It's a buyers market on that ice cap

No matter what you believe about global warming science (or should I refer to it as climate change? The movement’s name mysteriously changed mid-stream.), or a government’s right or capability to intervene in a marketplace, I’m about to tell you why non-ideological economists get so frustrated with global warming zealots (brace yourself): frankly, there are more pressing issues facing the world. I know, in the wake of NBC’s “Green Week” and Prius’ taking over the streets, it’s hard to believe. This isn’t to say that environmental preservation is not on the short list of world concerns. It is. And this isn’t to say that environmentalism is not a worthy cause. Again, it is. Unfortunately, some of the brightest minds in the world, who look at things from a perspective of costs and benefits, do not see the need for public tax dollars to be funneled vigorously into combating climate change. Just ask the Copenhagen Consensus.

But first, why change the global warming moniker? Could it be that average global temperatures (combined land and sea surface) have leveled off this decade? According to the World Meteorological Organization (WMO), yes, they have:

Now, I realize that most of the warming taking place in the world is happening in the Arctic, and the polar ice caps melting is not a great thing for polar bears. I’m a fan of the polar bears’ entire catalogue, I am. I’m also aware that the decade of the oughts (2000-09) has been warmer than the nineties (1990-99), which was warmer than the eighties (1980-89). Understand, though, that the 2000’s has only been warmer due to the relatively large increase throughout the nineties. As the WMO graphic shows, average temperatures have been pretty level this decade. I say “relatively large” temperature increase in the nineties because we are talking about two tenths of a Celsius degree.

Noteworthy in 2009 is that climate extremes, including devastating floods, severe droughts, snowstorms, heat waves and cold waves, were recorded in many parts of the world. The extreme warm events were more frequent and intense in southern South America, Australia and southern Asia. In addition, central Africa will probably have their warmest year on record. (1) (2)

The current decade will end up as the warmest globally, with records dating back to 1850. (1)

Having said all of that, the fact is: nobody can prove why global temperatures have increased over the past few decades. Is it completely the fault of man and his greenhouse gas emissions, partly the fault of man, completely due to natural warming cycles of the earth, partly due to natural warming cycles of the earth, or some combination of the two? Maybe it’s something really mind-boggling that nobody has seriously studied due to the issue becoming so politicized and fanatical? When emotional zealotry ensues, cooler, more rational heads rarely prevail. Steven Levitt and Stephen Dubner, authors of Superfreakonomics, have mentioned studies suggesting that man’s effort to be good stewards of the environment have actually caused the increase in global temperature. Namely, awareness of heavy particulate pollution like sulfur dioxide and acid rain in the 1970s and 80s (a gas that can literally kill people when breathed in) and the subsequent clean-up, should be great for the environment, right? Well, it has been great for air quality, but the layer of particulate in the air was shielding us from the sun i.e. remove the shield, sun rays make it into our atmosphere and temperatures increase; global warming caused by environmentalism, not a theory that is widely discussed. Climate scientists John Christy and Gavin Schmidt sum up the typical debate:

On to Copenhagen. The Copenhagen Consensus 2008 was a summit meeting looking to prioritize global opportunities. Eight economists sat on the panel, with an array of ancillary support. Of course all of these economists are decorated with accomplishments and command respect within their field. I will spare you the fanfare that usually accompanies the introduction of these individuals; just because they’re adept and celebrated does not make them right on a given issue. These economists were charged with the task of setting priorities among proposals for confronting ten major global challenges. (4)

The summit tackled the following issues: air pollution, conflicts, diseases, education, global warming, malnutrition and hunger, sanitation and water, subsidies and trade barriers, terrorism, women and development. (4)

Assuming that conflicts denote war, I’d say this pretty well covers global ails.

The economists on the Copenhagen Consensus 2008 panel were:

• Jagdish Bhagwati, Columbia University;
• François Bourguignon, Paris School of Economics and former World Bank chief economist;
• Finn E. Kydland, University of California, Santa Barbara (Nobel laureate);
• Robert Mundell, Columbia University in New York (Nobel laureate);
• Douglass C North, Washington University in St. Louis (Nobel laureate);
• Thomas Schelling, University of Maryland (Nobel laureate);
• Vernon L Smith, Chapman University (Nobel laureate);
• Nancy Stokey, University of Chicago.

The economists were asked the following question: “What would be the best ways of advancing global welfare, and particularly the welfare of developing countries, illustrated by supposing that an additional $75 billion of resources were at their disposal over a four-year initial period?” (4)

The panel ran detailed cost-benefit analyses on each world problem. Based on the costs and benefits of the solution, each problem was ranked in order of desirability (net welfare gained from taking on the issue). The Copenhagen Consensus described the process like this:

“Ten challenge papers, commissioned from acknowledged authorities in each area of policy, set out more than 30 proposals for the panel’s consideration. Each paper was discussed at length with its principal author and with two other specialists who had been commissioned to write critical appraisals, and then the experts met in private session.” (4)

The Copenhagen Consensus 2008 ranked the proposals as follows:

As you can see, global warming doesn’t come in until proposal number fourteen. If I put on my analyst cap, this means that thirteen other issues would produce greater benefits to more people if money was allocated to it. Yet the United States is proposing a Cap and Trade bill to curb carbon emissions during a down, vulnerable economy. The carbon credits, or carbon indulgences as coined on this website, will hurt business during a time when the unemployment rate is in the double digits. (3)

This is what drives rational, reasonable people crazy about Cap and Trade and the climate change debate. If public tax dollars are to be spent to create the most good for the most people, why in the hell are we obsessed with number fourteen, a phenomenon where there is no scientific consensus on the cause? Maybe it’s because the United States doesn’t have such grave concerns in areas like malnutrition, as developing countries do. But maybe, the U.S. is locked into number fourteen because a few individuals and groups want to get theirs. Green is the color of money.

For example, what if the U.S. government allocated dollars to improve the average healthiness of the American lifestyle? It could be a part of the health care plan and would be of great help to the budget deficit. Imagine if brand new public gyms were constructed across the country, and to gain access you had to be below a certain income threshhold; a food stamps program for exercise. Government feeds you and then provides you access to exercise equipment to burn it off. Yes, it’s meddling with the private marketplace, and the new state-of-the-art gyms (go big or go home) would surely put other gyms out of business, but if there were enough of them, the benefits might outweigh the costs in increased life expectancy and health care expenditures.

The point is: Americans get stuck in a little box, particularly when politics, emotions and usual convention is concerned.

As plug-in electric vehicles become mass distributed (so far we’ve pretty much only seen hybrids like the Prius, with no plug-in component), watch the U.S. government hand out tax credits as they have to buy hybrids. Plug-in electric vehicles will still rely on the electricity grid. Fossil fuels (mainly coal and natural gas) provide 70% of U.S. electricity generation. (5) Perhaps these vehicles will be an interim improvement for energy diversification, and help ween the U.S. off of foreign oil. But are they worth doling out tax credits for? Only a cost-benefit analysis would give us a shot at knowing.

Which brings me to my final stance. I’m all for environmental activism that brings awareness to the individual about their consumption. People should know when they’re wasting energy and materials needlessly, when they’re throwing something away that could be recycled, or using fossil fuels which make us reliant on a foreign oil cartel commonly known as OPEC. But come at me with environmental fanaticism, running on paltry facts and hot emotions, well, no thanks.

If the government wants to insert itself into private marketplaces with bills like Cap and Trade, they better have damn good reason to do so. It is reasonable for the government to want to improve the lives of everyday Americans, if it’s with genuinely good intent. I only ask that they approach it from a cost-benefit angle. If you’re going to be obsessed with number fourteen, tell me why one through thirteen (and other U.S.-focused issues unlisted here) are not more pressing areas in need of public money. Have the president, or Cabinet Secretary, present a cost-benefit report in a press conference, and then publish the report immediately after, complete with citations. They will never do this for two reasons:

1) It would require impeccable detail and logic which would undercut political savvy, or the ability to use blanket statements, charm and appeal to emotions in order to achieve a political end.

2) It would go a long way in stopping the game in Washington, where friends scratch each other’s back. Things would pretty much only happen if they made sense, more people would be more educated, and more power would return to the voters.

As far as climate change and environmentalism is concerned, awareness will help people lower their consumption and seek out eco-friendly alternatives in their lives. That is the first step. But technology is what will get us out of polluting the Earth on a mass scale. NOTHING else will. Not Cap and Trade, not Corporate Average Fuel Economy (CAFE) standards, not tax credits, and certainly not Al Gore, unless he is paying a team of expert scientists to sit in a lab and work on renewable energy sources. (In Al’s defense, he has been great for awareness, but on the other hand, awful for fanaticism.) This is never more true when you remember that the entire globe needs to be on board with going green in order for any significant progress to be made. China, for example, will continue to do whatever they want in the pollution arena, and I have a feeling they’re not too concerned with number fourteen. Our best hope is not that China has an epiphany and institutes a Cap and Trade system, or CAFE standards for their millions of consumers ready to purchase their first automobile. It is that somebody comes up with a solar powered, plug-in hybrid flex fuel vehicle with a mega battery which also runs on garbage and nuclear fusion, and it is mass marketed to the world at an affordable price.

Isn’t technology cool?

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(1) Global Warming News, Science, Myths, Articles – AccuWeather.com, retrieved December 16th, 2009, http://global-warming.accuweather.com/

(2) World Meteorological Organization, Press Release No.869 – WMO. int/pages/index_en.html, retrieved December 16th, 2009, http://www.wmo.int/pages/mediacentre/press_releases/pr_869_en.html

(3) Bureau of Labor Statistics – BLS.gov, retrieved December 16th, 2009, http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000

(4) Copenhagen Consensus 2008 – CopenhagenConsensus.com, retrieved December 16th, 2009, http://www.copenhagenconsensus.com/Home.aspx

(5) UC Davis, Institute of Transportation Studies – UCDavis.edu, retrieved December 16th, 2009, http://pubs.its.ucdavis.edu/publication_detail.php?id=1290