Last week economist William Nordhaus slammed global warming deniers and explained that the cost of delaying action is $4 Trillion. As I wrote, Nordhaus’s blunt piece — “Why the Global Warming Skeptics Are Wrong” – is worth reading because, like most mainstream climate economists, he is no climate hawk.

A key reason for that, I believe, is a chronic low-balling of future temperature rise and hence future climate impacts and hence future climate damages by the mainstream economic profession. Nordhaus’s piece proves that point.  In his argument on why CO2 is a pollutant and negative externality—”a byproduct of economic activity that causes damages to innocent bystanders”– he writes:

The question here is whether emissions of CO2 and other greenhouse gases will cause net damages, now and in the future. This question has been studied extensively. The most recent thorough survey by the leading scholar in this field, Richard Tol, finds a wide range of damages, particularly if warming is greater than 2 degrees Centigrade.⁷ Major areas of concern are sea-level rise, more intense hurricanes, losses of species and ecosystems, acidification of the oceans, as well as threats to the natural and cultural heritage of the planet.

That highlighted sentence may strike some of you as a bit strange. After all, the chances that warming would be less than 2°C have been pretty small for quite some time even with aggressive action and essentially nonexistent without it. So I went to the original Spring 2009 paper in The Journal of Economic Perspectives, “The Economic Effects of Climate Change” (online here).

Note: Figure 1 shows 14 estimates of the global economic impact of climate change, expressed as the welfare-equivalent income gain or loss, as a function of the increase in global mean temperature relative to today. The circular dots represent the estimates (from Table 1).

Yes, a spring 2009 review of the economic impact of climate change reviewed 14 studies — and not single one of them looked at warming of more than 3°C! And Tol is, according to one of the leading scholars in the field, “the leading scholar in the field.” And that is “the most recent thorough survey.”

Who says economics is the dismal science? It’s the super-optimistic science. If you could ask climate economics to sum itself up in one word, it would be “cheerful.”

Note that if you check out Table 1, you’ll see that the 2 estimates of the impacts of 3C warming are Nordhaus himself from 1994 and 1995. Indeed, 4 of the 9 estimates of the impacts of 2.5C damage come from either 1995 or 1996. The head-exploding estimate that 2.5C warming could actually be a significant positive for welfare is from 1996 also. Way to stay up to date on the science.

As readers of Climate Progress know, the recent scientific literature has amped up the likely consequences of inaction considerably (see “An Illustrated Guide to the Science of Global Warming Impacts: How We Know Inaction Is the Gravest Threat Humanity Faces.”

A 2010 AAAS presentation on “the Asymmetry of Scientific Challenge“ concluded: New scientific findings since the 2007 IPCC report are found to be more than twenty times as likely to indicate that global climate disruption is “worse than previously expected,” rather than “not as bad as previously expected.”

Multiple independent analyses conclude that we are on track for total warming of some 5°C by century’s end and more after that.  What would be the impact of that level of warming? There is a clue inside Nordhaus’s 2008 book, A Question of Balance. Nordhaus explains that in his DICE model, atmospheric concentrations of CO2 only hit 685 ppm in 2100 and “measured mean global surface temperature …  is projected in the DICE model  to increase by 3.1°C in 2100 relative to 1900″ or a mere 2.4°C between 2005 and 2010. But he also notes that

… the DICE model’s  projected baseline increase in temperature for 2200 relative to 1900 is very large, 5.3°C. The climate changes associated with these temperature changes are estimated to increase damages by almost 3% of global output in 2100 and by close to 8% of global output in 2200.

That 8% certainly seems closer, though still low. It’d be quite interesting if somebody ran an impacts estimate using the latest science.

Now you may ask how it is that this supposedly “most recent thorough survey” was blissfully out-of-date from a scientific perspective (though not apparently an economic one) before it was even published? The answer is really that the mainstream climate economics community is generally years behind where the science is.

Consider this jaw-dropper from Tol’s  supposedly definitive paper:

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An amendment by Sen. John Hoeven (R-ND) to force immediate approval of the Keystone XL tar sands pipeline failed to get the 60 votes it needed, on a 56-42 vote. Democrats Max Baucus (MT), Begich (AK), Casey (PA), Conrad (ND), Hagan (NC), Landrieu (LA), Manchin (WV), McCaskill (MO), Pryor (AR), Tester (MT), and Webb (VA) voted with Senate Republicans to strip authority for the pipeline’s approval from the president of the United States. Despite the intensity of climate activism in the region, New England Republicans Ayotte (NH), Brown (MA), Collins (ME), and Snowe (ME) stayed with the Republican bloc in favor of the Keystone XL pipeline. The amendment was attached to the unrelated highway funding bill.

Moments earlier, Republicans killed an amendment that would have approved the pipeline if it used American steel and kept the oil for American use.