From Science Matters
By Ron Clutz
Bjorn Lomborg set the record straight at LinkedIn The New York Times’ stunningly false and deceptive hit piece to preserve climate alarmism. Excerpts in italics with my bolds.
The piece consists of Stiglitz enumerating four specific and compounding mistakes that I apparently make, and then another six separate observations. I will go through all of them below, starting with the four mistakes.
My first “mistake”
My first mistake is that I draw “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.” Instead the High-Level Commission on Carbon Prices, which Stiglitz co-authored, showed that 1.5°C-2°C goals “could be achieved at a moderate price.”
This is triply wrong. I don’t rely on Nordhaus for the cost on limiting temperature rise for 1.5°C to 2°C, simply because Nordhaus does not make that estimate. Nordhaus explicitly writes, as Stiglitz would know had he read Nordhaus or my book: “A limit of 2°C appears to be infeasible with reasonably accessible technologies even with very ambitious abatement strategies.”
Secondly, Stiglitz claims that his report estimates “a moderate price” for reaching the Paris agreement. This is false. There is no estimate of the total economic cost of a 2°C or 1.5°C target in his High-Level Commission on Carbon Prices.
Compounding Stiglitz’ error is the fact that the background report for his high-level commission does indeed list the UN Climate Panel cost estimate for reaching 1.5-2°C at more than 4% of GDP by 2100 (p2), which makes Nordhaus’ 1.38% GDP economic cost at the lowest temperature scenario of 2.35°C by 2100 substantially smaller (not larger, as Stiglitz claims).
Stiglitz throughout his piece neglects to inform the reader that Nordhaus is not just any old economist, but actually the only climate economist to get the Nobel prize for his work on climate economics. For reference, Stiglitz got his Nobel prize in economics for analyses of markets with asymmetric information like the selling and buying of used cars.
For the first mistake, Stiglitz makes two false claims and no correct, relevant claims.
My second “mistake”
My second mistake is “Nordhaus’s and Lomborg’s underestimation of the damage associated with climate change.” Stiglitz is in reality informing us that he knows much better than the world’s only climate Nobel economist.
But curiously, Stiglitz never tells us what the right cost is. As such, Stiglitz makes an absurd claim, essentially asserting he knows better than the best peer-reviewed evidence — but just couldn’t be bothered to share that knowledge publicly.
Stiglitz gives one indication of his knowledge on this matter. He claims that a significant part of the cost of climate change “includes more extreme weather events — more intense hurricanes, more droughts, more floods, with all the devastation to life, livelihood and property that accompanies them. Yet, again, he seems to have forgotten to actually acquaint himself with the best evidence on the science and economics of extreme weather events. As the leading researcher on economic impacts of extreme weather events says, Stiglitz is “just wrong.”
But more importantly, Stiglitz is just cherry-picking and ignoring the actual data. He picked the costliest recent data point and he neglects that the trend for the US (and similarly for the world) is declining.
Stiglitz is simply doubly wrong on his only indication of how Nobel Laureate Nordhaus and I should be wrong, so for the second mistake, Stiglitz makes two false, one unsubstantiated and no correct, relevant claims.
My third “mistake”
Stiglitz suggests that “A third critical mistake, compounding the second, is not taking due account of risk.” Ah, if only the world’s only actual Nobel laureate in climate economics had thought of incorporating risks.
Of course, Stiglitz could still have quibbled about a different way to model risk, and added his own take on this. But he does not. He simply — and falsely — suggests that Nordhaus or I have not taken this obvious point into consideration.
Specifically, Stiglitz assuredly tells us that the best damage estimates are underestimates because “as we learn more about climate change these best estimates keep getting revised, and, typically, in only one direction — more damage and sooner than had been expected.” No, they do not. This is the kind of claim one makes if one gets most of one’s climate information from news media.
For the third mistake, Stiglitz makes two false, one unsubstantiated and no correct, relevant claims.
My fourth “mistake”
Stiglitz seems to claim that Nordhaus and I use a discount parameter that is too low for his liking. I cite the whole paragraph, because it is unclear what his actual point is except a rant against the Trump administration:
Stiglitz apparently suggests that Nordhaus and I use a 7 percent discount rate to spew out the numbers that are in my book. This is demonstrably false. Perhaps Stiglitz knows he’s fibbing, given that he settles for criticizing Trump and then conflating the 7% with the “models Lomborg loves.”
Instead, Nordhaus’ discount rate is calibrated to the real interest rates, meaning a 4.8% discount rate in 2015, declining to 3.5% in 2100.
As he would know, having been World Bank chief economist, it is one thing what rich, liberals in Manhattan want for a discount rate. Most of the rest of the world has much higher discount rates. When we worked with the government of Haiti, the central bank decided on 12% (even contemplating 20%), while Ghana decided 8%.
For the fourth mistake, Stiglitz makes one false and no correct, relevant claims.
Media drives alarmism
He seems to brush off my points that the hyperventilating media is one of the main causes of alarmism simply by saying “fake news”:
For example, I outline how New York Times claims that South Vietnam by 2050 will “all but disappear” because it will be “underwater at high tide.” While the story was reported in almost all media, it was clearly incorrect. Because almost all of South Vietnam is already under the high tide mark today, and almost all of South Vietnam is already well-protected today:
Stiglitz claim that I miss discussing good regulations as a way to tackle climate.
More importantly, Stiglitz seems to have missed at least the last third of my book. Here I talk about
1. Innovation: how we should invest $100 billion per year in green R&D (regulation, not taxation)
2. Adaptation: regulation like zoning, building regulation and more pervious city surfaces (to ensure less flooding)
3. Geoengineering: which will be almost entirely a regulatory approach
4. Prosperity: mostly about better policies including regulatory policies
Stiglitz’ claim that I ignore regulation is blatantly false.
Wall Street underwater
Almost bizarrely, Stiglitz chides me for not including in my book that Wall Street could be underwater by 2100:
The research very clearly shows that at least when an area has sufficient value (as Wall St and surrounding areas certainly have) all will be safeguarded through adaptive policies (like sea walls etc.). I even show this in a graph in the book, based on this paper. We only see significant flooding when we disregard adaptation:
So when Stiglitz chides me for not including that Wall Street might be underwater in my book, it is because such a claim would be false. His is a good example of bad information from hyperventilating media.
Stiglitz writes a slyly derogatory paragraph about the think tank I work for, Copenhagen Consensus:
The paragraph doesn’t seem to say anything but that the experts are conservative and that we didn’t include any “true experts” on climate science.
On his first claim, we have worked with more than 300 of the world’s top economists and seven Nobel Laureates. Our main focus is all the world’s problems, not just climate change, so many are experts in the economics of malaria, infrastructure, water, education etc. We certainly don’t have a ‘conservative’ bias — we’ve actually invited Stiglitz to be a member of several eminent panels together with his Nobel colleagues. But it also shows that Stiglitz seems to be suggesting that only liberal economists such as himself can be trusted to help set priorities for the world.
On his second claim, we have worked with many climate economists, and when we did our big climate consensus, we worked with 27 of the world’s top climate economists, publishing the results as a book with Cambridge University Press, which even got a favorable quote from the IPCC’s chairman (“This book provides not only a reservoir of information on the reality of human induced climate change, but raises vital questions and examines viable options on what can be done to meet the challenge.”).
Stiglitz’ derogatory two claims are simply incorrect.
Lack of prioritization
One of the key points of my book (and the Copenhagen Consensus’ work) is that we have to prioritize. No matter the amount of resources available, there is never enough to do everything, and hence we have to make sure we spend resources where they can do the most good first. The allocation of scarce resources with alternative uses, of course, is the key definition of economics.
Obviously, money from a tax can be used on many things (some of which I’m sure Stiglitz wouldn’t like), but they can still only be used once. And the point is, that with more stringent climate policies, GDP will be slightly lower, hence there will be less in total to spend.
The new IPCC report shows end-of-world
Stiglitz finally claims that because I cite the UN Climate Panel so often, one could believe I might be right. But, he comforts his readers, “nothing could be further from the truth”:
What I say in the book is also what is in the IPCC 2018 1.5°C report.
Then Stiglitz goes on to make the exact scare scenario in which the media excels and that I have criticized. The 60 feet sea level rise is from a world in an entirely different part of the state space. He knows very well that such statistics are only meant to scare but not informative for what will happen for us, in this part of the state space. That, of course, is exactly what the IPCC reports are about. They talk about a high outcome of 3 feet of sea level rise by 2100. The only reason to throw out 60 feet is to scare people silly.
Making 12 substantial criticisms of my book and that they are all false, is quite an achievement. It is hard not to conclude that Stiglitz’ review of my book is a deceptive and false hit piece. It is perhaps not surprising that Stiglitz actually said that he was going to give the book a bad review even before he read it. In many ways, it seems like he still hasn’t read it.
I have asked New York Times to rectify this terrible article.
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