Since I’ve commented on errors in Tol’s work before, I thought I might briefly comment on his Correction and Update: The Economic Effects of Climate Change. He corrects the errors in his 2009 meta-analysis (thanking Bob Ward for finding a small error) and updates the analysis using some newer studies.
The new paper corrects the original figure, which showed a net benefit (considering the mean) for warming up to just over 2 degrees. The updated figure (shown below) reduces this slightly, but doesn’t change it much. However, it does illustrate – more clearly – that there’s really only one study (Tol 2002) that shows a net positive benefit (for completeness : there is a second, but it is +0.1% for a warming of 2.5 degrees).
What’s maybe more interesting, is that Tol updates the analysis by including 7 newer studies. The result is shown in the figure below, and appears about the same as Grant McDermott found when he did something similar. With the new studies included, there is essentially no positive benefit for future warming. This seems like quite a significant change to me, and I’m looking forward to Matt Ridley pointing this out in his next article 🙂
This update looks both interesting and quite significant. However, what I’m unsure of is how this compares to what was presented in the latest IPCC reports. What’s presented in Tol’s analysis is the welfare-equivalent income gain or loss. In WGII, the headline numbers were
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).
So, this the annual cost of climate change.
In WGIII, the headline numbers were
Under these assumptions, mitigation scenarios that reach atmospheric concentrations of about 450ppm CO2eq by 2100 entail losses in global consumption—not including benefits of reduced climate change as well as co‐ benefits and adverse side‐effects of mitigation of 1% to 4% (median: 1.7%) in 2030, 2% to 6% (median: 3.4%) in 2050, and 3% to 11% (median: 4.8%) in 2100 relative to consumption in baseline scenarios that grows anywhere from 300% to more than 900% over the century. These numbers correspond to an annualized reduction of consumption growth by 0.04 to 0.14 (median: 0.06) percentage points over the century relative to annualized consumption growth in the baseline that is between 1.6% and 3% per year.
So, this is how mitigation will influence the annual growth rate : essentially, not much – so small as to almost be in the noise.
What I’m unsure of is quite how one can compare the welfare-equivalent income gain or loss presented in Tol’s meta-analysis, with what’s been presented in the WGII and WGIII reports. If anyone knows how this is defined and how it can be compared to the WGII and WGIII numbers – if it can – maybe they could explain in the comments.