Bob Murphy's Critique of Bill Nordhaus
By David Henderson
In March, I had a post about William Nordhaus’s article in the New York Review of Books, an article in which he responded to claims by 16 scientists who are global warming skeptics. That post gave rise to a lot of good comments.
Today Bob Murphy published an excellent critique of Nordhaus’s piece. The whole thing is worth reading. I’ll hit some highlights.
1. The last 10 years. Murphy catches Nordhaus in a rhetorical sleight-of-hand. Nordhaus had written:
The first claim [of the 16 scientists] is that the planet is not warming. More precisely, “Perhaps the most inconvenient fact is the lack of global warming for well over 10 years now.”
Notice the rhetorical sleight-of-hand: Nordhaus attributes the claim that “the planet is not warming” to his critics, and then at least has the courtesy to follow-up with their actual statement that “the most inconvenient fact is the lack of global warming for well over 10 years now.”
Those are different statements. Yes, it’s easy to knock down opponents when Nordhaus is allowed to change their position. The 16 signatories to the WSJ piece never claimed that “the planet is not warming,” relative to preindustrial times. No, what the 16 signatories to the WSJ piece claimed–and which is true, at least depending on which data set one uses–is that there has been no global warming in well over the last ten years. Indeed, look at Nordhaus’ own graph: It shows that the current temperature deviation (of about 0.8 degrees Celsius) is the same value as it was back in the late 1990s. And yet Nordhaus somehow thinks this chart should embarrass his opponents.
By the way, a good editor of Nordhaus’s piece would have caught this. Had I edited it, I would have insisted that Nordhaus admit that they’re correct. My edit would have looked something like the following: “They’re right about the last 10 years. The previous 100 years, though, are a different story. During that time, global temperatures rose by an average of about 0.8 degrees C.” I’m guessing, though, that the 16 scientists weren’t disputing this.
2. Whether actual global warming has been less than what the models predicted.
Notice what Nordhaus has done: When faced with a skeptic challenge that the climate models predict more warming than has actually occurred, Nordhaus retreated to defending the view that the prevailing suite of climate models explains past temperature movements better when they attribute a sizable impact to human activities, than if these computer models are run with natural influences (“forcings”) alone.
These are entirely different claims. The WSJ scientists were not claiming that anthropogenic changes to the atmospheric composition have not given rise to an increase in the global average temperature, but that the increase has been less (considerably so) than that produced by the standard collection of climate models. It should come as little surprise that the climate models do not well capture the actual climate, because the climate is fiendishly complex, incompletely understood, and hence difficult to model. Consequently, it is reckless to go forth with trillion-dollar taxation schemes on the basis of our limited understanding. Until models are able to more accurately replicate the climate behavior of the observable past, it is foolish to think that they will produce reliable climate projections of an uncertain future.
3. Economic damage from global warming.
Nordhaus had written:
The question here is whether emissions of CO2 and other greenhouse gases will cause net damages, now and in the future. This question has been studied extensively. The most recent thorough survey by the leading scholar in this field, Richard Tol, finds a wide range of damages, particularly if warming is greater than 2 degrees Centigrade. Major areas of concern are sea-level rise, more intense hurricanes, losses of species and ecosystems, acidification of the oceans, as well as threats to the natural and cultural heritage of the planet.
But Murphy goes back to Tol’s work and, on that basis, writes the following:
As Tol’s diagram quite clearly indicates, the consensus of economic studies finds that global warming would be on net beneficial to human welfare, at least through 2C degrees of warming (and this is relative to the current baseline, not to preindustrial times). This is not at all what the innocent reader would have taken away from Nordhaus’ description of Tol’s findings.
4. The benefits or harm of taxes on carbon.
On this, Murphy quotes an earlier piece he wrote on Nordhaus’s DICE model:
The 2007 DICE model contains simulations not just of the baseline (no controls) and the optimal carbon tax scenarios, but of many other policies as well. These calculations show that the dangers of an overly ambitious or inefficiently structured policy can swamp the potential benefits of a perfectly calibrated and efficiently targeted one (that is, the optimal carbon tax scenario). As table 4 indicates, Nordhaus’s optimal plan yields net benefits of approximately $3 trillion (consisting of $5 trillion in reduced climatic damages and $2 trillion of abatement costs). Yet some of the other popular proposals have abatement costs that exceed their benefits. The worst is Gore’s 2007 proposal to reduce CO2 emissions 90 percent by 2050; DICE 2007 estimated that Gore’s plan would make the world more than $21 trillion poorer than it would be if there were no controls on carbon.
Although leading climate economist William Nordhaus tries to cast himself as the messenger of objective science, his attempt to rebut the “global warming skeptics” is itself filled with misleading arguments. The actual situation is that the physical climate models have indeed predicted more warming than has actually occurred, while the economics literature casts serious doubts on the case for immediate government mitigation efforts.
UPDATE: I just noticed that David Friedman wrote a post highlighting Murphy’s article. David also pointed out something I had missed. He wrote:
One point Murphy did not make but that is worth noting is that the benefits of climate control, on Nordhaus’s own figures, are not very large. The optimal policy–for obvious reasons not likely to occur–is calculated to produce a net benefit of about three trillion dollars. That sounds like a lot of money–until one recognizes that it is spread over the entire world and about ninety years. That makes the annual benefit of the ideal policy about 33 billion dollar a year–roughly one percent of the current U.S. federal budget or one tenth of a percent of current world income.
Which suggests that, with a less ideal and more realistic policy, net costs are likely to be larger than net benefits.
Actually, $33 billion a year is one twentieth of a percent of current world income.