Global Warming: Take Off My Sweater?

There is a new UN Intergovernmental Panel on Climate Change report. It contains nothing but bad news, of course. But I am busy with my real life; I have obligations to others; I have to feed myself and shower; I even go to the gym regularly. What to do? Just trust a hysterical sixteen-year-old? (Yes, I mean Greta.)

When someone or something claims that there is, has been, change in something I perceive might be important, I apply the following four quick tests. I do this to decide how much I must attention I should pay to the change news.

1 Source credibility

Not all sources are created equal. Some stink, some have a long record of being reliable. The Wall Street Journal is one of the latter. Almost all anonymous internet sources are not even sources. The National Enquirer will publish anything (although it has had a few remarkable scoops). Normal sixteen-year old girls are only credible when they pronounce on show biz stars or on something related to a skill they have personally acquired, such as piano or gymnastics.

2 Main text: description of process

I scrutinize the description at the heart of the announcement of change though only for a short time. Does the process described make sense? Is it derived in an intelligible way from a study, or studies, that conform to conventional scientific, or other scholarly standards? If no claim is made that they do, they don’t, ever. If there is such a claim, there can still be abuse but there will shortly be a denunciation, in most cases, at least.

3 Narrative around description

Most change descriptions not directly in a scholarly journal come wrapped up inside a narrative. The narrative is often more interesting than the findings to which they are supposed to be linked. That’s intentional but dangerous. Suppose your doctor carefully measures your heartbeat and records his observations. Suppose that then, he gives you a very good lecture on the faults of Social Security. However valid the latter is, it should gain no authority whatsoever from the impeccable measurement of you heartbeat. This is a crude example but people do this sort of things all the time. Do you think climate activist do?

I ask myself how tightly connected the narrative is to the straightforward description of the relevant change? Often the answer is: barely, sometimes: not at all.

4 Gauging critically the order of magnitude of change

Suppose I tell you that I have lost weight. (I could use that.) Courtesy requires that you congratulate me but rationality demands that you ask: How much? If my response is one ounce, you will tend to dismiss my announcement and you will be right. One ounce out of 220 lbs is like nothing. (That’s aside from the fact that it might actually be nothing, a measurement error.)

The mysterious issue of “statistical significance” (that I will resist going into here though I am tempted) is only indirectly related to this matter. A difference between before and after, for example, may be statistically significant but yet, completely unimportant.

The short Wall Street Journal piece (1) covering the publication of the report is rich in narrative and short on figures. (That’s usually the case with climate change announcements, I think.) On rare figure drew my attention:

In the past 140 years -covering most but not quite all of the Industrial Age – global surface temperatures have risen by one (unit) degree Celsius.

To give you a practical idea, that’s not enough of a rise to cause me to take off my cotton sweater, or even to unbutton the top of my shirt. If the temperature rose by only one C between 8 am and noon, I would think something was wrong with the weather! I can easily believe that at this rate, in another 1400 years, it will be ten degree centigrade (Celsius) warmer and, we will still be here. That’s unless something else, something much more likely, like an epidemic. wipes us out. (2) and (3).

As this example illustrates, it may often be wise too reverse the critical sequence described above. Why bother to assess the source credibility associated with an announced change, or the conformity of the description change process to good scientific practice, or check out the attachment of the surrounding narratives to the process in the description, why do all this if the measured change is too small to merit attention?

My more complete ruminations on climate change skepticism are in Liberty Unbound: “Climate Change Denier.”

Endnotes

1   “U.N. Panel Sees Threat to Ocean” – by Robert Lee Hotz, Wall Street Journal 9/26/19, P. A8.

2     I am well aware that this is a sort of arithmetic average. Surface temperature may have gone up more in some areas and less in others. They may have declined in some places. If the subject is dealt with, it will be in: Watts Up with That.

3      The WSJ accounts implies that the UN report is oddly concerned with fisheries. This is odd because fishermen have known forever that there are warm and cool patches at the same latitude in the oceans. They also know that those shift positions and that the positions of such warm and cool patches affect the movements of fish.

A Small Reason Why I Don’t Want Big Government

Santa Cruz, California is really Silicon Valley Beach. It’s the closest; the next one is quite far. That’s in addition to drawing visitors from deep into the Central Valley of California, and a surprising number of European visitors.

One attractive beach close to its municipal wharf has only two (2) toilets. On Labor Day weekend Sunday, one of the two toilets was out of order. I estimate there were between 500 and a thousand people on that particular beach.

The day before, Labor Day weekend Saturday, the same toilet was already out of order. It was still out of order on Monday, Labor Day itself.

It was only a few months ago that the City of Santa Cruz joined a class action suit by a number of government entities against major oil companies for causing climate change. The first judge to look at the suit send the plaintiffs packing, of course.

So, this city of 60,000 wants to stop global warming but it does not have the ability to place two working toilets at the disposal of hundred of visitors who leave thousands of dollars in its coffers. The city cannot afford to hire a competent plumber on an emergency basis to fix the problem immediately. It does not have the timeX2 that would be required. Make it timeX3 on the outside. The total would come to $500 tops. Make it $1,000. It does not change anything.

The same happened last year or the year before. Surprise!

This is pathetic. We are governed by morons. Their gross incompetence is not natural, I am guessing. It’s learned stupidity. Our fault. We vote them in – with big help from UC Santa Cruz undergraduates who don’t care one way or the other, just want to feel good by electing “progressives.”

No one told our City Manager that Labor Day weekend, and its crowds, were coming. How was he supposed to know?

Nightcap

  1. Why fascism is the wave of the future (1994) Edward Luttwak, London Review of Books
  2. The rise of the rise of the global Right (2019) Paul Urie, Counterpunch
  3. A climate change denier, Part 2 (2019) Jacques Delacroix, Liberty Unbound
  4. Sen or sense? (1999) Barun Mitra, the Freeman

FURTHER CRACKS IN THE GLOBAL WARMING PROPHECY

Although global warming zealots continue their religious crusade, more research reveals skepticism toward the doomsday prophecies. Recently Finnish scientists published research that further debunks claims about the role of humans in generating global warming. Their thesis is that global temperatures are controlled primarily by cloud cover, which is a natural occurance that is beyond human control:

https://www.ecology.news/2019-07-12-climate-change-hoax-collapses-new-science-cloud-cover.html

The opponents immediately denounced this as a junk science:

It is OK and normal to have debates within scientific community. We, regular lay tax paying people are understandably not shrewd in all intricacies of scientific debates around so-called climate change. Yet, I am sure many of us want to make sure that no financially ruinous global or nationwide social engineering scheme would be enforced on all of us by social activists who decided to side with a group of aggressive academic zealots claiming scientific consensus and squashing dissenting views.

In his Counterrevolution of Science (1955), F. A. Hayek wrote about the dangerous hubris of “science worshippers” who wanted to extend their theories, which at best had narrow application and limited experimental database, to reshape the life of entire humankind. The first aggressive spearheads of this hubris were “generation X” socialists, acolytes of Henri St. Simone, who congregated in and around Paris Ecole Politechnique from the 1810s to 1860s. They dreamed about New Christianity – a creed based on the religion of science. With its “Council of Newton,” it was to regulate entire life of society. In the past century, we already lived through projects designated to reshape the life of humanity through “scientific” societal laws peddled by Marxism. We also lived through national socialist attempts to breed the better race of human beings based on “scientific” laws. More recently, in the 1970s, driven by the same scientific hubris backed by moral considerations, we resorted to global ban of “evil” DDT.  This led to the outbursts of yellow fever and mass deaths in the Third World.

During a brief period of soul searching and self-scrutinizing among the left in the wake of communism collapse in the 1990s, in his Seeing Like a State (1998), James Scott, a leftist academic, gave a severe critique of that hubris that he called high modernism arrogance. Not naming socialism directly and sparing the ideological feelings of his fellow comrades, who have been dominating humanities and social sciences, he subtitled his book as follows How Certain Schemes to Improve the Human Condition Have Failed. Still, it was a devastating accusation of the “science”-based social engineering, from German attempts to breed perfect healthy forests in the 18th century to the “scientific socialism” of the Soviets  who methodically ruined Russian agriculture by their aggreesive collectivization. The current left are not as modest as Scott’s generation. They quickly moved on, sweeping their own history under the rug. Being emboldened by the crisis of 2008 (a new “sign” of capitalism end of times), the left are now ecstatic about the Green New Deal and its Stalinist global warming regulations that are peddled by the big-eyed “democratic” socialist of “color” from Congress. It seems we are invited again to step on the same rake in order to smash our forehead once again by adopting another scientific Utopia.

Nightcap

  1. Working in President Trump’s Council of Economic Advisers Casey Mulligan, Supply and Demand (in that order)
  2. How not to use percentages in a news story Joakim Book, Power & Market
  3. Climate change denialism Jacques Delacroix, Liberty Unbound
  4. The Mahabharata in South Asia, Europe, and East Asia Michael Kinadeter, JHIBlog

Nightcap

  1. Paul Gauguin in San Francisco Bradley Anderson, Claremont Review of Books
  2. Did European colonisation precipitate the Little Ice Age? Dagomar Degroot, Aeon
  3. What if climate warriors put their money where their mouths are? Joakim Book, Mises Wire
  4. It all started with my balls.” Colm Tóibín, London Review of Books

Further thoughts on the carbon tax.

This post is in response to feedback from my previous post on this topic.


There are no panaceas.

But as abstract ideas go, pollution taxes are pretty appealing. Holding constant lots of things that we can’t really hold constant, it means replacing the inefficiency resulting from poorly defined/enforced property rights with a world where prices more accurately reflect the costs of one’s decisions.

Let me come back to the things we’re “holding” constant in a bit. Why do I want to throw my weight behind shifting public perceptions in favor of pollution taxes?

I think they’re underrated by the median voter. Climate change is just a subsidy paid in the form of worse conditions. But most people (including people who should know better) don’t have a good understanding of the problems caused by subsidies.

Which is not to say a carbon tax isn’t overrated by the median policy wonk. There are a ton of important caveats, but on balance, as a policy for use in the next 50 years, I think they’re a useful tool to enhance efficiency or replace worse tools.

Again, there are no panaceas. I’m also not a huge fan of the “Economists’ Statement on Carbon Dividends” as written (for reasons I’ve hopefully mostly addressed). I suspect the best case scenario for my preferred carbon tax policy would be a modest improvement. I think the bulk of the gain would be a cultural shift away from “let’s regulate our problems!” to “let’s leverage incentives to address our problems!” Not Earth shattering, but a step in the right direction.

So let me state my position, then we can dig into criticisms and caveats.

Let’s make marginal shifts away from taxing investment and towards taxing negative externalities. As we go, let’s spend a lot of effort trying to study the impacts and adjust accordingly. Let’s heavily agument that with abatement policies rather than trying to return to some pre-industrial climate target.

Okay, let’s dig into criticisms and caveats.

  1. Public choice considerations
  2. Geoengineering and other alternatives
  3. Cost
  4. Coordination
  5. Uncertainty

1-Public choice considerations

A Green New Deal will be a rent-seeking bonanza. Pollution taxes will face the same sorts of problems that plague the tax code in general. There will be intentional loop-holes and accidental screw ups.

We have to continue to push for reducing the complexity of tax codes in general. But I can’t deny that a carbon tax would be a step back on this margin.

Minus a hundred points for my position.

2-What about geoengineering?

Geoengineering sounds like a possible panacea. Maybe it is. But I’m not willing to flip a switch and find out the hard way all at once.

First off, geoengineering is scary. The climate is a complex system and complex systems are difficult-impossible to manage well. And that’s especially concerning if it means that anyone with a few million bucks can try to fiddle with Earth’s thermostat.

But it seems like a plausible tool that might be used to address climate change. Similar to my take on a carbon tax, I think the way to go is baby-steps plus research.

What about subsidizing “green _____”

Personally, I’m skeptical. Solar sounds appealing, and I (personally) think windmills are beautiful. But I don’t think the government will do a good job of picking winners and losers. Pollution taxes are appealing to me because they don’t require bureaucrats to choose. Again, I think the way to go is to use pollution taxes to offset other taxes–while continuing to advocate for reduced size/scope of government and a return to federalism.

Plus five points for my position.

3-Cost

We should also remember that GDP is an imperfect measure of well being. The current figures aren’t directly comparable to the figures we’d get in a post-carbon-tax world. A one-time fall in GDP doesn’t (necessarily) mean we’ve screwed things up.

A tax big enough to halt climate change would be incredibly costly. Too big a tax yields a negative net benefit.

Still, it’s worth remembering that a) we can go too far with a carbon tax, and b) we don’t have access to a silver-bullet solution. So let’s start small and gradually increase carbon taxes till we get close to (our best estimate of) the optimal level.

Plus epsilon points for my position.

4-Coordination

The basic idea of a carbon tax is that we’re dealing with a global-scale externality problem. But small scale taxes are unlikely to do much beyond shifting where pollution happens. A fully effective tax would require multi-lateral coordination. And, as a country, we aren’t very good at that.

Trying to create a tax on imported carbon-intensive goods that didn’t face a tax at home seems a) sensible at first blush, and b) a massive opportunity for public choice problems.

On the other hand, we could justify a tax commensurate with the local impacts (something like 10% of the global impact). This fits nicely with my idea of starting small and adjusting at the margin.

But even within the U.S. there are coordination issues. Long Island will likely face net costs from climate change, but other areas will benefit from a longer growing season.

Plus 10 points for my position, but also minus 10 points.

5-Uncertainty

Uncertainty cuts both ways: we’re currently accidentally manipulating the climate and that could turn out to be catastrophic. Trying to intentionally manipulate it in the other direction is also dangerous. Again, the appropriate focus is on marginal tinkering [much as it clashes with my non-interventionist priors] rather than ambitious global engineering [which grabs my priors by the lapels and knees them in the groin].

When I teach externalities, I draw a graph like this:

Negative externalities when we magically know their magnitude.

In this market, we end up with an equilibrium quantity defined by the point where Marginal Private Cost equals Marginal Social Benefit (MPC = MSB). But the Marginal Social Cost (MSC) is greater, so we get a deadweight loss equal to the triangle I’ve shaded in red and purple.

It’s important to note: we don’t actually know where the MSC curve is. It’s somewhere above MPC, but we’re basically in the position of trying to eliminate a subsidy we don’t know the size of.

The relevant models–climate models and economic models–are filled with uncertainty that we simply cannot resolve without real life experience.

What does the economic way of thinking tell us? Act on the margin. Setting a tax that pushes supply (MPC) up to the green line doesn’t fully address the problem (as I’ve assumed it to be in this graph), but it’s an improvement.

Even better, it’s an improvement where the biggest returns are experienced up front. This modest tax fails to get rid of the red deadweight loss (DWL) area, but it eliminated 3/4 of the total DWL.

Plus X points for my position where X is a random variable with an unknown distribution, positive first derivative, and negative second derivative.

tl;dr:

At my friend’s behest I’ve been looking at Bob Murphy’s critique of carbon taxes. I find it’s shifted the magnitude of my prior opinion, but not the direction. I still think carbon/pollution taxes are a good idea, but I no longer think they’re a great idea. My take away from Murphy’s work is that the optimal carbon tax is fairly modest. My response is to advocate for getting a very modest carbon tax on the books, then gradually shift tax policy in that direction.

For climate change (and any other problem) we ought to be pluralists. A mix of approaches is ideal. Part of the appeal of Pigouvian taxes is that they allow and encourage a wide range of responses. The best pollution abatement scheme isn’t something we can look up in a binder. We have to discover it, and crowdsourcing is the appropriate way to do that.

But carbon taxes are only one part. We should also advocate for changes that will ameliorate harm. I am more bullish on these policies than I am on a carbon tax:

  • Make it easier for the world’s poorest people to move to rich countries that will be better able to cope with climate change.
  • Quit subsidizing flood insurance.
  • Quit subsidizing polluting industries (and other industries).

Even though geoengineering scares me, we should try to learn more. Ditto for any other possible tools that come along.