Mark Thoma has an excerpt of Partha
Dasgupta’s review of Bjorn Lomborg’s new book today. It took me a while
to get Dasgupta’s point, so let me try and rephrase it in a slightly simpler
manner, since it was pretty opaque to me on a first reading.
Lomborg’s argument is the easy bit. Look at all the money that Plan A –
implementing Kyoto – would cost, and look at what benefits we would get
in return for that cost. Now, look at Lomborg’s Plan B. It costs a fraction
of the cost of implementing Kyoto, and the benefits are much higher. So if we
want to maximize the planet’s welfare, we should do things like build infrastructure
to protect against floods and hurricanes, while keeping the amount of carbon
in the atmosphere to a maximum of 560 parts per million. The cost is lower,
and the benefits are higher.
Hang on a second, says Dasgupta. The problem with Lomborg’s argument is that
he thinks he knows what the costs and benefits of a world with atmospheric carbon
concentrations of 560 parts per million are. But he doesn’t: nobody does. You
can’t just extrapolate from what we’re seeing at current concentrations of 380
parts per million, because the climate is a non-linear system:
The transition to Lomborg’s recommended concentration of 560 p.p.m. would
involve crossing an unknown number of tipping points (or separatrices) in
the global climate system. We have no data on the consequences if Earth were
to cross those tipping points.
So run Lomborg’s numbers again. Only instead of using Lomborg’s best guess
as to the costs and benefits of his Plan B, use a more reasonable range of probabilities.
You can even say that Lomborg’s best guess is the most likely outcome –
but you also have to assign some kind of probability to much worse outcomes.
If you do that, then Lomborg’s numbers cease to be nearly as compelling. Even
a small probability of a catastrophic outcome during the move from here to 560
parts per million sends the costs associated with Lomborg’s Plan B skyrocketing.
On the other hand, the costs associated with Plan A – call it Kyoto, or
anything else which stabilises atmospheric carbon at much lower levels than
560 parts per million – don’t rise nearly a much. The known, up-front
costs in terms of dollar expenditures are higher, to be sure. But the unknown,
contingent costs of irreversible future catastrophes? Those are lower.
There are two visions of the world at war with each other here. In the first
vision, the planet is on its way to environmental catastrophe, and we should
do anything and everything we can in an attempt to insure against that catastrophe
from occurring. In the second vision, climate change is a relatively gradual,
non-catastrophic phenomenon, which has consequences (floods, hurricanes and
the like) which we can protect ourselves against with infrastructure investment.
In the second vision, Lomborg is right: it’s a lot cheaper to build a hurricane-proof
house than it is to change the composition of the atmosphere in an attempt to
prevent that hurricane from occurring in the first place. But in the first vision,
Lomborg is wrong: all the hurricane-proof houses in the world will do precious
little good if the population of the planet is decimated by freak weather patterns,
food shortages, and a rapidly-increasing proportion of the Earth’s landmass
becoming uninhabitable because it’s too hot or too wet or otherwise impossible
to live on.
To put it another way, Lomborg’s choice between Plan A and Plan B is a false
one. He makes it sound like the costs of Plan B are low, while the benefits
are the same. But that’s a bit like saying that homeownership is always profitable
over the long run: in order to make such a statement you have to ignore the
possibility of catastrophe (or foreclosure). When you consider all
the possible downsides, and not just the most likely ones, it makes sense to
plump for Plan A instead.