Costing the climate

Written for publication in July 2005.

To their considerable surprise, British journalists at Gleneagles were approached by members of the US delegation wishing to comment on a recent report by the House of Lords Committee on Economic Affairs.  This report, ‘The Economics of Climate Change’ was published to little notice on July 6th.

It is a document that diminishes its distinguished authors and obfuscates rather than illuminates the climate debate.  There is a glaring gap between the confidence of its abstract and conclusions and the evidence and reasoning, such as it is, provided in their support.  The drafters clearly believe that few policy makers or politicians will read the main body of the report, let alone the minutes of evidence.

The text is mottled with innuendoes intended to undermine confidence in the Intergovernmental Panel on Climate Change (IPCC) and the ever more insistent calls for more urgent action from the wider scientific community.  Arguments deployed by well known climate contrarians are cheerfully listed without challenge.

There are far too many flaws for them to be wholly accidental or to be dealt with properly in a brief comment.  A few examples will have to serve as an intellectual health warning on the need to exercise care in accepting what is said by their Lordships without more careful examination.

Having carefully rehearsed a long list of the contrarians doubts, the Committee was struck by a fit of modesty.  ‘We do not propose to evaluate these doubts, nor are we qualified to do so’. Quite.  Two pages of the report are promptly devoted to examining at length one of the most contentious doubts – the issue of the long term temperature record.

Two of the Committee’s Canadian witnesses, McIntyre and McKitrick, argued that the seminal paper showing that the temperature rise of the late 20th Century was unprecedented contained fatal flaws.  The report then makes the damaging claim that ‘We sought evidence that refuted the claims of McIntyre and McKitrick, but have not come across any detailed rebuttals.’

They might have tried listening to the Today programme.  The author of the original paper, Michael Mann, gave a detailed rebuttal on air in February of this year.  They could also have tried Google.  If so they would have found links not only to Michael Mann’s own detailed rebuttals but also to the findings of several other research groups who, using different data and different methodologies, have reproduced Mann’s original result in all essential respects.

Much is made of the fact that climate science is uncertain.  Their Lordships, however, fail to point out that what scientists mean by ‘uncertain’ is not that their findings are in doubt but that the precise value may be slightly higher or lower than the one given.  Interestingly, they also fail to point out that as these uncertainties are being gradually resolved it is becoming clear that climate scientists have, on the whole, underestimated rather than overstated the magnitude of the threat.

The main thrust of the report is to examine the relationship between the climate and the economy.  The central question the Committee sought to examine was whether the costs of doing anything about climate change were worth the benefits.  Nobody could fault their courage.

As they themselves point out, ‘the science of measuring climate impacts remains speculative’.  This overstates our ignorance.  But it does correctly point out that we are low on the learning curve of understanding the ways in which large scale changes in the climate translate into impacts on specific geographical locations.  Furthermore, we understand even less about how human beings will respond to those changes.

If so, it is difficult to see how the Committee arrived at its self-assured conclusion that ‘in terms of world GNP, monetised damage is relatively low, even for a warming of 2.5°C.….. some models suggest no real net damage to rich countries.’ How one manages to monetise impacts you cannot describe is not explained. Having assiduously pointed out the technical difficulties of modelling the climate earlier in their report it is hard to understand why the Committee then places such confident reliance on economic models whose validity is even more in question and for which the data are, on their own observation, even more lacking.

It was probably not their intention, but what their Lordships have actually accomplished with this report is a demonstration of the theoretical and empirical poverty of economist’s understanding of climate change and its implications for humanity.  Strangely, their recommendations say little about how this lacuna might be remedied.