NYT Slams Bjørn Lomborg’s New Climate Economics Book

NYT Slams Bjørn Lomborg’s New Climate Economics Book

Stiglitz, Stern and Lomborg. Left Joseph Stiglitz, Public Domain, Link. Middle Lord Nicholas Stern, By Royal Society uploader – Own work, CC BY-SA 4.0Link. Right Bjorn Lomborg. Photo by Emil Jupin – link

Guest essay by Eric Worrall

According to Nobel Prize winner Joseph E. Stiglitz, writing in NYT, Bjørn Lomborg’s new book downplays the risk of allowing global warming to occur, and ignores a study prepared by himself and Lord Nicholas Stern which suggests climate action is affordable. But Stiglitz and Stern’s own study seems to gloss over the details of how society can afford to pay for their proposed low carbon transition.

Are We Overreacting on Climate Change?

By Joseph E. Stiglitz

July 16, 2020, 5:00 a.m. ET

How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet
By Bjorn Lomborg

The thesis of Bjorn Lomborg’s “False Alarm” is simple and simplistic: Activists have been sounding a false alarm about the dangers of climate change. If we listen to them, Lomborg says, we will waste trillions of dollars, achieve little and the poor will suffer the most. Science has provided a way to carefully balance costs and benefits, if we would only listen to its clarion call. And, of course, the villain in this “false alarm,” the boogeyman for all of society’s ills, is the hyperventilating media. Lomborg doesn’t use the term “fake news,” but it’s there if you read between the lines.

As with others in Lomborg’s camp, there’s the pretense in this book of balance and reference to careful studies. Yes, climate change is real. Yes, we should do something about it. But, goes his message, let’s be real, there are other problems, too. Resources are scarce. The more money we spend on climate change, the less we have to grow the economy; and as we all know (or do we?) everybody benefits from growth, especially the poor. And besides, there’s not much we can do about climate change.

Somehow, missing in his list of good policy measures are easy things like good regulations — preventing coal-burning electric generators, for example. Lomborg, a Danish statistician, exhibits a naïve belief that markets work well — ignoring a half-century of research into market failures that says otherwise — so well, in fact, that there is no reason for government to intervene other than by setting the right price of carbon.

Assessing how best to address climate change requires integrating analyses of the economy and the environment. Lomborg draws heavily on the work of William Nordhaus of Yale University, who came up with an estimate of the economic cost to limiting climate change to 1.5 to 2 degrees Celsius above preindustrial levels. While Nordhaus seems to think it’s enormous, an international panel chaired by Lord Nicholas Stern and me (called the High-Level Commission on Carbon Prices), supported by the World Bank, concluded that those goals could be achieved at a moderate price, well within the range of what the global economic system absorbs with the variability of energy prices.

This book proves the aphorism that a little knowledge is dangerous. It’s nominally about air pollution. It’s really about mind pollution.

Joseph E. Stiglitz was chief economist of the World Bank from 1992 to 2000 and was awarded the Nobel in economic science in 2001.

Read more: https://www.nytimes.com/2020/07/16/books/review/bjorn-lomborg-false-alarm-joseph-stiglitz.html

The 2017 study authored by Stiglitz and Stern itself is an interesting document, it leans heavily on the idea of government imposed carbon taxes, backed by government investment in public transport and “laying the groundwork for renewable-based power generation”. The Stiglitz and Stern report recommends a carbon price of “at least US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030, provided a supportive policy environment is in place“, and lists “co-benefits” such as reducing road congestion and air pollution, as ordinary people are priced out of private automobile ownership.

What appears to be missing from Stiglitz and Stern is any realistic estimate of the capital cost of going renewable. They briefly mention nuclear as an option, but their study mostly seems to assume if the carbon price pain knob is turned up high enough, it will encourage the innovation required to achieve the desired outcome.

Stiglitz and Stern criticise Lomborg’s suggestion that radical restructuring of the energy industry is too expensive, but they don’t seem to provide their own detailed transition plan to demonstrate renewables are affordable. I’m talking about an actual priced up transition plan; tonnes of concrete required, solar panels required, battery backup required, energy required to process and refine these materials, maintenance costs.

When you consider the magnitude of material and engineering required, the implausibility of the proposed transition to renewables is obvious.

Consider the problem of energy storage. Energy storage is critical to converting intermittent renewable energy to the reliable dispatchable energy we are used to. And I’m not talking about a few minutes of Energy storage; renewable energy droughts, prolonged periods of adverse weather conditions, can last for months or even years.

The following is from THE “NEW ENERGY ECONOMY”: AN EXERCISE IN MAGICAL THINKING by Mark P. Mills Senior Fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering and Applied Science.

Battery storage is quite another matter. Consider Tesla, the world’s best-known battery maker: $200,000 worth of Tesla batteries, which collectively weigh over 20,000 pounds, are needed to store the energy equivalent of one barrel of oil. A barrel of oil, meanwhile, weighs 300 pounds and can be stored in a $20 tank. Those are the realities of today’s lithium batteries. Even a 200% improvement in underlying battery economics and technology won’t close such a gap.

The annual output of Tesla’s Gigafactory, the world’s largest battery factory, could store three minutes’ worth of annual U.S. electricity demand. It would require 1,000 years of production to make enough batteries for two days’ worth of U.S. electricity demand. Meanwhile, 50–100 pounds of materials are mined, moved, and processed for every pound of battery produced.

Read more: https://media4.manhattan-institute.org/sites/default/files/R-0319-MM.pdf

Unless green advocates like Stiglitz and Stern address in detail how this gap between capabilities and engineering requirements can be bridged, it will be difficult to take their criticism of Lomborg seriously.

Imagine if say a hurricane strength blizzard hit the East Coast, blacking out the sky with storm clouds for days, forcing wind turbines to furl their blades to survive the blast, covering large areas of the USA with a thick blanket of snow and ice, driving millions of people to turn up their home heating to maximum to avoid freezing to death.

How many thousands of years worth of battery backup production would be required in this scenario to keep the grid operating, until benign weather conditions returned?

Green advocate economists seem to want to leave the implementation details to the engineers, which given strong indications in various studies that renewables are impossibly expensive, seems a remarkable blind spot in their claims.

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July 23, 2020 at 08:12PM