Daniel Reeves has written this reaction piece to my write-up of our bet. I’m in blockquotes; he’s not.
By the way, I will be in Guatemala from November 11-16. I’ll be doing a bunch of events at Universidad Francisco Marroquín on Friday, and speaking for the Mont Pelerin Society on Monday. I’ll be at Tikal over the weekend. If you see me in any of these places, please say hi!
Now here’s Daniel.
Bryan seems to start by acknowledging that 6 degrees of warming (we’re approaching 1 degree so far, for those just tuning in) would be devastating and that a 10% chance of that by the end of the century warrants mitigation efforts. He even acknowledges that — warming being proportional to cumulative historical emissions — we can’t afford to wait. Assuming that that 10% is correct. And then the core of his argument is that that 10% must not be remotely correct because of how biased the authors of Climate Shock must be to be writing an alarmist climate change book, good as it is for an alarmist climate change book.
This feels frustrating to me because it sounds like: “I disbelieve this book because the authors are so biased. How do I know they’re biased? They wrote an alarmist climate change book!”
The whole point is to assess whether the alarmism is correct. If you dismiss the authors for the very fact that they think alarmism is correct then you are fundamentally closed-minded on this issue and probably shouldn’t have accepted the bet. (To be clear, I’ve paid up already.)
My point-by-point replies follow:
1. Wagner and Weitzman place huge weight on the “fat tails” of climate disaster, and fixate on a 10% chance of hitting 6°C global warming.
I mildly object to “fixate” here. I would call it bending over backwards to be as non-alarmist as possible, focusing on the unambiguously devastating tail risk and minimizing quibbling about the potentially confusing mix of costs and benefits of milder warming.
a. I’m not remotely surprised that Wagner and Weitzman say there is a 10% chance of disaster. Given that they’re writing a book about climate change, I actually expected a higher probability.
This sounds like assuming bad faith. My sense from the book was that the authors were incredibly conscientious and intellectually honest. But maybe I’m misunderstanding you and you’re agreeing that it’s impressive that the authors resisted the temptation to exaggerate the probability?
b. I’m not qualified to assess the research underlying this probability, but I suspect that it is overestimated because (a) predictions of disaster are almost always wrong, and (b) climate experts have a strong and obvious left-wing bias.
Yes, the politicization of this topic is infuriating. See Scott Alexander’s delightful alternate-universe synopsis of climate change being politicized in the opposite direction.
But this is why I was so hopeful about you reading Wagner and Weitzman’s book. It doesn’t seem to me to have too much left-wing bias.
(Also some of the bias is trying to counteract the other side’s bias, which is what turns the whole topic into an epistemic nightmare. I don’t think you can just pin all the bias on the left. Isn’t there even greater right-wing bias to rationalize business-as-usual?)
But let’s rise above all that and just try to understand what’s true. In that spirit, it’s fair to do the Bayesian updating from your skeptical priors but maybe you could clarify how far the book shifts those priors?
c. Furthermore, it is quite clear that climate experts were heavily left-wing long before they started studying climate. So it is hardly surprising that the smartest people working in this area are so pessimistic. They started with a more talented team of advocates.
Counterpoint: The famous Exxon report from the 80s that perfectly predicted our current 1-degree warming.
d. Wagner and Weitzman don’t consider the total disasters that might result from aggressive climate policy. Like what? Most obviously, their policies keep the world poor, hence war-prone, for many extra decades. Which in turn raises the probability of World War III before 2100 from say 10% to 15%.
Some policy interventions — say, funding carbon capture — don’t have that possible failure mode.
Side note: I think Pigouvian taxes should be philosophically fundamental to laissez faire capitalism (by maximizing how much faire we can laissez) and that we want a carbon tax even if — in light of geoengineering? — it’s lower than Wagner and Weitzman recommend. I also disagree that Pigouvian taxes are fundamentally impoverishing. I’m a fan of revenue-neutral carbon taxes.
2. Wagner and Weitzman are extremely optimistic about geoengineering, yet childishly reject it. […] Why childish? Because when they actually discuss the evidence on geoengineering, it’s far more solid than “an experimental lung cancer drug treatment that showed some promise in a lab.”
Wait, can I still win this bet on a technicality if Wagner and Weitzman inadvertently convinced you that we should pursue stratospheric aerosol injection (what they mostly mean by geoengineering in the book)? I don’t know how serious I am with that question but I’d love to understand your thinking more!
In the meantime, I’ve read a persuasive-sounding pitch for geoengineering by David Keith, which also explains why we should think of it as a last resort. From that plus my recollection from Climate Shock:
- Geoengineering doesn’t mitigate ocean acidification
- It worsens air pollution
- It increases climate variance and extreme weather events
- It damages the ozone layer
- Unknown unknowns
It’s probably especially important to take #5 seriously. I definitely didn’t get the impression that Wagner and Weitzman were being childish about this, even if they’re ultimately wrong about geoengineering.
Frankly, it looks like Wagner and Weitzman want to impoverish the world by many extra trillions of dollars to ensure that humanity’s savior is the United Nations instead of the United States or (horrors!) Elon Musk.
This is Bulverism!
3. Wagner and Weitzman barely mention nuclear power or the absurd regulatory burden under which it labors. This fits with the Social Desirability Bias story, and makes me further distrust them.
I may be more trusting than you but I’d only have distrusted them on those grounds if they’d argued against nuclear energy. Wagner and Weitzman think policy intervention should be limited to carbon taxes. Nuclear energy doesn’t emit carbon so they are implicitly pro-nuclear. I’m sure they’d agree about the absurd regulatory burden as well. They do spend a lot of time in the book on the absurdity of the current fossil fuel subsidies, which I’m sure you also despise.
READER COMMENTS
Jorge Landivar
Nov 10 2021 at 9:09am
“Some policy interventions — say, funding carbon capture — don’t have that possible failure mode.”
– but it does. Look at the estimates on how much corn yields have increased due to increased CO2…. now what happens if that CO2 drops. I am not convinced CO2 caused global warming is actually bad.
William Connolley
Nov 10 2021 at 9:27am
Re the fat tails: you’re talking about a 2015 book as though it was state of the art; it isn’t; AR6 revised them down (see links in http://mustelid.blogspot.com/2021/09/book-review-climate-shlock.html). “All” that does is reduce the probability, of course, but it is weak evidence for Bryan’s argument that the book is overly pessimistic.
Others: I don’t think totally ignoring the possible failure modes of responses to GW, which is what the book does, is reasonable; you need a better response to Bryan there. And… if GW is to be a total disaster, then GeoEng must be considered a possible solution (http://mustelid.blogspot.com/2021/03/reflecting-sunlight.html) and the book’s effort to avoid it aren’t really plausible.
Daniel Reeves
Nov 10 2021 at 1:57pm
This is a valuable comment. I was really impressed with Wagner and Weitzman and trust them that that 10% was the best estimate as of 2015. And that’s great that it has gone down a bit!
Presumably the latest estimates are based on projected emissions which are based on how seriously we’re taking climate change. So maybe it’s not that the alarmism was a bit too pessimistic but that the alarmism is working (a bit)?
(This reminds me of a beautiful Scott Alexander post, “What Happened to 90s Environmentalism?“)
I also agree that the more dire the consequences of warming, the more seriously we have to take geoengineering. (See the “persuasive-sounding pitch” link in the post above.) Just that geoengineering without emissions reductions is still bad.
MikeW
Nov 10 2021 at 10:07am
And so, most climate activists are strongly against carbon capture.
TGGP
Nov 10 2021 at 10:45am
Could you provide support for that claim?
MikeW
Nov 10 2021 at 6:17pm
Sorry, that’s what I think I’ve seen, but I don’t know any links right off hand. Can anyone else point to a major climate/environmental organization that supports carbon-capture technologies?
MikeW
Nov 10 2021 at 6:20pm
Perhaps I should say that the possibility of carbon capture at scale is completely unproven, and unlikely to contribute much to emissions reduction over the next 10 years.
TGGP
Nov 10 2021 at 10:45am
You list a number of problems with geoengineering. But the more seriously one takes the prospect of a climate crisis, the more attractive the option seems even WITH its downsides.
Not really. Bryan is not starting with the conclusion that they’re wrong, then psychoanalyzing them for why they come to wrong conclusions. He’s saying their argument is terrible. They’re not actually going into why the expected scenario of unilateral geoengineering would be so bad.
J Mann
Nov 10 2021 at 10:50am
If we grant that geoengineering is likely to have substantial downsides, then I guess the questions are:
(a) what is the probability that carbon rationing/taxation/etc. will reduce those downsides and
(b) at what cost?
Daniel Reeves
Nov 10 2021 at 2:13pm
Very fair point (see also my reply to William Connolley just now).
As for my Bulverism imputation, there’s wiggle room but I mostly stand by it. At the very least, Bryan’s characterization of why Wagner and Weitzman oppose geoengineering was grossly uncharitable and unwarranted. Their discussion of rogue billionaires or whatever wasn’t part of their argument for why geoengineering is bad, just why it’s inevitable if we don’t reduce emissions. They devote many pages to why it’s actually bad (I don’t remember the details — there was a lot about ocean acidification?).
J Mann
Nov 10 2021 at 10:48am
There’s an interesting epistemic point here. Daniel interprets Bryan to be analyzing W&W through a variety of what are often called “logical fallacies” – W&W’s background suggests they might be biased, their decisions to ignore nuclear power and downplay geoengineering show they’re biased, etc.
As somebody said in the Slate Star Codex comment section ages ago, most logical fallacies are sound from a Bayesian perspective, but if Daniel’s characterization of Bryan is right, it does demand the question – what information *would* cause Bryan to change his mind? Only the opinion of a trusted source?
I can see the point – the math is complicated enough that I wouldn’t update appreciatively after reading something like Climate Shock – I’d look for secondary sources on each side, and then I’d try to judge those for plausibility and good faith.
Daniel Reeves
Nov 10 2021 at 2:21pm
Well said! I probably should’ve clarified that with Bryan before finalizing the bet. 🙁
But see my other replies about geoengineering. I don’t think it’s fair to say that the authors simply downplayed it. They argued at length about the badness of geoengineering without emissions reduction. I’m a little frustrated that Bryan seems to have missed that part of the book altogether.
J Mann
Nov 10 2021 at 10:56am
For what it’s worth, here are my thoughts on a revenue-neutral shift towards carbon taxation.
– My major concern is that I don’t trust legislators and regulators to make it revenue neutral. If there were really strong protections in the law to attempt to guarantee revenue neutrality, including some process of measurement and reporting, I’d feel somewhat better, but I suspect that like income and tobacco taxes, even if the first tax burden is reasonable, we would see future substantial increases, and those are unlikely to be neutral.
– Otherwise, I would support it mostly as a democratic compromise. You have to tax *something,* and a substantial portion of US citizens are concerned about carbon use, so why not that. Income and corporate taxes are actively harmful as is, so I doubt a carbon tax would be worse if it substituted for them. (If we had a more rational tax system, I might be more concerned about increasing inefficient incentives, but we don’t.)
Andrew_FL
Nov 10 2021 at 11:56am
I’m sorry, what?
Again, I’m sorry, what?
“non-alarmist” and “laissez faire” are words that have definite meanings, you can’t just redefine what they mean and declare victory!
Daniel Reeves
Nov 10 2021 at 2:38pm
To clarify, minimizing alarmism means not exaggerating the harms of climate change or the probability of a devastating outcome that everyone would agree has to be mitigated. Being as non-alarmist as possible may still mean sounding an alarm.
As for laissez faire, I guess I’m just saying that if we agree that there are externalities that have to be regulated (which maybe you don’t) then Pigouvian taxes are the least intrusive way to do that. Ie, maximally laissez faire subject to that constraint. (I guess I also just see it as fundamentally just, paying for the externalities one imposes. But I understand counterarguments along the lines of the fuzziness of what counts as externalities and how blame for them should be apportioned, like if your flamboyant clothing offends my sensibilities or something, that’s more a me problem.)
Jose Pablo
Nov 10 2021 at 4:30pm
Pigouvian taxes are pretty straightforward from a micro perspective, but you are failing to take into account what we know about Public Choice. And that is very relevant in the implementation of the tax. Given government/politicians set of incentives, there is no theory supporting the idea they can implement an efficient carbon tax.
And yes, externalities always come in pairs. You seem to downplay this fact, but it is all relevant. Carbon tax advocates try to impose an externality on people that value high standards of living more than global warming impact on the planet. You pretending this tax has not impact on their standard of living is akin to them defending that carbon emission has not impact on the planet.
I would suggest using Coase as a reference much more than Pigou. From Coase’s perspective the solution requires to things:
1.- a way of properly define whose property are the “CO2 emission rights”. An extremely difficult task (maybe unsurmountable). But, if possible (and I do have serious doubts) it would help to let the governments out of this (think blockchain).
2.- a way to reduce the transaction costs of this “rights”. Here we are good. We have lots of efficient, very low cost, notional and physical markets.
Don’t trust the people that say that a Pigouvian tax is “equivalent” to an “emission rights trading system”. They, sitting behind their desks, are forgetting that governments will be regulating the former and markets the latter. A huge difference as far are efficacy and efficiency are concerned.
AMT
Nov 12 2021 at 6:40pm
It must blow your mind that we already have empirical evidence of something you claim isn’t even theoretically possible.
https://www.canada.ca/en/environment-climate-change/services/climate-change/pricing-pollution-how-it-will-work.html
Jose Pablo
Nov 12 2021 at 7:59pm
Implementing a “national” carbon tax, is pretty easy. It shouldn’t blow up anybody’s mind. The European Union has even had a cap-and-trade system in place since 2005 (see the relevant CO2 emission rights hand out for free to their national heavy emitting industries, a cautionary tale).
Implementing a “global” carbon tax is several orders of magnitude more difficult. Same way that regulating national trade has nothing to do with implementing (and keeping in place) NAFTA.
An in any case, what Canada does or does not regarding this topic is totally irrelevant. Climate change folklore. Canada represents less than 2% of the global emissions. Reducing Canada’s emission to 0 is the equivalent of sending this problem back one year (and that being optimistic).
China, USA, India, Russia and Japan ARE this problem (60% of it).
Good luck coordinating the implementation of an international carbon tax among those countries. I think that China (or USA) opting out of the WTO is far more likely.
One forecast though: the complain that China, Russia and, even, India are gaming the system is not going to be part of any presidential campaign in the US. And sure thing too, every US presidential candidate is going to support America continuing to be part of the agreement while the coal mines in Pennsylvania close down.
But you are right, the Canadian system very clearly shows that implementing a global carbon tax is totally feasible.
Jose Pablo
Nov 13 2021 at 9:12am
AMT, Mankiw agree with my main point (so no need for your “orders of magnitude” more weight) and points out two very interesting examples: free trade and rent control, which show, as I claim, that: a solution that requires the intervention of governments as a rational agent is not going to work.
No matter how much economic sense a policy makes. Its implementation depends, crucially, on its “political” feasibility. A global CO2 tax is just not politically feasible (and a national one very difficult). If this is the only solution to climate change, we are doomed. Same way that if international free trade and market prices were the only “solution” to our economy and to house for rent availability, we would be doomed in those areas.
The People (as in We The People) don’t believe (and don’t vote) for prices as a mechanism to control demand (sorry about Pigou, but it just don’t work politically). This is very clear out there to read (if economist can take their noses out of their models). The last one in yesterday’s The Economist:
“Economists usually favour market-based interventions such as carbon taxes, (…) But ordinary Britons plainly disagree. Will Tanner of Onward suggests that is because they believe the cost of tackling global warming should be borne by society as a whole, and general taxation strikes them as a good way of achieving that. Blanket bans probably strike a nation inordinately fond of queuing as equitable, too.”
In Europe a recent increase in electricity prices due to the increase in gas prices has led to governments subsidizing electricity to avoid “energy poverty” (among other measures by avoiding the cost of emission rights to be use in the price formation of the generation market).
The “So, the rich can keep emitting as much as they want but ordinary people can not afford gas prices anymore” is just a political no go. And “China and Russia (35% of the problem) are cheating” another one.
To start a solution to global warming with “Imagine governments were rational then the best economical solution will be …” is akin to start saying “Imagine global warming is not a problem …”
AMT
Nov 13 2021 at 10:27am
If you think Mankiw agrees with your main point, you are functionally illiterate, and thus, pointless to discuss with you.
robc
Nov 10 2021 at 5:16pm
Pigovian taxes are, at best, a 3rd choice solution.
There may be other options I am missing, but I rank the 4 possible solutions to an externality as follows (pretend their are numbers, they will get eaten by the system):
Coasean Bargaining
Do nothing
Pigovian taxation
Regulation
The worst statists skip straight to number 4. Starting with pigovian taxation is only slightly less bad.
There is a good reason #1 doesn’t work with climate change, but I think #2 is the right answer — it covers geo-engineering. The government does nothing and lets Musk and Bezos solve the problem.
Jose Pablo
Nov 11 2021 at 9:16am
Robc,
I think that “de-regulation” could make it to the top of your list. By “de-regulation” I mean stop subsidizing fossil fuels.
Fossil fuels subsidies were close to $1.8 trillion in 2020. For a 34 billion CO2 t per year that’s equivalent to $53 per CO2 t, well above the consensus for a carbon tax.
file:///C:/Users/josep/Dropbox/My%20PC%20(DESKTOP-13LC2I2)/Downloads/wpiea2021236-print-pdf.pdf
[Considering only explicit subsidies, foregone consumption tax and congestion and road accidents]
… and made it “revenue neutral” which means nothing but sounds wonderful!
Max More
Nov 11 2021 at 11:06am
Your numbers for fossil fuel subsidies look dubious to me. Usually when these numbers are given, they include many things that are not in fact fossil fuel subsidies. For the USA, see:
https://andymaypetrophysicist.com/the-economist-fossil-fuel-subsidies-and-climate-disaster/
Jose Pablo
Nov 11 2021 at 11:16am
Max, the detail of the numbers is in the paper I linked.
It is a paper supporting a carbon tax and a local air pollution tax. I took the non-existing taxes out of their calculation.
Both taxes represent 71% of the headline figure the authors use: $5.9 trillion and growing.
And I agree with you, a proper figure is very difficult to work out, but in any case, a) it is huge and b) taking the subsidies out is a first step when trying to introduce a carbon tax. Otherwise, we are talking “government schizophrenic behavior”.
I don’t see the phasing out of the subsidies, so yes … we are talking, once again, “government schizophrenic behavior”. Like for so many years in Europe where governments were subsidizing (still are in many countries), at the same time, local coal and renewables.
robc
Nov 12 2021 at 5:02pm
Regulation being #4 means there is not much to deregulate as you rarely make it down that far.
But yeah, from our starting position, deregulation would be #0.
Andrew_FL
Nov 11 2021 at 12:38am
That is to say that what you mean by “non alarmist” is “correct in their risk assessment in my view” and by “laissez faire” you mean “not laissez faire, but as laissez faire as I am willing to tolerate since I heard of this climate change business”
Scott Sumner
Nov 10 2021 at 12:16pm
Great post. Revenue neutral carbon taxes are a low hanging fruit that we have foolishly declared impractical.
Daniel Reeves
Nov 10 2021 at 12:38pm
Amen to this! And thank you so much for the kind words!
Andrew_FL
Nov 10 2021 at 1:27pm
Sumner thinks government bureaucrats have special knowledge that lets them know the appropriate tax to levy on carbon, but don’t you dare call him pro central planning!
Jose Pablo
Nov 10 2021 at 3:17pm
“I’m a fan of revenue-neutral carbon taxes.”
A tax on emissions (revenue neutral or otherwise) is a terrible idea for two main reasons:
People (“The People”) don’t want it to be implemented.
Even if they wanted, it can’t be implemented
Reasons to believe 1 is true:
It has been voted done twice in the state of Washington. One in 2016 (this was revenue neutral) and once in 2018 (not revenue neutral this time … who cares?!)
When it was announced in France (without a vote, there has always been a difference between the two republics) people burned down the country opposing the tax until the government chicken out.
Are you (or the authors) defending the imposition of this tax without a voter’s “mandate”? Just because some “elite thinkers” believe they are “fan of it”?! That’s a terrible road!
Regarding 2:
It is a global tax without a fiscal authority. I don’t even know what it means from a conceptual, technical and enforceable perspective
What is going to be the “tax base”? We don’t even know how much we are emitting. The figures we use are “national declarations”. Actually, the emissions declared by country has been reducing for some time now (it seems that you don’t even need a tax, blaming is enough) but the rate of growth in CO2 concentration keeps raising … suspicious right?
Very likely the tax will change the CO2 we say we are emitting but no the CO2 we are really emitting. Maybe that’s fine since I think we are looking for the former, not the latter.
https://e360.yale.edu/features/paris-conundrum-how-to-know-how-much-carbon-is-being-emitted
The fact that the very same people that defends new taxes based on the difficulty of measuring “income”, advocate a tax that requires measuring “emissions”, is a very nice example of cognitive dissonance.
So, if I get it right, what the people defending this tax are looking for is that the same governments that are now subsidizing fossil fuels (in USA, Europe, Asia, Latin America … everywhere) to keep local employment, support rural communities and avoid drivers burning down countries, are going to change 180 and starting to oversee the levying of a tax that will force the closure of these very same facilities and will ignite the wrath of the voters. Sure thing.
And all this, based in the measurement of “something” impossible to properly track and that leaves no trace, while their voters complaint that in other countries (as reliable as China, Russia, India, Iran and Saudi Arabia) their governments are not applying the same standards and not forcing the closure of emitting industries.
Come on! …. The UK left the EU and USA “redefined” NAFTA for (imaginary) impacts way way less substancial than the one we are talking here.
And that is the best solution we have come up with?
We are so doomed.
VW
Nov 11 2021 at 3:12pm
Would be interesting of the two of you would do the opposite bet as well. I.e. Bryan picks a book, movie, podcast, interview or whatever by a skeptic and bets that Daniel has at least some new insight that changes part of his perspective.
I predict 2 things:
1) That Bryan will win that bet.
2) That those that are convinced of dangerous man-made climate change will oppose this bet.
Daniel Reeves
Nov 14 2021 at 2:14am
I’d be game! But Bryan doesn’t have such a source, does he?
Comments are closed.