Voodoo Economists, Part 3: MIT and NBER (and Tol and Nordhaus) — the right wing deniers love your work. Ask yourself “why?”
"Voodoo Economists, Part 3: MIT and NBER (and Tol and Nordhaus) — the right wing deniers love your work. Ask yourself “why?”"
“Study Shows Global Warming Will Not Hurt U.S. Economy” — That’s the Heritage Foundation touting a new study by economists from MIT and the National Bureau of Economic Review (NBER).
This study, “Climate Shocks and Economic Growth: Evidence from the Last Half Century” — wildly mistitled and deeply flawed, as we will see — is yet another value-subtracting contribution by the economics profession to climate policy (see Part 2: Robert Mendelsohn says global warming is “a good thing for Canada”).
What makes the paper especially noteworthy, however, is not merely the credentials of the authors, but that they thank such climate economist luminaries as William Nordhaus and Richard Tol for “helpful comments and suggestions.” The only helpful comment and suggestion I can think of for this paper is “Burn the damn thing and start over from scratch.”
Heritage quotes the study:
Our main results show large, negative effects of higher temperatures on growth, but only in poor countries. In poorer countries, we estimate that a 1?C rise [sic -- the Heritage folks haven't mastered the —¦ symbol] in temperature in a given year reduced economic growth in that year by about 1.1 percentage points. In rich countries, changes in temperature had no discernable effect on growth. Changes in precipitation had no substantial effects on growth in either poor or rich countries. We find broadly consistent results across a wide range of alternative specifications.
Heritage then quotes a commentary on the study by right-wing blogger for U.S. News & World Report James Pethokoukis, “Sorry, Climate Change Wouldn’t Hurt America’s Economy.” Pethokoukis also quotes from the study:
Despite these large, negative effects for poor countries, we find very little impact of long-run climate change on world GDP. This result follows from (a) the absence of estimated temperature effects in rich countries and (b) the fact that rich countries make up the bulk of world GDP. Moreover, if rich countries continue to grow at historical rates, their share of world GDP becomes more pronounced by 2099, so even a total collapse of output in poor countries has a relatively small impact on total world output.
[If these excerpts suggest to you that the study authors and the economist commenters are victims of some sort of collective mass hysteria, then you are a getting (a little) ahead of me ... but the fact that thoroughly-debunked denier Ross McKitrick is a commenter on this paper certainly suggests this entire effort is indefensible.]
Pethokoukis himself then offers a conclusion that, though amazing, is not utterly ridiculous given a narrow misreading of this absurdly narrow, easily-misread study:
So if you do buy into the theory of man-made climate change, the next logical move would surely be to do nothing that would slow growth and technologcal advancement in rich countries — such as a cap-and-trade regulatory system or onerous carbon taxes — and do more to accelerate growth in poor ones through free trade and the exporting of democratic capitalism.
Now I am not here to defend the deniers and delayers at Heritage — you can read rebuttals of their post from NRDC (see “Heritage Foundation: Torturing Facts, Sacrificing the Poor“) and DeSmogBlog and WonkRoom (see “Paper Finds Global Warming Clobbers Third World — Heritage Looks For Silver Lining“).
I am here to slam yet another narrowly conceived and seriously flawed “study” by seemingly serious economists, who turn out to be just another bunch of Voodoo Economists aka MEOWs (Mainstream Economists who Opine on Weather): Melissa Dell of MIT (!), Benjamin F. Jones of Northwestern University and NBER, and Benjamin A. Olken of MIT (!) and NBER.
The first point is that this paper does not look at “climate shocks.” It looks at relatively small temperature rises over relatively short periods of time. Since “mean global land temperatures have risen nearly 1—¦C since 1970,” some countries have experienced bigger temperature swings during part of that time.
But we are facing a much, much, much bigger hit this century — a real climate shock where mean global land temperatures will rise more than 5°C with very high certainty and could rise close to 10°C (see Hadley Center: Catastrophic 5-7°C warming by 2100 on current emissions path).
Trying to determine what a 10°C rise in mean land temperatures — or even what a mere 5°C rise — would do to us based on a study of what a 1°C warming has done to different countries is just plain non-scientific and irrelevant. It would be like trying to figure out what a 5°C rise in mean body temperatures would do to us by studying what 1°C warming has done to different people.
Economists just can’t seem to get their head around the fact that on our business as usual emissions path, we are facing a huge non-linear change in the global climate. The biggest impacts we face are simply beyond that which humanity has experienced in recent decades or centuries or even millenia (see, for instance, “Must have PPT #1: The narrow temperature window that gave us modern human civilization” or “Humans boosting CO2 14,000 times faster than nature, overwhelming slow negative feedbacks“).
The MEOWs gamely (or lamely) write:
The warming trend since the 1970s is well-documented (e.g. Brohan et al. 2006) and suggests a linear rate of change that, should it continue, would predict an additional 3—¦C warming by 2100, in line with many climate models.
This is absurdly misleading. Any nonlinear change looks linear to start with. Have the authors not even bothered to read any of the IPCC reports? The science is quite clear that on the business as usual emissions path, the rate of warming accelerates.
The rate of growth of atmospheric concentrations of CO2 this decade is 40% higher than in the 1990s (see “Global carbon emissions jumped 3% in 2007“). Global temperature rise this decade already appears to be considerably higher than in the 1990s (see “Very warm 2008 makes this the hottest decade in recorded history by far“).
By 2100, we are facing 5 feet of sea level rise and the rate of sea level rise may be 10 inches a decade (ultimately rising to 20 inches a decade), which could last for centuries until we are a completely ice-free planet and sea levels are 250 feet higher. We are facing desertification over one third of the planet. We may kill off 70% of the species and turn the ocean into one large, hot, acidic dead zone.
But all the voodoo economist of MIT and NBER can muster is a footnote on page 3:
In the context of future global climate change, other factors such as changing sea levels, increasing frequency of natural disasters, and issues of biodiversity may create additional costs not captured here.
No wonders the deniers love these folks. No wonder the MEOWs come up with idiotic conclusions like the one’s quoted by Heritage and Pethokoukis.
Here’s more evidence of the voodoo these economist do so well, buried in yet another bombshell footnote:
Note that the rapid growth of India and China suggest that they will quickly cross the ‘rich country’ threshold, and therefore in the projections they are not assigned significant negative consequences of climate change.
Yeah, China and India will do just fine when large parts of their country turn to desert, other parts get hit over and over again by record flooding, the inland glaciers disappear eliminating the year-round reservoir for many of their major rivers, the ocean turns into a dead zone, and rising sea levels wipe out their coasts and flood their country with environmental refugees.
But in the model of economists Melissa Dell and Benjamin F. Jones and Benjamin A. Olken, since India and China will soon be rich, “in the projections they are not assigned significant negative consequences of climate change.”
Seriously, you can’t make this stuff up. Well, you can’t. But apparently credentialed economists can.
To all those who think my previous posts have unjustifiably tarred the entire economics profession with the criminal ignorance of a few, I offer this paper — and its commenters — as prima facie proof I have not (and I haven’t even gotten to Parts 4 or 5 yet). Consider the study’s acknowledgment:
We thank Daron Acemoglu, Esther Duflo, Douglas Gollin, Michael Greenstone, Jonathan Gruber, Seema Jayachandran, Charles Jones, Peter Klenow, Ross McKitrick, William Nordhaus, Elias Papaioannou, Richard Tol, Carl Wunsch and numerous seminar participants for helpful comments and suggestions
Please tell me how any serious person, economist or not (as in the case of Dr. Wunsch) could possibly see this work and not
- Rip it to shreds
- Demand that their name not appear in the acknowledgments without massive changes.
The paper should be an embarrassment to the economic community not one boasting such a stellar list of people who provided helpful comments and suggestions.
I have wasted far too much time dismantling this nonsense, and yet it is impossible to pass by the name “Ross McKitrick” in the acknowledgments. No serious climate scientist would ever have his name associated with their paper. McKitrick is a well-debunked global warming denier. He has said:
The present state of the climate reflects primarily natural causes, and if infrared-absorption plays a role it seems very minor. Continued use of fossil fuels following any reasonable trajectory, by adding CO2 to the air, may at most cause small and barely noticeable changes to the future climate. These changes will be impossible to detect in any location, but on balance they will probably be beneficial.
Well, at least that last sentence sounds vaguely economist-like: Robert Mendelsohn says global warming is “a good thing for Canada.” McKitrick’s work has been well debunked. Here is just the debunking on Realclimate:
There is no excuse for McKitrick being associated with this paper in any respect, although it does have the benefit of unintentionally discrediting it.
But really, there is no excuse for this paper. Shame on the authors. Shame on those whose name appear in acknowledgments. Shame on the whole profession for putting up with such nonsense.