Bjorn Lomberg is best known for his controversial book The Skeptical Environmentalist in which he applied an economist’s perspective and econometrician’s toolbox to the question of how pressing global climate change really is and how effective many of the more radical proposed political solutions to the problem are. Lomberg has also organized a semi-regular meeting of prominent economists called “The Copenhagen Consensus” in which members of the group discussed and debated the best way to allocate resources in order to address the biggest challenges facing humanity such as hunger, disease and climate change. This perspective as an economist, with an emphasis on decision making under constraint, and econometrician, relying heavily on the actual data not interpretations of the worst case scenarios, makes Lomberg a well-respected scholar in some circles, but also the target of those who like to simplify policy debates along simple “left-right” continuums.
In this episode of EconTalk Russ Roberts and Lomberg address some of the key issues facing the world today. Once again we can see Lomberg the pragmatist on display throughout the conversation. He is not concerned with the growing frequency of extreme weather events because the data do not show such a pattern. Instead he argues that increased media coverage and global interconnectedness are leading to more attention being given to these events even though there are fewer. He calls it the “CNN Effect” on the climate.
Among the questions we might ask ourselves during this episode are:
- Lomberg consistently argues that wealth creation is better for humanity than large redistribution programs that are unproven in lowering CO2 emissions. Is it true that making ourselves richer is the best way to protect ourselves against climate change? Does the path to wealth always value environmental quality? Or does the Kuznets curve make this conclusion more nuanced?
- Is there something wrong with people giving charitably or making difficult political choices because they want to experience the “feel good factor” Lomberg describes?
- How is the political arena, imperfect though it is, important in resolving policy debates as compared to using just markets?
- In the wake of the worldwide reaction against free trade, what are we to make of Lomberg’s claim that simply finishing the final round of the Doha Trade Agreement would do more than increase human well being than any climate program?
- Individually and collectively people regularly choose less wealth in various aspects of their lives. Should the question be where is the equilibrium where wealth creation can continue to alleviate poverty and limit the impact of climate change? Put another way – how can we “feel good” and be rich at the same time?
READER COMMENTS
John Alcorn
Jun 25 2019 at 9:35am
All good questions!
Re: “Is it true that making ourselves richer is the best way to protect ourselves against climate change?”
The wild card is the non-zero probability of catastrophe. Compare Robert Pindyck’s EconTalk interview about climate change.
Re: “How is the political arena, imperfect though it is, important in resolving policy debates as compared to using just markets?”
Although pollution is the textbook case of a ‘negative externality’ of some markets, other markets can help to solve the problem. Shi-Ling Hsu makes a case for prediction markets to shape public policy about climate change:
Scott Sumner
Jun 25 2019 at 5:48pm
Back in 2008, Aaron Jackson and I wrote a paper calling for the creation of prediction markets to predict climate change.
http://www.econmodels.com/upload7282/efae68d98251d757b48dfaef0295c28e.pdf
Thaomas
Jun 26 2019 at 10:59am
Is this feasible when the outcomes are decades in the future and depend crucially on policy decisions taken in the intervening time?
John Alcorn
Jun 26 2019 at 12:21pm
Dr. Sumner,
Thanks for the pointer. I wish I’d found your article years ago! Googling it now leads me also to Gary Lucas and Felix Mormann, “Betting on Climate Policy”, UC Davis Law Review 52:3 (2019) 1429-1486, which states:
Back to your article: It’s full of fresh points. Here are two of the most striking:
• You explain ‘the circularity problem’ in prediction markets, and how to solve it for prediction markets about climate change.
• You explain how prediction markets can estimate climate change and dynamically calibrate a mix of abatement policy (e.g., a carbon tax) and remediation policy (geo-engineering).
I’d like to add something to one of your general conclusions. You write:
I’m keen to add to the mix a 3rd type of policy, which your article doesn’t address: adaptation. Thomas C. Schelling emphasized that we should invest also in adaptation to climate change. Many kinds of adaptation—for example, construction of dikes—can be effective as local remedies. Unlike a carbon tax, local adaptation doesn’t depend on elusive international cooperation in order to be effective. Alas, a crucial non-local form of adaptation, international migration, does require (currently elusive) cooperation by destination nations.
Mark Bahner
Jun 27 2019 at 11:49am
No more dikes!!! 🙂
Do this simple analysis that I did after Hurricane Katrina:
Does it make sense to do better protection of New Orleans, and then the next hurricane hits Miami, or NYC, or Tampa, etc.? –>The answer is, obviously, “No, that doesn’t make sense. We need something that’s portable…like super sandbags…or something.”
What do we have a lot of at every location in the world that’s threatened by storm surge?–>The answer is, well, we have seawater. That’s why we’re thinking about dikes. And everywhere has air, of course. Lots of free air.
So, combining those two questions with obvious answers: We need a portable system that uses seawater and air to hold back seawater.
How do you do that? You bring long impermeable tubes to the place you expect the hurricane/typhoon/cyclone storm surge. You fill the tubes with air and seawater. The part of the tube filled with air floats above the water and catches the water that’s being blown ashore (i.e., the storm surge). The part that’s filled with seawater provides enough mass that the part filled with air doesn’t just get blown ashore. A “skirt” extends down to the sea bottom to keep the water that’s accumulating behind the air-filled part from leaking under the tubes.
This is a low-cost system that can be used by any city, anywhere in the world, to protect against storm surge. Its main materials are seawater and air, both of which are free and abundant anywhere in the world that will be threatened by storm surge.
It’s a 21st century solution to the problem of hurricane/typhoon/cyclone storm surge. If it had been around for Hurricane Katrina, the system would have paid for itself simply on the avoided damage–$75 billion–from the storm surge of that one storm alone.
https://www.nhc.noaa.gov/surge/
Mark Bahner
Jun 28 2019 at 1:42pm
Hi,
In 2007, I recommended this wildly expensive prize fund. It’s wildly expensive, but still vastly superior to the status quo of the IPCC making “projections” for the future, because the IPCC has absolutely zero incentive to make honest predictions. In fact, the IPCC has every incentive to make dishonest “projections,” which they even carefully point out are not “predictions!”
A method for achieving honest climate predictions
Thaomas
Jun 26 2019 at 7:00am
I could not understand why (or if) Lindborg thinks there is a conflict between a revenue neutral carbon tax and continued growth in wealth creation which will be necessary to deal with the consequences of CO2 accumulation already in the atmosphere plus the additional accumulation before sequestration technology has become financially viable enough to begin removing CO2.
Thaomas
Jun 26 2019 at 7:16am
Another question is why (if?) Lindborg would think that completing Doha and carbon taxation, granted that both are politically difficult, are alternatives for dealing with climate change? Specifically, Doha might be useful in establishing how countries with carbon taxes would treat imports from countries that do not yet have them.
Cjones1
Jun 26 2019 at 3:05pm
The discussion concerning AGW fixes might be outdated and foolhardy if, as many physicists note, a Grand Solar Minimum comparable to the Maunder Minimum is commencing in 2020 and will last approximately 25 years or more.
The political folly to sacrifice economic wellbeing for a global warming paradigm that is contradicted by past and present metrics is not prudent policy.
This year has witnessed many crop failures due to cold snsps, floods, and droughts. Not a dust bowl perhaps, but serious enough that better preparation is warranted before more food riots or upheaval occur.
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