Understanding Climate Risk

Science, policy and decision-making

Nope – I can’t change your mind on climate

with 4 comments

So after last night’s ABC program I Can Change Your Mind on … Climate live blogged here, the answer is a resounding “No, You Can’t”. Minchin in an op-ed in The Age/SMH:

I’m sure I did not change her mind, but I hope she saw that not all sceptics are mad, bad and dangerous; that there remains a lively scientific debate about the drivers of climate change; and that scaremongering about global warming is backfiring on the warmists.

He goes on to say that of Lomborg’s cornucopian solution:

Lomborg instead advocates significant global investment in green energy research and development in order to make green energy so cheap that everyone will want it.

Now, that I can support. If there is to be any common ground between sceptics and warmists, this surely must be it. Let’s work to make green energy a realistic, affordable alternative, instead of stupidly trying to make conventional energy so incredibly expensive that we will stop using it.

This clearly shows he discounts future damages to the point that current alternative energy sources should be cheaper than a mature technology that has larger subsidies than the alternatives and huge amounts of waste in the form of heat loss and other inefficiencies. It is very likely that the $23 per tonne of CO2 starting price for the Australian policy is less than the net present value of future damages at a 4%-5% social discount rate. This is the same as paying as deposit on a drink container, or rates for landfill space for expected waste, or any number of levies that have an identified social and/or environmental benefit that make future management less costly.

That is, he maintains that in addition to the science being wrong, that economics can discount future damages  to the point where only current energy prices matter.

Michael Ashley on The Conversation reckons Minchin’s choice of experts makes him look foolish. Apparently Rose has written a book on the experience, which should be worth a look.

One of my points is that the science policy-nexus can be tested: from a comment on the previous post: here’s how.

A lot of the statements that were made unchallenged last night can be tested. In 2005 we built a simple integrated model and ran it at a climate change conference when we asked people what damage they would wear and what they thought was a tolerable level of warming and stabilisation target. We then tested everyone’s priors in the break (about 250 people) and showed whether their risk tolerance was met or exceeded. We than asked everyone whether they wanted to change their policy targets. Pretty much all came down. When you make the numbers explicit people’s prior assumptions are tested and often busted.

It would be possible to build a model that does specific policy and energy numbers for the globe including China, India, US and Australia and test that on temperature rises timing and major impacts. We have all the raw materials at VU and could put it together in about 6 months with specific funding. We have plans to do it anyway, but that plan a bit slower in its timing at the moment. One could then take all of these different assertions that were made last night and test them pretty much on the fly. That is, you could take someone’s general points on how fast the technology transitions and fossil fuel reductions are, put it through a simple climate model and compare that against impact response functions to say this is what that policy is likely to produce. It’s doable.

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4 Responses

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  1. Net present worth is a risky measure when what the directors are considering is risking the company. Makes even less sense when what is being talked about is risking the planet.
    What seemed to be going on was two people talking past each other. Rose talking about risking the planet, Minchin about risking the economy. Perhaps it is time climate action supporters started challenging the “destroy the economy” lie. For example, the grid/air conditioning related increases in power costs over the last few years are actually larger than the increase in power costs required to substantially clean up electricity

    John Davidson

    April 27, 2012 at 9:33 pm

    • The other way of making a connection between the two sides would be to point out that destroying the planet will, in fact, destroy the economy … or is that too obvious?

      malcolm

      April 28, 2012 at 12:57 pm

      • Many of us have been saying this for years, malcolm. I think it first occurred to me in about 1972.

        dave50

        April 28, 2012 at 1:29 pm

  2. Yairs, but when you talk about risking the planet, people say “the planet will pull through”, and that’s true given enough time. We are on the pathway to another great extinction though, and the designation of a new geological era, the Anthropocene, suggests who is driving those changes. It hasn’t been formally adopted as an Era though. Perhaps it should be

    The problem with going down an extinction cascade is that by the time you are racking up numbers that compare with previous geological events, it’s too late to stop the process bottoming out somewhere really unpleasant. I think the global economy (and international security) will go somewhere very unpleasant long before that happens.

    It was clear that Minchin did not believe any of these things could happen and even if they did, Australia couldn’t do anything about it because it’s too small. In his view, Australia’s success is based on abundant resources and cheap energy, few people and a democratic system that rewards individual endeavour. To jettison this on the basis of uncertain science (in his view) that put all that at risk was too great a moral hazard. Also looming large was the moral hazard of turning to a governance system that emphasised collectivism at the expense of individualism. Because that’s what brings us (in the world of circular logic) distributive wealth. Clive Palmer in Q&A was saying pretty much the same thing.

    Where are the economists? John Davidson is quite right to point out that NPV is a measure of marginal value, whereas these more fundamental values at stake need to be measured by very different metrics. It’s a serious matter. Academic economists do work with more than the narrow monetary economy seen through the eyes of neo-classical economics. Economics is a very useful tool to help show us what’s possible – combined with science the two can be very powerful. But at the moment these possibilities are pretty much invisible.

    Roger Jones

    April 28, 2012 at 2:34 pm


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