people. That’s 2.4 million Americans.

    By the same token, I’ve noticed that solar doesn’t do that. I’ve also noticed that train loads of solar panels don’t explode and burn. In fact there was a huge increase in wind related deaths a few years ago. A single dutch wind turbine worker, forgot to put his safety harness drastically driving up the death rate.

    I’d also want to know what will be driving GDP growth. I think that the relative wealth in the West has been driven for the last 30 years by outsourcing jobs to China and India. That is a trend that is now reversing. China has ended its one child policy since it no longer drives economic growth for them. To grow their economy they need to increase wages, and that means that the job shift has to reverse. (In short, we’ll be employed, but everything will cost more.) Aside from that there are many disruptive technologies in the offing like 3D printers.

  105. Rachel says:

    OPatrick,
    That’s a really good article, thanks for that. We’re always going to be poorer than the next generation so why bother doing anything ever? The responsibility just gets passed forward ad infinitum.

  106. OPatrick says:

    Rachel, yes – it feels like the ‘China’s emissions are going up so there’s no point ruining our economy for nothing’ arguments. What they all have in common, of course, is that we end up not having to do much now ourselves.

  107. Rachel says:

    OilMan,

    Interesting… coal shortens lives, and business as usual is at minimum killing 100,000,000 more people. That’s 2.4 million Americans.

    The IPCC report part II has a whole section on the cobenefits of tackling climate change and these cobenefits are not deducted from the costs of mitigation. The big one is the reduction in pollution which is currently the largest health burden globally.

    Put into terms of disability-adjusted life years (DALYs), particle air pollution was responsible for about 190 million lost DALYs in 2010, or about 7.6% of all DALYs lost. This burden puts particle air pollution among the largest risk factors globally, far higher than any otherenvironmental risk and rivaling or exceeding all of the five dozen risk factors examined, including malnutrition, smoking, high blood pressure, and alcohol.

    But there are others too: increasing access to contraception (which is especially good for women), eating less meat (which may reduce ischemic heart disease and some cancers); encouraging more active transport alternatives like walking and cycling; increasing urban green spaces.

  108. Rachel says:

    OPatrick,

    This is perhaps a little off-topic but I’m reminded of something Bill Bryson wrote in Notes from a Small Island about the Settle-to-Carlisle railway:

    The Settle-to-Carlisle line is the most celebrated obscure line in the world. British Rail has been wanting to close it down for years on the grounds that it doesn’t pay its way, which is the most mad and preposterous line of argument imaginable.

    We’ve been hearing this warped reasoning for so long about so many things that it has become received wisdom, but when you think about it for even a nanosecond it is perfectly obvious that most worthwhile things don’t begin to pay for themselves. If you followed this absurd logic any distance at all, you would have to get rid of traffic lights, lay-bys, schools, drains, national parks, museums, universities, old people and much else besides. So why on earth should something as useful as a railway line, which is generally much more agreeable than old people, and certainly less inclined to bitch and twitter, have to demonstrate even the tiniest measure of economic viability to ensure its continued existence? This is a line of thinking that must be abandoned at once.

  109. The IPCC report part II has a whole section on the cobenefits of tackling climate change and these cobenefits are not deducted from the costs of mitigation.

    One of the faults of AR5 is that the division of economic issues between WG2 and WG3 makes it impossible to give a proper overall picture even at the level the present knowledge would allow.

  110. Rachel says:

    jsam,

    The Carbon Brief article is really good. What I find interesting is how the same figures can be used to give a completely different impression depending on how they’re presented. When Bjorn Lomborg presents the costs, he makes it look like a huge burden. But that article in Carbon Brief makes them look quite small. No wonder people are so confused!

    There’s a good article in the Philosopher’s Mail How economic news keeps us dumb and stops us changing the world

    The news is partly to blame for this incoherent rage; it is the news that helps to raise audiences that cannot make sense of and feel hopeless about their condition and that are fed a diet of economic analyses that skilfully crushes ambitious considerations of how to create a more equitable world.

  111. There’s a very important note in WG3 report related to the cost-estimate:

    Notes: 1 Cost-effective scenarios assume immediate mitigation in all countries and a single global carbon price, and impose no additional limitations on technology relative to 12 the models’ default technology assumptions.

    The costs are calculated as difference between direct costs of the scenarios under the assumptions of note 1. Incentives and regulations that have the same effect on the emissions are likely to involve very much higher monetary transfers. Thus those who are on the side that pays lose very much more than that amount, while some others on the receiving side benefit. This kind of calculations are highly theoretical and incapable of telling about the actual effects on economies.

    Little can be gained without strong participation of China, India, etc. Their economies are at a stage of development where reductions in growth rates are likely to by much higher. That’s one more reason for considering the estimate of AR5 highly optimistic.

    Furthermore a single global carbon price would be destructive for the economies of poorest countries (poorer than China, but at least half of India’s population belong to the poorest), but modifying the rules for them might have a relative small influence on the outcome assuming that a good solution can be devised and implemented.

  112. Steve Bloom says:

    Pekka, in principle the Synthesis SPM should do that job, although I’m not too hopeful it will.

  113. Tom Curtis says:

    Pekka, a single carbon price would not be destructive of the economies of poor nations, and indeed, can be beneficial. To do so, all that is required is that it is a single carbon price on per capita emissions, and allow trading of carbon credits. On that basis, poor nations with low per capita emissions will profit by selling excess “carbon credits” to developed nations, more than compensating for the price they pay on their limited emissions. Indeed, the current basis of negotiation (based on an extension of the Kyoto process), which is intended to mandate equal reductions across all nations would produce unequal carbon prices within different nations.

  114. Steve,
    Doing that properly would require going through relevant original research rather than separate assessments of WG2 and WG3. With a couple of days from the release of WG3 SPM I start to feel also that the approaches of WG2 and WG3 are not fully consistent. Both ended up in choices that emphasized their importance over the other.

    As adaptation was in WG2 it give much weight for the possibility that mitigation cannot lead to its target and that adaptation becomes essential, while WG3 gave much weight for policies that lead to 2C target. WG3 expressed also some trust in the possibility of reaching that target.

  115. Mark Bahner says:

    I wrote, No, RCP8.5 only becomes a realistic future scenario in a world that has different geology and resource economics than this earth.”

    ATTP responded: “You seem extremely certain (about lots of things, it seems). Care to provide some convincing evidence?”

    I’d be happy to provide convincing evidence:

    http://www.its.caltech.edu/~rutledge/DavidRutledgeCoalGeology.pdf

    “These curve fits indicate that total world production, including past and future production, will be 680 Gt. The historical range for these fits made on an annual basis from 1995 to 2009 is 653 Gt to 749 Gt, 14% in percentage terms. The curve fits also indicate that 90% of the total production
    will have taken place by 2070. This gives the time scale for considering alternatives. This estimate for total production is somewhat less than the current reserves plus cumulative production, 1163 Gt, and very much less than the amount of coal that the UN Intergovernmental Panel on Climate Change, or IPCC, assumes is available for its scenarios. The maximum cumulative coal production through 2100 in an IPCC scenario is 3500 Gt.”

    http://www.its.caltech.edu/~rutledge/DaveRutledge2013GSA.pptx

    “The long-term coal production in RCP 8.5 is 6.6Tt”
    “9x the projection for ultimate coal production”
    “5x reserves plus cumulative production”

    “This is completely contrary to the historical experience—RCP 8.5 should not be used for any purpose”

    http://www.sciencedirect.com/science/article/pii/S0016236109000507

    “A model capable of projecting mineral resources production has been developed. The model includes supply and demand interactions, and has been applied to all coal producing countries. A model of worldwide coal production has been developed for three scenarios. The ultimately recoverable resources (URR) estimates used in the scenarios ranged from 700 Gt to 1243 Gt. The model indicates that worldwide coal production will peak between 2010 and 2048 on a mass basis and between 2011 and 2047 on an energy basis. The Best Guess scenario, assumed a URR of 1144 Gt and peaks in 2034 on a mass basis, and in 2026 on an energy basis.”

    http://www.sciencedirect.com/science/article/pii/S0360544210000617

    “The value of this approach is that it provides a reality check on the magnitude of carbon emissions in a business-as-usual (BAU) scenario. The resulting base-case is significantly below 36 of the 40 carbon emission scenarios from the IPCC. The global peak of coal production from existing coalfields is predicted to occur close to the year 2011. The peak coal production rate is 160 EJ/y, and the peak carbon emissions from coal burning are 4.0 Gt C (15 Gt CO2) per year. After 2011, the production rates of coal and CO2 decline, reaching 1990 levels by the year 2037, and reaching 50% of the peak value in the year 2047.”

    So those are three papers in journals devoted to energy research that effectively say that the RCP8.5 scenario is nonsense. And one invited presentation to the annual Geological Society of America annual conference in 2013 where it was *explicitly* stated, “This is completely contrary to the historical experience—RCP 8.5 should not be used for any purpose.”

    Oh, and in case you needed anything else–you shouldn’t…that should be convincing enough– there is this:

    http://www.worldcoal.com/news/coal/articles/Chinese_coal_demand_2020_581.aspx

    “China’s coal demand will peak in 2020, with the country needing approximately 4.7 billion tonnes. This forecast comes from Li Ruifeng, general manager of the Coal Industry Planning and Design Research Institute.”

    In contrast, the IPCC RCP8.5 scenario essentially would require that Chinese coal would continue to increase throughout the entire 21st century, reaching a level of more than 10 billion tonnes in 2100. (And even increasing after that!)

    Is that convincing enough? If not, why not?

  116. Tom,

    What you describe is very far from a single carbon price.

  117. Tom Curtis says:

    Pekka, imagine the world could agree that:

    1) A flat rate fee per equivalent emissions to a tonne of CO2 be paid to a World Bank body set up to handle this exchange; and that
    2) This money is reimbursed to nations on an equal per capita basis.

    You then have a single carbon price.

    Under this scheme, nations with low per capita emissions (poor nations) will be net beneficiaries. They will still have an economic advantage in restricting growth in emissions, but will not be economically disadvantaged.

    You would get an economically equivalent effect by setting a uniform per capita emissions limit and allowing emissions trading. That would also give you an approximation to a uniform price on carbon across the globe, although individual exchanges will vary above an below that rate as in all markets.

  118. Tom Curtis says:

    Mark Bahner quotes from a couple of “peak coal” enthusiasts as though theirs is the last word on the topic. There are several problems for Bahner in relying on Hubbert curves in predicting future production. First, such predictions assume no major changes in either the price of coal, or in the cost of producing coal due to improved extraction technologies. Second, given production data, the shape of the Hubbert curve to use is not a foregone conclusion. In an analysis of Australian future coal production, four curves were used. One of them predicted peak production at 6.75 times current levels in with the standard estimate of URR (Ultimate Recoverable Resource), and 7.75 times current levels with a high estimate of URR. Both estimates show peak production after 2100.

    The point here is not that the proponents of peak coal are wrong. It is that they are potentially wrong given current information. RCP 8.5 represents a scenario in which peak coal is massively overstated. To insist that it must be wrong because some (not all) analysts predict peak coal around 2030 is equivalent to suggesting that those analysts cannot have made a mistake. To frame policy on that suggestion then becomes a massive, and unwarranted gamble.

    Of course, peak coal proponents could be right. I hope they are. The consequence of their being right, however, is that either economic growth will crunch to a halt, and even reverse itself within a few decades; or that new, carbon free energy sources will be deployed rapidly and cheaply. In the former case, we are not justified in having any discount rate on future impacts of climate change, which will still be large. In the second case, the cost of mitigation has been massively over estimated by the IPCC.

  119. Mark Bahner says:

    Rachel writes, “That’s a really good article, thanks for that. We’re always going to be poorer than the next generation so why bother doing anything ever? The responsibility just gets passed forward ad infinitum.”

    That’s right, except that it doesn’t get passed on “ad infinitum.” It gets passed on until there’s a generation that is rich enough, and considers the problem worthwhile enough, to solve it. It has always been that way.

    This will date me, but when I was growing in the 60s and early 70s, basically everyone in the U.S. and every other developed country in the world had blood-lead levels that today would be considered “lead poisoning” (above 10 micrograms per deciliter of blood). But then in the mid-1970s, people were rich enough–and more importantly, had dealt with more important issues like WWII, the Korean War, and the Vietnam War–and so people could afford to put catalytic converters on cars (very expensive because of the platinum and later paladium catalysts). To make sure the converters didn’t immediately break down, unleaded gasoline was necessary. Now, no one would dream of having production cars with leaded gasoline.

    Right now China is #1 in the world in total CO2 emissions, and India is #3. There’s no way anyone can (or should) get them to lower their CO2 emissions. They need to get rich first. That will mean that their grandchildren or great-grandchildren will need to deal with bad effects of CO2, but that doesn’t mean they should lower their emissions. Their grandchildren and great-grandchildren will be much better off. (Unless there’s a nuclear exchange between Pakistan and India, in which case global warming will not be high on the list of their grandchildren’s and great-grandchildren’s concerns.

  120. jsam says:

    Looks like I’m even older than Mark. 😦

    If we were rich enough then we are more than rich enough now.

    We are currently tracking AR4 A1F1 / AR5 RCP 8.5 scenarios – not committed to, but tracking.

  121. Tom Curtis says:

    It would have been nice if Mark Bahner would have got his story about leaded petrol correct. Catalytic converters reduce pollution from carbon monoxide, unburnt hydrocarbons and, and more advanced versions oxides of nitrogen. To eliminate lead from petrol, all that was needed was to cease adding tetraethyllead to the mix – something that would have required no expenditure.

  122. Tom,

    Pekka, imagine the world could agree that:

    We can imagine many things. We can “prove” very easily that the world should be very, very different from what it is as the injustices are huge. It’s, however, impossible to get people agree on any really fundamental change to the present state of the world. Furthermore all fundamental changes would involve central planning at a level that would dwarf that tried in Soviet Union in the past. It would simply be impossible to get it working.

    I’m for change. I’m for expanding support of the development of poor countries, but I don’t believe that fundamental changes can be implemented by central planning or by any other means the could be initiated rapidly in a way that will finally help anyone. I’m not a expert on development aid, but I have worked on that as well spending about two months in Africa discussing with local people and with representatives of providers of aid. Reading books by both optimists and doubters is also revealing, but it’s easier to put those books in context with even that amount of practical experience that I have.

    Welfare/development economists like Partha Dasgupta and Amartya Sen may offer much worthwhile and relevant for climate policies that people working with integrated assessment models either miss or at least fail to communicate clearly.

  123. johnrussell40 says:

    @Tom… everything you say is correct except the ‘no cost’ bit.

    Historically lead was added as a lubricator for the valves of ICEs. The cost was thousands of cars having to have cylinder heads fitted with hardened valve seats. That was no problem other than inertia in the automotive industry. Once the intention to drop lead was announced, manufacturers all started fitting hardened seats during production; then there was just the need to wait until all the older engines were out of warranty so the cost of uprating with new valve seats was down to the owner. So there was a cost but not for industry: in fact there was a bit of money (and an increase in GDP?) to be made supplying and fitting exchange heads.

  124. Tom Curtis says:

    johnrussell, I sit corrected. However, I do remember that leaded petrol was sold at a premium relative to unleaded petrol, at least in Australia. Was the lifetime cost of the hardened valve seats greater than that premium?

  125. johnrussell40 says:

    I’m not sure, Tom, but I believe here in the UK the cost of leaded was pushed up artificially to encourage the change to unleaded. Then leaded fuel was banned after a couple of years, which was considered to be enough time for manufacturers to make the spec. changes. For a while lead substitutes were available at a price for people with high performance cars to add to their petrol. I don’t think, once they’d made the production and procurement changes, it increased the costs of engines for the manufacturers.

    Overall, your point stands: it was no big deal, and there was little resistance, to dropping lead in petrol once it was realised the harm it was doing particularly to children living near busy roads. Now of course it’s diesel particulates that we’ve suddenly realised are the new threat.

  126. Mark Bahner says:

    om Curtis writes, “It would have been nice if Mark Bahner would have got his story about leaded petrol correct. … To eliminate lead from petrol, all that was needed was to cease adding tetraethyllead to the mix – something that would have required no expenditure.”

    “No, Tom, it would be nice if you–and people like you who routinely write on the Internet about matters well outside of your fields of expertise (e.g., Tim Lambert) would show a little less arrogance and a little more respect.

    Here’s what you write about yourself: “By training, I am a philosopher, with a particular interest in ethics, logic and epistemology (in that order).”

    Well, I have a Bachelor’s degree in Mechanical Engineering, and a Master’s Degree in Environmental Engineering (Air Pollution Option), and have spent more than 30 years in the design and analysis of energy systems and environmental issues related to energy. As a Graduate Teaching Assistant, I *taught* students about NOx, HC, and CO controls for automobiles (and other equipment).

    This is absolutely NOT to say that I know everything or am always right, or especially that my moral sensibilities match others’. It’s just to say that you should modify your approach significantly. (And I don’t always do this myself, so feel free to point out when I don’t.) You should have said something like, “Mark, didn’t eliminating tetra-ethyl lead cost nothing?”

    And I would have responded, “No, there were the costs associated with modifying engines to deal with the reduced lubricity that TEL supplied, and there were also increased costs to refining to obtain the required octane levels to avoid pre-ignition.” I might have even thrown in that the MTBE (methyl tertiary butyl ether) used in U.S. when lead was removed turned out to be no environmental picnic either. (But far, far, far less damaging then TEL.)

    http://www.epa.gov/mtbe/gas.htm <–(Heh, heh, heh…notice the **U.S. EPA** website doesn't even mention the environmentally damaging aspects of MTBE!)

    And then you and I could absolutely agree that the overall health benefits of removing TEL so overwhelmed the relatively small increased costs (which were even partially…or maybe even fully offset by reduced maintenance costs), that removing TEL is one of the great environmental success stories of the latter half of the 20th century.

    P.S. The reason unleaded gasoline cost *less* in Australia was that your government not only taxed away the difference in refining cost (where leaded gasoline had a lower refining cost), but they even added an additional amount to make unleaded seem lower in cost, to you customers.

  127. Mark Bahner says:

    Oops. That should have been, “No, there were the costs associated with modifying engines to deal with the reduced lubricity that from removing TEL…”

  128. My understanding (out of memory without checking literature) of the history is a series of unintended consequences.

    1) Improving the efficiency of internal combustion engines required higher compression ratios.
    2) Higher compression ratios required gasoline that does not ignite prematurely from heating by compression. TEL turned out to be a good substance for that. It had the positive unintended consequence of lubricating the valves.
    3) Lead turned out to have two serious problems: direct health effects, and even more importantly indirect health effects, because lead poisoned catalyzers making impossible the reduction of smog that was a very severe health effect under conditions like those of Southern California. Switching to unleaded gasoline started originally in California to solve this smog problem, but direct health effects of lead were an important factor in the spread of the requirement. Thus it was not an unintended consequence but part of justification.
    4) MTBE was found to be a good alternative for TEL in raising the octane rating. It’s not seriously poisonous and it seemed to be environmentally benign.
    5) MTBE turned out to have a problem from leaking gasoline storage tanks. It’s water soluble and tastes bad in very small concentrations. Therefore it caused a lot of damage in U.S. in particular (In much of Europe it was used longer without similarly serious problems, but by now its use has been stopped here as well.)

    The original motivation for the use of ethanol in gasoline in U.S. was the replacement of MTBE by ethanol. Now the amount of ethanol has been raised for other reasons as well. If this is accepted as a sound development, then the unintended consequence of starting to add ethanol in gasoline has been positive, i.e., speeding up the positive development.

  129. Mark,
    It would be nice if everyone showed a little less arrogance and a little more respect. As I remember it, your claim was that an RCP8.5 emission scenario is nonsense/impossible. I still don’t think anything you’ve shown proves this to be true, which was Tom’s basic point. I’m more than happy to accept that we may well find ourselves following a different emission scenario because technology develops in a way that makes alternatives more viable. However, I fail to see how this makes RCP8.5 nonsense/impossible as a similar argument could be made that technology may also make it economically viable to continue extracting and using coal.

    My issue is not that I don’t think that we are capable of following a different emission scenario. As I said, I can quite believe that technology will make alternatives viable. However, an argument that essentially says “don’t worry, technology development means we can’t follow an RCP8.5 emission scenario” seems somewhat weaker than an argument along the lines of “an RCP8.5 emission scenario has sufficient risks that we should do all we can to ensure that technology allows/prevents us from following this emission scenario”. If we don’t recognise/accept the dangers associated with, for example, an RCP8.5 emission scenario then there’s no formal incentive to avoid developing technology that makes continued coal extraction economically viable.

  130. AnOilMan says:

    Mark I’m reading your original post again and some of your claims;
    https://andthentheresphysics.wordpress.com/2014/04/14/discounting-the-future/#comment-19685

    You are advocating for Geoengineering the planet to a new state. Doing nothing for 100 years means exactly that. Heat it, and acidify the ocean. You’ve made claims that reducing Carbon to pre-industrial 280PPM will fix the problem in the future. There is no evidence to say that a dramatic shift in world ecological systems is reversible or even stoppable if it goes to far. You’d need a substantially different analysis to determine those factors.

    You’ve used the example of war.. but neglected that wars are often fought over resources which are going to become more scarce going forward. Resources like water and food. All the western military think tanks are saying that Climate Change will bring war, and that climate change will push nations beyond their tipping points. It will cost substantially more to pay for these wars.
    http://www.rtcc.org/2013/03/28/security-risks-of-climate-change-prompt-military-review/

    There are many examples of pushing species to their limits, and it is a gawd awful expense to bring them back. Look up the sheer amount of work going into BC fisheries. Or the severely deduced fishing on the East Coast brought on by over fishing. Climate Change will bring that harm wholesale to large parts of the world. It will cost substantially more to reverse that kind of damage if its possible at all.
    http://www.theglobeandmail.com/news/national/bc-salmon-fisherys-decade-of-decline/article4187755/
    http://en.wikipedia.org/wiki/Collapse_of_the_Atlantic_northwest_cod_fishery

    Do people of 2100 have a right to be pretty angry about global warming? That probably depends on who you ask Mark. Who will be the speaker for the dead?

  131. Mark Bahner says:

    ATTP writes, “As I remember it, your claim was that an RCP8.5 emission scenario is nonsense/impossible. I still don’t think anything you’ve shown proves this to be true,…”

    What do you think it would take? To re-cap:

    1) World coal consumption in 2000 was about 5.1 billion short tons, and the two biggest producers (by far) were China and the U.S. at 1.5 billion tons and 1.1 billion tons, respectively.

    2) According to RCP8.5, world coal consumption will increase continuously throughout the entire 21st century, reaching approximately 41 billion short tons in 2100 (a factor of 8 more than in 2000). Assuming that all countries increased by that factor of 8, U.S. coal production would need to be about 8.8 billion tons, and China’s coal production would need to be 12 billion tons.

    3) Since 2000, U.S. coal production has actually *decreased*. China’s coal production was 3.7 billion tons in 2013, and consumption was 3.6 billion tons. China’s government thinks that China’s coal consumption will peak in 2020 at 4.7 billion tons, and decline by 0.43 percent per year thereafter.

    How can you make those numbers work out to 41 billion tons in 2100? Do you think that the Chinese government is so far off that, rather than consumption being less than 3 billion tons in 2100, it will instead be 12 billion tons? Or that the U.S., which has actually seen a decrease in production from 2000-2100, will somehow rebound to be producing 8.8 billion tons in 2100?

  132. Mark,
    How does your response suggest that it’s impossible? I get the feeling that you’re not really getting the point. It’s not that I think you’ll be wrong. It’s that I’m not convinced that you’ll definitely be right.

  133. Mark Bahner says:

    “Coal making a comeback.” (Referring to the United States.)

    That’s pretty hard to reconcile with this table, which shows 26 states that have ever produced coal up to the year 2012. In *not one* state was 2012 a record year.

    Now look at the biggest-producing states.

    1) Wyoming’s 2012 production was down by 14 percent from its record year of 2008.

    2) West Virginia’s 2012 production was down by 32 percent from its record year of 1947.(!)

    3) Kentucky’s 2012 production was down by 48 percent from its record year of 1990.

    4) Pennsylvania’s 2012 production is down by a *whopping* 80 percent from its record year of 1918.(!!!)

    5) Illinois’ 2012 production is down by 46 percent from its record year of 1918.(!!)

    And to top it off, why is U.S. coal allegedly “making a comeback”? Mainly because, “…natural gas prices have edged upward, and the frigid winter created unprecedented energy demands.”

    The frigid winter caused by global warming? Should we expect more and more frigid winters as the 21st century continues?

  134. Mark Bahner says:

    Oops. I forgot to include a link to the coal production table from the National Mining Association:

    http://www.nma.org/pdf/c_production_state_rank.pdf

  135. Mark Bahner says:

    A final comment: “If externalities are free…”

    There have been many signficant regulations targeting air emissions from coal-fired power plants in the last several years, including the Cross State Air Pollution Rule (CSAPR), aimed at SOx and NOx, and the Mercury and Air Toxics Standard (MATS), aimed at mercury, arsenic, lead, acid gases and other hazardous pollutants. Here’s what the Union of Concerned Scientists has to about those rules:

    http://www.ucsusa.org/assets/documents/clean_energy/EPA-standards-and-electricity-reliability.pdf

    From that report:

    “The Energy Information Administration (EIA) projects coal generation will decline from 45 percent of total generation in 2010 to 39 percent in 2035, with 33 gigawatts (GW) of coal-fired capacity retiring over that period (EIA 2012) due to multiple economic factors. It is also unlikely that much, if any, new conventional coal capacity will come on line beyond a few plants already in the pipeline. In fact, in 2011 the EIA projected only 2 GW (3 units) of new coal plants built through 2035, in addition to the 11.5 GW of planned additions by 2015 (EIA 2011).”

    Recent retirements coal-fired power plant retirements have exceeded even the expectations of a few years ago:

    http://www.eia.gov/todayinenergy/detail.cfm?id=15491

  136. Mark,
    I really don’t think you’re quite getting the point that others are trying to make. It’s not that you won’t turn out to be roughly correct, it’s that it’s not obvious that that will be the case. Anyway, it’s late and I’ve rather lost interest in having discussions with people who are convinced that they’re absolutely correct.

  137. AnOilMan says:

    War is very expensive.

    Climate Change will bring war (At least most governments are convinced this is true);
    http://www.rtcc.org/2013/03/28/security-risks-of-climate-change-prompt-military-review/

    In the case of Climate Change, its a Pyrrhic Victory, because you’re simply fighting over left over resources.

    In Mark’s plan, we’re fighting for devastated ecosystems, and he has absolutely no clue how much it costs to restore them. He’s made no effort to understand this. That also means his numbers are wrong.

  138. AnOilMan says:

    War is Tax.

    Combine that with what that general said;
    “This is like getting embroiled in a war that lasts 100 years. That’s the scariest thing for us,” he told RTCC. “There is no exit strategy that is available for many of the problems. You can see in military history, when they don’t have fixed durations, that’s when you’re most likely to not win.”

    So the good news is that Climate Change is 100 years of high taxes. Sign me up for that! 🙂

    “The U.S. has paid for its wars either through debt (World War II, Cold War, Afghanistan/Iraq), taxation (Korean War) or inflation (Vietnam). In each case, taxpayers have been burdened, and private sector consumption and investment have been constrained as a result. Other negative effects include larger budget deficits, higher taxes, and growth above trend leading to inflation pressure. These effects can run concurrent with major conflict or via lagging effects into the future. Regardless of the way a war is financed, the overall macroeconomic effect on the economy tends to be negative.”
    http://www.thereformedbroker.com/wp-content/uploads/2012/02/Economic-Consequences-of-War.pdf

  139. AnOilMan says:

    More war… happening now…
    http://www.dailyclimate.org/tdc-newsroom/2009/05/glaciers-go-leaving-drought-conflict-and-tension

    Did Climate Change start it? Heck no. But is it inflaming the problem? Heck yeah.
    http://www.cbc.ca/edmonton/features/dying-for-a-drink/
    “Environmental concerns, mainly over water, caused close to half of the country’s social conflicts between 2006 and 2011. Those conflicts wounded thousands and killed at least 195 people. It’s a battle many Peruvians say they’re losing, even as they ask the rest of the world for help — and beg Canada to pay attention.”

  140. Pingback: Another Week of Climate Disruption News, April 20, 2014 [A Few Things Ill Considered] | Gaia Gazette

  141. Tom Curtis says:

    Mark Bahner (April 19, 2014 at 2:02 am)
    First, sorry for the delayed response (due to illness).

    Second, you appear to have misunderstood me. My comment with regard to unleaded petrol was referring to petrol to which lead had not been used an additive. I was not referring to specific varieties of petrol with no lead, but with other additives to maintain high octane levels. I was making the simple point that you can make a cheaper petrol by refining it to the stage were lead is normally added to it, then simply not adding lead. As you have one less process of production, and one less ingredient, it follows that the petrol so produced will be cheaper, if with a lower octane level.

    I apologize for the confusion in not recognizing the potential ambiguity between the simple English term, “unleaded”, and the recently coined technical term “unleaded”. I also apologize in that my reference to what was formerly known as “standard” petrol confused the issue (due to my mistake in not realizing that it also had a lead content).

    Having said that, I don’t care how many degrees you have in the subject, my point stands. If you process petrol to a certain point and add lead, then you can process it to the same point and not add lead, and the latter process will be cheaper, and result in a cheaper product.

    Third, you might well argue (and I would not reject the claim) that once all factors are taken into account (harder valve seats, reduced compression ratio and consequent reduction in designed engine efficiency etc), the total transport cost of simply removing the lead from current petrol mixes would by higher than the cost retaining leaded petrol. However, once additional costs are brought into the equation, there is no basis to stop at mere transport costs. Including health costs as well means that not adding lead to petrol has always been the cheaper option. Consequently there has been no time since the invention of leaded petrol where general use of leaded petrol has been the cheaper option for society. That is particularly the case as alternative means of increasing octane levels (ethanol) have always existed, as has the option of the use of diesel engines. Consequently your claim that the move away from leaded petrol was restricted by lack of wealth is false. It may have been catalyzed by an increase in wealth – but that is not the same thing.

    In like manner, it is cheaper now to mitigate climate change than to not do so. We may prefer to leave it to our descendants to clean up our mess, but that simply means pushing onto our descendants the burdens of our excesses.

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