In another place you wrote:

I am all for internalizing negative environmental externalities. So are most economists. But their work on this area suggests that the negative externalities associated with greenhouse gas emissions are probably no more than $2 per metric ton - not enough to justify more than, say, a 2 cent increase in gasoline costs. For a review of the literature on that matter, see a recent academic survey by Richard Tol: [link]

At that link I found the summary:

One hundred and three estimates of the marginal damage costs of carbon dioxide emissions were gathered from 28 published studies and combined to form a probability density function. The uncertainty is strongly right-skewed. If all studies are combined, the mode is $2/tC, the median $14/tC, the mean $93/tC, and the 95 percentile $350/tC. Studies with a lower discount rate have higher estimates and much greater uncertainties.

After wiki-ing "mode" ... I had to wonder why you chose that as your answer, rather than the mean or median?

I'd think in any widely distributed cost estimate the mode will be too low.

And thanks for joining the discussion.

1. Scientists should absolutely get involved in debates about what to do about global warming.  They are on the leading edge of understanding what is happening; and there is quite a diversity of opinion about what may happen.  Scientists like James Hansen who publicly argue for certain policies are critical to moving toward global warming mitigation.  Further, since their understanding of what may happen is the best we have, in some ways they are in a better position to judge what to do about it than economists, who are generally trained in mathematics, not the sciences involved with climate change.  Which leads to

2. Engineers, particularly civil engineers, are in a much better position than economists to discuss what the costs and mitigation strategies of global warming may be, because they understand much better than economists the dynamics of how flooding and drought, etc. can affect infrastructure

3. Since there is a large diversity of opinion among scientists, I'll stick my neck out and say that IPCC estimates of what impact global warming will have are only one of many, and on the conservative side -- the recent models did not seriously consider melting ice, for instance.  Many other scientists are very worried about positive feedback effects, and see that the "progress" of global warming is much faster than any models.

4. Meadows et al. did not claim that we would soon run out of everything.  They clearly show that by the mid of the 21st century -- depending on one of their many models, but that point seems the most common among them -- many resources would peak.  They argue that they've been saying that the whole time, and that their models have been working quite well, but we didn't immediately run out of everything so everyone jumped up and down and said "see! see! they're wrong!".  As far as Ehrlich losing his bet, yes, that was a dumb bet, but that doesn't mean he's not wrong in the long-run -- and plenty of cornucopian claims have been proven wrong as well.  So I have a question for you: are you aware of any economic models that assume that there are limits to natural resources? which leads to

6. Is it the conventional wisdom at this point that 3% growth rates will continue through to 2100?  Does anyone even try to justify that?  This is more of a information question, because it means that some serious work needs to be done to at least show that there is a high probability that we will have some serious resource problems in the future.

Thanks for your input.

Steven Earl Salmony
AWAREness Campaign on The Human Population, established 2001
http://sustainabilitysoutheast.org/

(Being a chemist though, I can take the snug position that there is only one, possibly, purer science out there.)

scientists are in no position to intelligently guide public policy on climate change. Scientists can lay out scenarios, but it is up to economists to weigh the costs and benefits and many of them say the costs of cutting emissions are higher than the benefits.

Let my address the nastiest of the herrings, though.

I think like polar bears, Easter Island provides a very powerful image, and so you will find those who start from defending a position rather than from thinking about our circumstance eager to deflect attention from the main issues at hand. So let me quote directly from the author of the referenced study about Easter Island (Rapa Nui):

"I got those results back and I was sceptical," says Hunt. "I thought, something's wrong with these." When repeated samples yielded the same date, he and Lipo re-examined the existing evidence. After throwing out any studies that lacked replicate samples or had other methodological problems, the 11 studies that remained all pointed to the same date - roughly 1200 AD.

Such a late arrival date means that the new inhabitants of Easter Island must have begun hacking down trees almost immediately, building the gigantic monuments and stone heads that make the island so distinctive, says Hunt.

And the new civilisation's ecological footprint must have been heavy from the start. "There isn't a period of ecological stability. There was almost immediate impact," says Hunt. "It isn't a two-part story any more. There's really just one chapter."

This may amount to an interesting controversy among archaeologists, but it hardly changes the moral of the story.

For now, I close with this. While I wish I could share in Taylor's optimism I take little solace in predictions of the number of dollars I can expect to spend in the future further-dimished world.


mt

It is the "students of 'human' nature only" (e.g., economists and demographers) that I am trying to distinguish by suggesting these investigators are not scientists.

Steve

Rather than wade in on this, let me try to make a few quick points:

1.  Here's why you see people from "the other side" here: you won the debate about the existence of the problem.  There are no reasonable "sides" on this question anymore.

2.  Economists can be pretty obnoxious in their jargon-laden talk that often serves to hide assumptions, rather than do what jargon is supposed to do, namely focus on critical issues.  (Interestingly, as per the previous very funny comment, this is never true - in anything I've read by them, which is a lot - of either Friedman or Hayek.)

3.  Economics is not science.

4.  It is very seductive, having been proven right about the fact of the threat to believe that all opposition to your views on what to do about this is ill-founded.

5.  Careful consideration of the costs vs. benefits of trying to address this problem is a worthwhile process.

6.  Apocalyptic rhetoric about AGW is not justified by science, and in the end, is likely to be counter-productive.

7.  If somebody can't explain their position on the costs and benefits of various proposals in clear English sentences that don't include terms like "partial equilibrium", they don't know what they're talking about.
   

• Grandfather units, clean them up using best available retrofit technology (BART)

• Permits for today would use reasonably available control technology that might exclude coal gasification and sequestering (RACT)

• Permits for the future might be required to use lowest achievable emission rate, regardless of cost (LAER)

The U.S. Congress needs to stop dinking with energy standards and revise the Clean Air Act to include CO2, CH4, and N20, and to require the EPA to implement those standards within two years.

Now.
-sammie

Onward through the fog

What I am trying to simply point out is the way economists and demographers, for example, do not appear to acknowledge "human" beings as creatures existing within the natural order of living things. Second, and as important, these investigators appear to view "human" beings as existing somehow, inexplicably and apparently preternaturally, outside the bounds of the practical requirements of the biophysical world to which non-human beings are known to be subject.

Thanks to both of you for a remarkable and, for me, uncommon discussion.

Sincerely,

Steve

I don't agree with everything he says, but I agree completely with six of his seven points.

I am not sure whether AGW is into apocalyptic territory, but I do think we have a carrying capacity problem of which AGW is an aspect. Accordingly, minimizing the risk of a (likely horribly destructive) population crash is the central issue of sane governance for the foreseeable future.

We do have to weigh costs and benefits, but not only do I doubt that economists are uniquely qualified to manage this discussion, I suspect they are uniquely disqualified! This strange circumstance results from the fact that the present problems violate the assumptions on which their intellectual edifice is built.


mt

But I do have problems with "economics-as-usual", when it steps beyond behavioural prescriptions and pretends that it is somehow effectively modelling the world.

I.e. The basic thrust of Jerry's original article, which is subtitled "World to Scientists: Zip It!", which then goes on to declare economists pre-eminence in determining the economic costs and benefits. And comments like this from Robert Solow "If it is very easy to substitute other factors for natural resources, then there is, in principle, no problem. The world can, in effect, get along without natural resources.", or Julian Simon "Similarly, the quantity of copper that will ever be available to us is not finite... given the problem of the economic definition of "copper," the possibility of creating copper or its economic equivalent from other materials, and thus the lack of boundaries to the sources from which copper might be drawn."

This is, of course, then extended to the entire classical economic theory which, a priori, does not account for physical throughputs, just capital, labour and technology. Innovation and substitutability are somehow able to abstract resources, ecosystem services and waste sinks right out of consideration (or, in the case of Mr. Simon, suggest that alchemy is now possible - we will "create" copper somehow!).

It is when economics is stepping away from behavioural prescriptions, and into such models about "how the real world works", that it simply is a failed description. (The very idea that we could "substitute" human capital for, say, the ozone layer, beggars belief.)

Economics does, typically after the fact or late in the game, try to retrofit its model so has to impose costs on externalities. But the model itself still does not attempt to explicitly incorporate resource use, etc., into the model.

Nonetheless, the evidence that it "should" be doing so is piling up - fishery collapses, ozone depletion, GHG build-up, etc. These ecological dilemmas seem to be a systemic output from the "economics-as-usual" model. After acid rain, mercury, etc., does anyone actually think that GHG's are going to be the "last" externality that we'll need to account for? Maybe we should check the descriptive elements of the model a bit, or see whether we are missing some parameters? Hmmm?

And who might have some insights for the economists on how our material transformations, etc., interact with the world around us? Scientists, perchance? If not scientists, who?

Back to Jim Manzi's points 5&7, about clear articulations of cost&benefits... well, yeah, I agree. Let's start, for instance with Jerry's rosy A1F1 scenario above.

If I am reading from the same literature I think he is, there is also a B1 scenario which would limit emissions so that the temperature increase in 2085 would be only 2.1C, instead of the 4.0C that A1F1 produces... The difference in "net GDP per capita for developed countries"? $69,500 for A1F1 as Jerry claims, and $65,737 for B1. This despite the fact that "gross" GDP grew by a factor of ~ 7.4x from 1990-2100 under A1F1, but "only" 5.0x for B1... but by 2100 under A1F1, almost 40% of gross GDP is now going to pay for climate change adaptation on an annual basis, thereby cutting the "net" GDP basically back to the B1 scenario...

Leaving aside the wisdom of "preferring" an economy where 40% of its productive efforts is directed toward taming climate, or the bizarre
"precision" of these forecasts, is it even reasonable to try to trade-off an extra 5% net benefit a century from now for a much less certain, riskier environmental outcome? Apparently so, because it says so just upthread!

And again, this gets me back to the point about an abstract model that does not account for physical throughput... Anyway, I gotta go... I am very much enjoying the exchanges the last few days.

Let's get a little more specific.  The current world per-capita GDP (purchasing power parity) is approximately $10,000 (see Wikipedia).

Who thinks the world per-capita GDP can reach the following values (year 2007 dollars):  $20,000?  $50,000?  $100,000?  $500,000?

Mark Bahner

An area in which scientists' input is vital, for example, is in establishing fishing quotas. In many areas of the world, fishery biologists have a formal, legal role in advising what should the maximum allowable catch that would enable particular fisheries to continue on a sustainable basis. The actual setting of the quotas is always left to elected or appointed policy-makers, however. Unfortunately, these people routinely ignore the scientists' recommendations and opt for larger harvests -- mainly for what they consider to be economic reasons (the incomes of fishermen). But don't blame the fisheries economists: they usually, to a person, substantiate the advice of the fisheries biologists.

In the world of climate change, the decisions are not so easy, because they are not taken on an annual, but rather a multiple-year basis, and the options are less straight-forward. Climate scientists can certainly point to how much emissions need to be reduced to obtain a given reduction in atmospheric concentrations of greenhouse gases as of a particular future year (give or take a considerable margin of error), but they are usually not particularly versed in the art of policy making -- which, yes, requires a keen understanding of human behaviour, since it is humans that will be responding to whatever incentives and disincentives are created. (Rather, what we often get is: "Ban this! Mandate and subsidize that!")

It is through politicians being fed very simplistic arguments, ignorring the advice of (independent) economists, that has gotten us into the situation where we are today: where the flagship climate-mitgation policy of the United States and several other countries is ... agro-fuels.

These are only my personal opinions.

It is time for the Swedes to give a prize in environmental economics. Not necessarily next year, or even the year after that. But things being what they are, such a prize is warranted as soon as possible, the better to govern debate on a most emotional topic.

Consciousness of burgeoning environmental problems grew rapidly in the late '60s. By 1970, James Tobin and William Nordhaus of Yale University were at work on the systematic accounting for natural resources dubbed "green accounting" ...

Under the circumstances, we need the clearest, deepest and most disinterested economic advice possible about the potential costs and benefits of global warming, and of the various policy responses that might retard the process...

Rapid reductions in greenhouse emissions right away? Or modest reductions at first, growing increasingly stringent over time?... But the Swedes should do the world a favor and award the economics prize to the environmental economists who have created the tools to talk meaningfully about taking precautionary action in uncertain circumstances, before the physical science can be nailed down.

Case in point: The critically endangered greater striped toowit (for arguments sake) has one habitat left which just so happens to be atop a rich mineral deposit. It is economically rational to exploit the mineral deposit effectively killing the the last of the toowits. Toowits provide no economic or any other tangible benefits to humans.

To broaden that argument; economic rationalisation argues that we should not spend too much money on mitigating climate change because the cost is greater than the benefit. This argument almost certainly allows additional climate change to what would occur if by some miracle humanity embarked on a massively costly mission to clean up its act overnight.

The economically rational additional climate change will almost certainly condemn many more species to extinction than would the massive effort to mitigate.

It is economically responsible for humans to commit SPECICIDE.

I find this completely peverse.

Ultimately the entrenched economic model will fail as critical species interconnections collapse and the global ecosystem unravels.

1. Mr. Taylor calls me "Michael" as if we are friends, but in fact we seem to be deeply disagreed. Thus, use of the personal name is a subtle putdown, I think. That's Dr. Tobis to you, thanks.

2. I have long been at pains to state that I am in favor of capitalism and of corporations with the minimal necessary correction to the system, and I explicitly disavow Marxism in this piece. Yet I am here accused of being "against the market", which is nonsense. This is exactly the accusation of dangerous radicalism that I am trying to avoid. I just want permission to think about these things rationally without accusations of subversion being flung. Apparently this is not allowed.

3. The poor innocent Cato Institute Fellow has no attachment to the growth ethic but merely wants to protect "freedom", a classic short-circuit device if ever there was one. Does this imply that to oppose Cato's positions is to oppose "freedom"?

4. Notwithstanding the claim to be agnostic about growth, there's an explicit claim that the advanced economies will quintuple in "income", based on computer runs "based on" work by IPCC WGII lead author. What that 65K per capita could possibly mean  escapes me, since we are running out of room to be wealthy. Perhaps it means that the same amount of real estate will be in existence but it will cost five times as much to own some of it. Perhaps we will need to pay for breathable air. That would stimulate the economy! Again, this waving around of large dollar amounts seems inclined to short-circuit discussion. Am I actually opposed to things getting better? No, I am opposed to things getting worse, and I am unconvinced that money measures the things that will matter in the future. This is exactly the question I am trying to raise.

5. Throwing Iraq into the conversation certainly isn't a good way to advance reasoned disocurse. It is guaranteed not to bring out the best in a reasonable person. It took me some time to calm down about that particularly nasty herring. How that let's-generously-call-it-a-terrible-mistake got crammed down the throats of a frantic and distracted public is a bleeding mess of an issue that I would rather leave on somebody else's turf. Leave me out of it please.

6. Most important, there is a reasonable sounding claim that "nobody is above criticism" without the slightest attention to actually defending the original question. That question is on what basis he asserts that conventional economics has any useful bearing on the question of our long-term sustainability, or to use the more right-friendly word, our long term security, never mind primacy.  What he presents instead is a mess of distractions and misdirections. See Mamet's Law.

As it stands, it's sort of an unfair battle since Taylor is paid and I'm foolishly and obsessively volunteering.

As is usual in such discussions I am forced to leave the last word to my opponent, unless he is actually willing to take up the topics at hand.


mt

... that even the Stern Report finds that consequences of climate change will not have near the impact on society that many people here at Grist probably fear.

that at least to me, the Stern Report summary hardly paints a rosy picnic for our future:

The investment that takes place in the next 10-20 years will have a profound effect on the climate in the second half of this century and in the next. Our actions now and over the coming decades could create risks of major disruption to economic and social activity, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century. And it will be difficult or impossible to reverse these changes.

Science provides information, looks at cause and effect, explains natural processes, provides an estimate of how our actions might affect other organisms, et cetera.

Economics can take this information and determine the most efficient means of maximizing human comfort and minimizing harm to the rest of the natural world.

Neither sciene nor economics should determine the actual policies followed. It should be up to voters to detemine what they want, how long they can wait, whether short-term or long-term costs are most important, what they are willing to sacrifice, et cetera.

My primary objections to economics are the tendencies to (1) look at economic activity in terms of averages -- I'm sure I'm using the wrong term here, but  hope you will understand -- rather than looking at  how trends affect individuals, (2) assigning positive economic value to activities like medical treatment of individuals exposed to industrial chemicals or cleaning up oil spills, and (3) not internalizing ALL costs. I think that's it.

It just doesn't make sense to say all is well because stock values are rising or GM's profits are up -- even though they might have just fired a bunch of workers! All is well when people earn enough income to own a modest home, feed and clothe themselves, have access to health care, send their children to school, and eventually retire between 60 and 70. Economics would make more sense and provide more useful information if they could come up with better indicators of economic health, PERSUADE BUSINESS TO PURSUE BETTER POLICIES, AND PERSUADE THE MEDIA TO COVER THE BETTER INDICATORS.

So... perhaps it is up to science to provide BETTER information for economists to work with. And it is up to both scientists and economists to better educate people so they have as much information as possible for making informed decisions. I'm generally quite cynical, but I still believe -- as Thomas Paine said -- that a large number of informed citizens will generally make the right decision.

There is a severe shortage of informed citizens at the moment, and creating an imaginary conflict between science and economics will only confuse them more.

I read Jared Diamond's "Collapse" quite some time ago, but if I remember correctly, the folks on Easter Island suffered because they chose to invest their resources in constructing religious monuments rather than feeding themselves.

Something about a competion between different groups -- the island was divided into pie-shaped territories so each group would have access to upland forest, agricultural land, and shoreline -- to see who could build the largest statues.

They had to cut down trees to accomplish this, which resulted in: severe erosion, drought, degradation of their agricultural land, loss of plant and animal species they relied on, lack of trees for building houses, lack of trees large enough for building canoes, and elimination of their ability to use canoes for fishing or evne escaping the hell they created for themselves. Large numbers of people starved, surrounded by sea life they could not collect for food. The most frightening part of this, described by Jared Diamond, is that Easter Island is an example of the hazards of "creeping normalcy". Each generation probably thought all was well and the surivors encountered by Europeans thought their island was alway devoid of large trees...

Science and economics must cooperate to make sure that human civilization -- globally -- is not terminated by "creeping normalcy".

There is a severe shortage of informed citizens at the moment, and creating an imaginary conflict between science and economics will only confuse them more.

Amen. For once I am in 100% agreement with you.

These are only my personal opinions.

That said I remain unconvinced that mainstream economic theory applies to the big questions of sustainability at all. It's just questioning economics, that's all.

I'm all for getting along, but I think it's fair to determine that someone is making sense before taking their advice at face value. I was unconvinced about mainstream economics when I wrote the article and I'm unconvinced now.

I'm struck by the lack of efforts to actually articulate a defense of their position in the present conversation.

Saying it's bad to be confrontational misses the point. This way to test and improve ideas is to question them, not to make some sort of turf trade. Are some of you folks suggesting that I agree to believe in economics if they believe in climatology? This to me is not an a very useful way of constituting beliefs.

I don't think we climatologists should be offended by people's doubts about our conclusions, and I don't think economists should be offended either by mine. Genuine skepticism should be treated as valuable.

Climatology which emerged from a harmless scientific backwater is ill-prepared for this, to be sure. Economics, however, seems well-defended. Alas this defense seem not so much a system of ideas and evidence but as bluster, arguments from authority and even intimidation.

We aren't discussing the structure of society here, we are discussing models of that structure.
I'm proposing nothing more than re-evaluating and extending our models to deal with newly relevant conditions. Is that really so out of line?


mt

Noise since then has tended toward uninformed rants against an extreme strawman (there are those who deny "externalities" but they are hardly "mainstream.")

Fine. Thanks. Good. Let's use those prescriptions. I am all for that contribution from mainstream economics. Who wouldn't be?

The problem is that we keep (reluctantly) bolting these "solutions" onto a vehicle that seems to be systemically producing ever more "externalities" that need to be dealt with - often alarmingly late in the game (SO2, CFC's, overfishing, etc.).

What's next? Nitrogen tax anyone? At least we will presumably have the "dance" well-rehearsed by then!

There is something wrong with "economics-as-usual" if it's solution is going to be to keep moving the vehicle in the same direction, ever faster, spewing out ever more negative issues to deal with. In a world of finite resources, finite waste sinks and finite regenerative capacity of ecologic services, an economic paradigm that abstracts those realities away with theoretical promises of substitutability, innovation and adaptation (and alchemy!) is deficient.

So, yes to the Pigou Club... Yes to the Montreal Protocol... Yes to SO2 cap&trade... Yes to fishing ITQ's... Thank economics and economists for their contribution to these successes... But don't think that their models of the "world" are "working"... although in the near-term, we've got to work with what is basically the only game in town...

The problem is that we keep (reluctantly) bolting these "solutions" onto a vehicle that seems to be systemically producing ever more "externalities" that need to be dealt with - often alarmingly late in the game (SO2, CFC's, overfishing, etc.).

That's the role of science, right?  To identify externalities?

The converse, to identify "sustainability," is the same thing, just viewed differently.  Like those optical illusions, one is a silhouette of the other, or vice versa.

Put differently, and maybe this is the key for "economics haters," you can put any sustainability argument into the language of economic externalities.

You can use the language of market boosters to explain when the market alone is not enough.

First, I believe the $2 per ton (mode) estimate of environmental externalities that come from greenhouse gas emissions is probably more accurate than the $14 per ton median estimate and $93 per ton mean estimate found in the literature for reasons that are made clear in the text of Richard Tol's paper.  If you go beyond the executive summary - to page 2069 and then through to the end - you will see why.

Second, there are plenty of economic models that have been constructed that impose constraints on resource availability.  Economic models, after all, are simply chained if/then propositions, and there are hundreds of environmental economists out there - many of whom would feel quite at home here at Grist - who worry about resource availability and its impact on the economy.  My experience has been that, when evaluating these models, if you accept the "ifs," the "thens" are perfectly defensible.  Just, I might add, as it is climate models.  The real debate is usually not over the calculations but over the assumptions.

Third, it is conventional wisdom with the economics profession that there will be continuing improvements in per capita GDP.  I am not aware of any consensus on a 3% annual growth rate, however.  Different economists assume different figures for the sake of calculation given the uncertainties involved.

Now, let's move beyond the questions to the more interesting comments.

The contention that economics is not science depends on how you define the latter term, which is not all that clear to me.  For instance, if I study cheetahs for a living with a particular focus on how they interact with one another, and I have degrees in biology or some other related field, few would quibble with the claim that I am a scientist.  If I study humans for a living in the subset of their activities that involve commercial interactions with other humans, how is that different in any functional way?  Some economists, of course, are engaged in purely theoretical pursuits where proof or disproof is hard to come by.  But so are a lot of physicists.  That should not trigger scorn and dismissal.  

Regardless, this is a semantic dispute of little import.  Lots of disciplines do not qualify as science as some of you might define the term.  It doesn't mean they're engaged in the functional equivalent of voodoo.

The argument that there are other scenarios of the future used by the IPCC that are of equal or greater interest than the A1F1 I cited is true ... sort of.  I think the A1F1 scenario of the future was the most interesting for the purposes of this conversation because it yielded the greatest amount of warming, sea level rise, etc. - and seeing what society looks like under that scenario - better! - was quite striking to me.  

But let's look at the B1 scenario that a poster cited above.  It assumes the least amount of CO2 concentration in 2085 (527 parts per million), the least amount of temperature increase (2.1 degrees C), and the least amount of sea level rise (22 centimeters) of all the models considered.  It also assumes the least amount of energy use and the most amount of energy efficiency.  Here's what the world looks like in 2085 relative to 1990:

• the population at risk from hunger declines from between 15-17% at present to 1.3%;
  
• the population at risk from water stress increases from 26% to 28%;
  
• the population at risk from coastal flooding increases from 0.2% to something between 0 and 0.5%;
  
• the amount of cropland needed to feed the world drops from 11.6% of the global landmass to 7.8% of the same;
  
• net per capita GDP in developing countries increases from $875 to $36,300 and from $14,500 to $65,700 in developed countries; and
  
• total human mortality from hunger, malaria, and coastal flooding will decline from 4.4 million to 2.1 million.

Regarding the resource scarcity discussion, let's think like scientists for a moment.  The hypothesis at hand is that we're running out of resources.  How might we test that hypothesis?  Check to see whether resources are truly becoming scarcer.  How do we do that?  The best metric regarding relative scarcity is price.  What happening to resource prices?  After adjusting for inflation, resource prices trends - with only a very few exceptions - show declines (some quite dramatically), suggesting that resources aren't becoming more scarce.  In fact, the evidence suggests that they are becoming more abundant!

So what does one make of this?  Some of you seem to argue that things can become more scarce (relative to demand anyway) without the price for those things go up.  Well, we're in the realm of economics now, and I doubt that you can find a single economist who would generally agree with that proposition.  Common sense suggests otherwise.

Here's how most economists explain this bit of curious data.  Resources are simply those assets that can be used profitably for human benefit.  "Natural" resources, then, are a subset of the organic and inorganic material we think of as constituting the biological "environment," since not all of that material can be used profitably for human benefit.  But what can be used productively by man changes with time, technology, and material demand.  Waves, for example, are not harnessed for human benefit today and thus cannot really be thought of as a "natural resource."  But the technology to harness the movement of waves as a means to generate energy certainly exists, and the day when the cost of doing so is lower than the cost of alternative energy sources is the day when waves become a "natural resource."  Uranium, to cite another example, would not have been considered a resource a century ago but is most certainly thought of as such today.  Petroleum was not an important resource 150 years ago but today is thought of as perhaps the most important resource to modern society.  Thus, the "natural resource base" is itself a relative thing and its components vary greatly with time due to technology and material demand.  We have been creating resources - not depleting them - because our ability to identify natural assets that can be used profitably for human benefit has increased over time.

Empirical examination provides ample support for this particular hypothesis.  Economist Joseph Stiglitz in a classic study found that exogenous technological advances lead to long-run gains in per capita consumption in lesser developed countries under conditions of exponential population growth and limited, exhaustible stocks of natural resources (Joseph Stiglitz, "Growth and Exhaustible Natural Resources: Efficient and Optimal Growth Paths," Review of Economic Studies, Symposium on the Economics of Exhaustible Resources, 1974, pp. 123-38).  Economist Edward Barbier found that even in a growing economy, technological change is resource augmenting (Edward Barbier, "Endogenous Growth and Natural Resource Scarcity," EEEM Discussion Paper 9601, Department of Environmental Economics and Environmental Management, University of York (U.K.), 1996).

In sum, belief in mineral resource depletion strikes me as something akin to religious belief.  One has a very hard time marshalling evidence for it and a hard time avoiding all of the evidence against it, but belief in it from many quarters is completely unshakable.    

Two final housekeeping matters.  First, my engagement here does not signal that I implicitly believe that climate change is a significant problem.  It simply means that I hold out the hope that reasoned exchange between me and all of you might prove useful and intellectually worthwhile.  I actually like talking to the Left when I find myself in a serious and civil venue for it.  Second, I meant no offense by referring to Dr. Tobis as "Michael."  It was meant to signal friendly engagement - something I value.  

First, I believe the $2 per ton (mode) estimate of environmental externalities that come from greenhouse gas emissions is probably more accurate than the $14 per ton median estimate and $93 per ton mean estimate found in the literature for reasons that are made clear in the text of Richard Tol's paper.  If you go beyond the executive summary - to page 2069 and then through to the end - you will see why.

I guess my man-in-the-street boggle on this is that I think energy prices have risen more than would correspond to $2/ton in the last few (5?) years, with no decrease at all in CO2 emissions.

Yes they have ... demonstrating that it would take a major increase in the cost of fossil fuels to get even minor reductions in their use.

For what it's worth, the other side of my man-in-the-street experience is that it's been trivially easy for me to slash my carbon footprint, while reducing my costs, and increasing my health and happiness.

I think pessimists (those who moan that "it'll cost us a trillion) just haven't tapped their own creativity.  Heck, maybe some are even afraid to open that door marked "creativity" for fear of where it will lead.

I guess my general question was, wouldn't it be better to simply direct government money to build whatever it would take to decrease carbon emissions, rather than mess around with carbon taxes and cap-and-trade policies.  But I suppose that until you're convinced that it's that important, and you think market strategies wouldn't work -- which, knowing the thinking at Cato, would be quite an interesting situation -- then you probably wouldn't much like direct investment either.

But most preferable - in my opinion - is to do nothing.  I hold that reducing greenhouse gas emissions will do more harm to human wellbeing than to live under a business as usual world given the current state of scientific knowledge.  Since I've already gone into why that is elsewhere, I won't hit do so again here unless invited.

Wouldn't it be better to simply direct government money to build whatever it would take to decrease carbon emissions, rather than mess around with carbon taxes and cap-and-trade policies.

Given that there are hundreds of ways that carbon emissions can be reduced, could you please explain to us the process under which you envisage Big Brother the Government choosing among the different technologies, spending the money, and ensuring that both the contracts and the benefits alre allocated equitably?

The last time the Government attempted to intervene big in the energy area, for example, it wasted billions upon billions on synfuels.

These are only my personal opinions.

So, having said that, how does government "pick" technologies, which seems to be the word that keeps coming up.  To some extent, it depends on how much of an emergency we think we're in.  If it's a big enough emergency, we discuss it, lobby, interests fight, and solutions -- say, putting solar energy systems on every roof -- let's say the solar technology the government picked would not the best choice.  Maybe it's the third-best choice.  (Actually, you could avoid all that by just giving every building owner a voucher to buy solar from whomever the building owner wanted, so it wouldn't even be picking).  But let's assume it was picking.  Even then, if the emergency is bad enough, then even third-worse would be better than nothing.

There's another idea which has been burbling around in my head, which is part-way between "command-and-control", as Jerry calls it, and the market -- building a limited set of a particular, picked technology, say, solar thermal farms, again maybe not with the best technology for bad political reasons -- but at least it would give engineers and managers the confidence and experience they would need to want to try more in the future.  I fear that one of the main reasons coal is preferred around the world is because engineers and managers are comfortable with it -- it's like the old idea that an IT manager would never get fired for picking IBM (or Microsoft now).

So, I'm not saying the process would be most efficient or optimal, but compared to the alternative, it might be better.

Jon,

You want to use our government to do what it was never designed to do, kinda like using a ski boat to plow a field.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

But in any case, the examples around the world are quite demonstrative, and Americans are people just like everybody else, so there is no reason we can't learn from others.  Would there be dumb mistakes, screw ups, pork barrel?  Sure, just like in the private sector.  But it's better than the alternative, doing nothing (and I'm not saying instituting carbon taxes and cap-and-trade is not doing nothing, it's doing quite a bit, I just think that direct investment may be better, but that's obviously an unsubstantiated hypothesis at this point).

In other words, it depended on the speed with which a country had to catch-up -- the most extreme case being the USSR, but the Koreans and Japanese also used various modes of intervention at various times in their history, as have others.

Similarly, if the speed with which we need to mitigate global warming is high, then that would indicate that the government would need to be more intimately involved in the economy.  Of course, the reverse operates as well -- if we have a decent amount of time, the market can be relied on more.

The biggest danger, the way I see it, is that if the market-oriented solutions -- say carbon tax/cap-and-trade -- don't work, and we find ourselves in the midst of a series of horrible disasters, then the government could very well step in and basically be forced to virtually take over the entire economy.  So -- and this may be a bit too abstract -- it might be better to have more government intervention now, because that will mean that much less government intervention will be required later.

By then [2013], our ability to solve the climate problem the market-friendly way will have all but disappeared, and we will need a World War II-scale effort to avoid the ever-approaching catastrophe. By the end of the next decade, it won't just be climate scientists who are desperate, it will be all of us.

Let's assume, for argument's sake, that some crash program of investment (but why only investment?) is needed to reduce carbon emissions. I still don't see how that automatically leads to government command and control being the preferred option. The USSR, Korea and Japan were war-torn, semi-feudal societies at the time that they began their great leap forwards (if that term even can be applied to the USSR). The United States, with its highly developed capitalist system, and extensive and sophisticated physical and financial infrastructure (not to mention educated and skilled workforce), is a completely different kind of place. Its people and companies probably have more ideas, and can mobilize resources much more efficiently, than can the government.

You pooh-pooh market-oriented solutions like a carbon tax or a cap-and-trade, but the beauty of such policies is that each person, each economic agent, can decide best how he or she is going to economize in light of the policy. I shudder to think what boondoggles the U.S. Congress would think up if instead they were handed over a huge amount of the nation's treasure and asked to "solve" the climate problem. Are you worried about the influence of energy companies on policy makers now? (I hope so!) Just imagine their influence with a hugely expanded budget envelope.

Does that mean I see no role for government expenditure? Of course not. There is probably much more that could be done through increasing spending on R&D, for one.

These are only my personal opinions.

The US is busily dismantling its manufacturing sector -- there's a relevant article by Paul Craig Roberts over at Counterpunch.com today.  So it may need a big push from government -- but government does not necessarily mean the Federal government, the Feds could provide the money but the localities could decide how to use it, within certain guidelines.

I also would prefer that, where possible, every economic agent make his or her choice, but some things like public transit need collective, democratic decisions.  And again, individuals or groups could get renewable energy vouchers that they could use as they see fit.  Government need not make the actual decisions, but governments might need to provide the capital, or some of the capital, because the private markets are not doing their job -- there is no rush to makeover the energy system or the transportation system.

Now, if carbon taxes/cap-and-trade can move private actors to "do the right thing", then great.  Maybe it would help if the alternative of direct government investment was breathing down the business community's collective necks, they might jump to support carbon taxes/cap-and-trade a little faster.

Given that there are hundreds of ways that carbon emissions can be reduced, could you please explain to us the process under which you envisage Big Brother the Government choosing among the different technologies, spending the money, and ensuring that both the contracts and the benefits alre allocated equitably?

How about "democracy"? One person, one vote, electing people who respond to people's needs and guard against corruption. This does happen! Think of social security and medicare as successful government programs. Where government is corrupt in the economic sphere I would lay at the feet of undue market influence.

Markets operate according to the principle one dollar, one vote, thereby distorting the effects of wealth and priviledge. They are also blind, unaccountable, and just as open to corruption as government.

While markets can bring jobs and lead to wealth creation for a few, they also lead to exaggerated class division and inequality. But governments can redistribute wealth, in effect making markets acceptable to the majority of people. However, it is only through the struggle of working people, particularly through labor organizing, that we have such things as weekends, vacations and the minimum wage. These benefits we take for granted were opposed, often violently, by the business class. A good place for the uninitiated to learn about our economic and social history is Howard Zinn's, People's History of the U.S.

Jon Rynn seems to feel that the government instead should pick winners (as Congree just did in the draft Energy Bill?!!) and then invest massively in them. If that is his (and your) opinion of the best way forward, I respectfully disagree.

These are only my personal opinions.