Earlier, I reported on the searing critique of the media’s coverage of global warming, especially climate economics, by a leading journalist (see How the press bungles its coverage of climate economics — “The media’s decision to play the stenographer role helped opponents of climate action stifle progress”).
Now the award-winning Eric Pooley, former national editor of Time, has a must-read piece in Slate, “Surprise–Economists Agree! A consensus is emerging about the costs of containing climate change. So why is no one writing that?” Pooley notes that among climate economists “there is a broad consensus that the cost of climate inaction would greatly exceed the cost of climate action–it’s cheaper to act than not to act.” There is also a consenus that preserving a livable climate is not a budget buster.
If I have one critique of the Pooley piece is that he doesn’t note that the IPCC, which reviews the whole literature in its definitive 2007 Fourth Assessment report (see here), concludes:
In 2050, global average macro-economic costs for mitigation towards stabilisation between 710 and 445ppm CO2-eq are between a 1% gain and 5.5% decrease of global GDP. This corresponds to slowing average annual global GDP growth by less than 0.12 percentage points.
But how is that possible? How can the world’s leading governments, scientifists, and economic experts agree that we can avoid catastrophe for such a small cost?
Because that’s what the scientific and economic literature — and real-world experience — says:
Both bottom-up and top-down studies indicate that there is high agreement and much evidence of substantial economic potential for the mitigation of global GHG emissions over the coming decades that could offset the projected growth of global emissions or reduce emissions below current levels.
In fact, the bottom up studies — the ones that look technology by technology, which I believe are more credible — have even better news:
Bottom-up studies suggest that mitigation opportunities with net negative costs have the potential to reduce emissions by around 6 GtCO2-eq/yr in 2030.
Wow! A 20% reduction in global emissions might be possible in a quarter century with net economic benefits!! Take that, delayers who oppose rapid, mandatory action and supposedly represent the “pragmatic center on climate and energy” — but who in fact represent the fatal siren song of “wait for new technology, wait for new technology.”
This consensus that even a very strong cap and trade bill “would have a marginal effect on economic growth,” is very broad — it is shared by the International Energy Agency and McKinsey (see “McKinsey 2008 Research in Review: Stabilizing at 450 ppm has a net cost near zero“).
Pooley’s key point is that you’d never know about this strong consensus from reading the major media, as he details in his report for Harvard’s prestigious Joan Shorenstein Center on the Press, Politics and Public Policy, How Much Would You Pay to Save the Planet? The American Press and the Economics of Climate Change.
I will reprint his entire Slate piece because over the next 12 to 18 months (and for years to come), the economic debate will be front and center in discussions of climate policy:
Ask a random sample of journalists whether our top scientists agree on the basics of climate science, and they’ll surely say yes: Greenhouse gasses are warming the Earth, man is the cause, and we have to reduce emissions, or else. But ask the same journalists whether our top economists agree on the basics of climate economics–the costs and benefits of addressing the problem–and they’ll almost certainly say no: There’s no comparable consensus among economists.
But that simply isn’t true, and it’s time for the press and public to recognize it. There is an emerging economic consensus about the cost of climate action, but most journalists have failed to notice it, so the public doesn’t know it exists. That’s a problem, since the opponents of climate action use the cost issue–and doomsday analyses based on skewed assumptions –to block cap-and-trade legislation. Gullible press reports  treat these junk forecasts as if they are credible and give them equal weight alongside respected academic and governmental studies . I spent the fall at Harvard’s Kennedy School of Government studying how this “he said, she said” reporting style muddies the waters of the climate debate, and I recently published a discussion paper  about it. Since the paper came out, I’ve been hearing from economists–some of whom argue that they, too, deserve a share of the blame for this sorry state of affairs. Before we look at what reporters and economists are doing wrong, let’s summarize the economic consensus.
If you look closely at what climate economists are saying, you can discern two areas of basic agreement. First, there is a broad consensus that the cost of climate inaction would greatly exceed the cost of climate action–it’s cheaper to act than not to act. Reducing greenhouse gas emissions by moving to alternative energy sources and capturing carbon from coal-fired power plants will cost less in the long run than dealing with the effect of rising sea levels, drought, famine, wildfire, pestilence, and millions of climate refugees. (There are some outliers who disagree with this–Danish statistician Bjorn Lomborg  comes to mind–and some respected economists, like William Nordhaus , who argue that future, richer generations will be able to more easily shoulder the cost burden than we can.) But influential mainstream economists from Paul Volcker  to Robert Stavins  to Lord Nicholas Stern  to Larry Summers  all agree that action is cheaper than inaction, even if they disagree on much else (Stavins can’t stand Stern’s methodology; Summers prefers a carbon tax to cap-and-trade). Stavins, director of Harvard’s Environmental Economics Program, phrased it this way in a recent paper : “There is general consensus among economists and policy analysts that a market-based policy instrument targeting CO2 emissions … should be a central element of any domestic climate policy.”
The second area of consensus concerns the short-term cost of climate action–the question of how expensive it will be to preserve a climate that is hospitable to humans. The Environmental Defense Fund pointed to this consensus last year when it published a study  of five nonpartisan academic and governmental economic forecasts and concluded that “the median projected impact of climate policy on U.S. GDP is less than one-half of one percent for the period 2010-2030, and under three-quarters of one percent through the middle of the century.” (That’s a lot of money–U.S. GDP in 2007 was $13.8 trillion–but Stavins has estimated the cumulative cost of all U.S. environmental regulation to date at 1 percent of GDP, and it has not been an insupportable burden.) Stavins’ climate-cost calculations come in a bit higher than those in the EDF study, ranging from less than 0.5 percent to 1 percent of U.S. GDP; he describes these as “signiï¬cant but affordable impacts” that are “consistent with ï¬ndings from other studies.” The Stern Review on the Economics of Climate Change, an influential but controversial 2006 report for the British government, concluded that climate action would cost 1 percent of global GDP (though Stern now warns that our failure to act is raising the price tag) and that inaction could reduce global GDP by up to 20 percent.
You can’t take any of these forecasts to the bank–economic models are notoriously bad at predicting the future–but by aggregating them, as EDF did, you can get a general idea of the impact of climate action. It won’t be free. And it won’t be anywhere near as bad as the economic contraction we’re living through right now, in which U.S. GDP fell by 3.8 percent in the fourth quarter of 2008 alone. (If a cap-and-trade program were enacted by Congress this year or next, by the way, it wouldn’t start phasing in until 2012, by which time either the economy will be on the mend or a second Great Depression will have reduced our emissions the hard way.)
If economists are agreeing on so much, why aren’t more journalists reporting the good news? That’s what I tried to figure out in my Kennedy School paper, and I concluded that the press is botching the assignment. Partly, reporters have missed it because they can’t tell the difference between good and bad economic forecasts. Lame “he said, she said” reporting gives hired-gun naysayers equal weight alongside the academics, and that’s a big problem. (Telling them apart isn’t as hard as it may sound: If a forecast assumes that the transition to a clean-energy economy has already peaked, for instance, don’t trust it.) But there are others. EDF presented the emerging consensus in its paper but didn’t explicitly label it as an emerging consensus–there was no dumbed-down headline selling the big takeaway. But even if EDF had led reporters by the nose, it might not have mattered; since it is an advocacy organization, many journalists tend to discount what it says, even as they treat industry groups that oppose climate action as authoritative sources.
Here’s another problem. Journalists have missed the economic consensus partly because economists are such a querulous bunch–they argue bitterly among themselves even when they agree. When I asked Stavins about the Stern Review, for example, he criticized Stern’s methodology and didn’t mention that he concurs with most of Stern’s broad conclusions.
That sort of quarrelling masks the underlying consensus and communicates a greater degree of discord and uncertainty than actually exists. “One of the strangest things about the Stern Review was that some of the most vociferous comments came from those who drew the most similar conclusions to us,” says economist Dimitri Zenghelis, a lead author of the Stern Review. “In fact, most economists are surprisingly consistent in arguing for early and coordinated action, including cap-and trade-mechanisms.” But because of the intramural vitriol, he says, “journalists and policymakers detect a fog of disagreement and contention and, so, justifiably hold back from setting the record straight.” Economists aren’t likely to change anytime soon. So journalists need to get better at looking past their arguments and seeing where they agree. The consensus is out there.
I actually think the issue is a tad more complicated than Pooley lays out. Yes, I think it is true that most leading climate economists understand that the cost of action is only a small fraction of our wealth. But many of them so grossly underestimate the cost of inaction that they grossly underestimate the effort — and hence the cost — that is both necessary and justified. That will be the subject of Parts 8 and 9.
- Voodoo economics reporting, Part 6: The NYT magazine doesn’t understand renewables, efficiency, energy prices or green jobs
- Is Larry Summers a voodoo economist on climate (Part 5) and does it matter?
- Voodoo Economists 4: The idiocy of crowds or, rather, the idiocy of (crowded) debates
- Voodoo Economists, Part 3.5: Richard Tol says wildly optimistic MIT/NBER study, beloved of deniers, is “way too pessimistic”
- Voodoo Economists, Part 3: MIT and NBER (and Tol and Nordhaus) — the right wing deniers love your work. Ask yourself “why?”
- Voodoo economists, Part 2: Robert Mendelsohn says global warming is “a good thing for Canada.”
- Economists are part of the problem, Part 1: Robert Stavins can’t walk and chew gum at the same time