A growing number of people see climate change as an example of the tragedy of the commons: the ‘over-grazing’ of collectively owned open lands by an unstructured group of people. The logic of individual self-interest will lead each and every individual to try to steal a march on the rest of the group before the rest over-exploit those open lands. In other words, individuals in a free market cannot be trusted to refrain from over-grazing common lands. The Earth’s atmosphere is the commons of the future. One of the earliest climate change activists, Nicholas Stern, has called global warming ‘the greatest market failure of all time’. By this he meant that free markets, left to their own devices, have failed and will continue to fail to control behaviour leading to a harmful and continuous increase in the temperature of the world’s atmosphere, oceans and continents. Present day public opinion subscribes to this black-and-white presentation of the problem of climate change and comes to the following conclusion: people who try to apply critical rationalism to climate alarmism must be condemned as unscientific ‘deniers’, who are helping bring about an immediate climate catastrophe.

We are being deafened by calls to change our ways, even at the cost of trillions of dollars and at the risk of gravely endangering our freedoms. The global warming programme is being sold with snake oil marketing techniques: after showing TV images of droughts, hurricanes, floods, and polar bears adrift at sea, the climate lobby claims that humanity is on the verge of extinction and that something dramatic should be done. It is video game science—we only need to press the United Nations key, send in the blue helmets, and save mankind from the wicked deniers.

I am no climate scientist. However, I believe that I have a say as a political economist about the arguments of the alarmists, despite the current denigration of anybody who dares criticise the political measures proposed to fight global warming and climate change. What I will do in this and the following article is analyse and debate the kind of interventions proposed and do so in the light of present-day economic theory of common goods.

We humans have indeed had and are still having an effect on the Earth’s climate. We need only look at forest clearing and the intense cultivation in 19th and 20th centuries in the United State leading to the Dust Bowl years of the 1930s; or today’s urbanisation of world population and the multiplication of the megalopolis in Asia and Latin America. But is present day global warming man-made, as a great number or even a majority of climate scientist say? As Colin Robinson (2008) puts it:

  • There is scientific evidence that, other things being equal, increasing emission of carbon dioxide and other greenhouse gases will bring rising world temperatures. In the absence of complete scientific knowledge, however, the list of the ‘other things’ and their effects is long but incomplete. (page 50)
“1) How prevalent are human actions in causing climate changes? 2) How reliably can the future course of the Earth’s climate be predicted? And 3), how large are the opportunity costs of the measures proposed by the interventionists?”

The following questions should be asked before we rush to impose solutions that may jeopardise our commercial and democratic way of life: 1) How prevalent are human actions in causing climate changes? 2) How reliably can the future course of the Earth’s climate be predicted? And 3), how large are the opportunity costs of the measures proposed by the interventionists?

In this first article of a series, I will start by trying to gauge the extent of the damage to our climate due to human action. I will then examine the alleged imminence of a climatic catastrophe. In the next piece, I will explore whether a spontaneous correction of impending climate tragedies is possible through the piecemeal innovations of the free market and the growth of cooperative solutions.

Climate Change Alarmism

What are the issues I see with climate alarmism? They fall into six general categories.

Sounding ecological false alarms. Russell Lewis (2008) critically compiles a long list of false alarms in recent history. One was Rachel Carson’s engagingly written Silent Spring (1962): she warned of the poisonous effects DDT was having on the environment and the food chain. She went as far as to say that DDT would cause “practically 100 per cent of human population to be wiped out from a cancer epidemic in one generation”—and this after the birds had all disappeared. Another scare was acid rain, a contamination of the atmosphere believed to be widespread but to which in the end the United Nations and the European Union attributed only a minimal part of the alleged forest damage—it was rather local pollution that was to blame. The case of the ozone depletion due to CFC emissions is a mixed one, to which I shall return. I find it especially interesting because the return of the ozone layer to its normal role as a shield against cosmic rays in a considerable degree has been a natural phenomenon; the other, because its correction may indicate the conditions for the success of large scale collective action.

See also “In Defense of Malthus, by Morgan Rose, Library of Economics and Liberty, September 2, 2002, and Thomas Robert Malthus, Concise Encyclopedia of Economics.

Committing Malthusian mistakes. These are predictions of resource catastrophes that have proved wrong. The original one, of course, is Thomas Malthus’ Essay on the principle of Population (1798), where he contrasted the capacity of population to grow geometrically, against an (at best) arithmetical growth rate for food, an evolution inevitably leading to vice, famine and war. He underrated the possibilities of agricultural productivity, which has allowed world population to reach seven billion, and the human capacity to control fertility, especially with the help of medical science. The result is that, despite still growing numbers, living standards have been rising since Malthus published his essay and that the rate of growth of world population is at last reducing.

Another example of Malthusian mistakes is that of Paul R. Ehrlich, who, together with his wife Anne, published a sensational book in 1968, titled The Population Bomb. They trumpeted that

  • [t]he battle to feed all of humanity is over. In the 1970s hundreds of millions of people will starve to death in spite of any crash programs embarked upon now. At this late
    date nothing can prevent a substantial increase in the world death rate. 1

Among other drastic measures, they proposed starving out countries that did not control population growth and fertility; and launching forced sterilisation programmes, as were applied by Indira and Sanjay Gandhi in India. Ehrlich is quite unrepentant of his failed predictions. “We didn’t make predictions, even though some idiots think we have.” 2 Another instance of his failed predictions was his wager against Julian L. Simon in September 1980. Ehrlich had famously said: “If I were a gambler, I would take even money that England will not exist in the year 2000”. Their disagreement boiled down to Simon to bet Ehrlich $10,000 that the real prices of five industrial metals (copper, chromium, nickel, tin, and tungsten, chosen by Ehrlich himself) would show no rise over the following ten years: they all fell. Ehrlich and his followers have now morphed into global warming prophets.

I need not go into the Club of Rome’s Limits to Growth (1972) and its catastrophic predictions. I need only say that Julian Simon was one of its first effective critics; and that the idea of this report was that population would by 2030 have grown to a peak followed by rapid decline due to the depletion of productive resources—a catastrophic framework still present today in climate prediction.

Ignoring the difficulty long-term climate prediction. Edward N. Lorenz, one of the founders of complexity analysis (and the formulator of the famous ‘butterfly effect’), has abundantly shown that climate predictive models soon turn chaotic, i.e. soon become noise (1996, 2006). Though we generally use models try to understand nature, climate change specialists find models difficult to specify, for, apart from the atmosphere, they have to take account of the Earth’s crust, and of the sea surface and deep currents. When trying to foresee the evolution of the weather and the climate with the help of those models, they need to measure the rate at which predicted states deviate from reality, so as to know the moment when the forecast becomes chaotic. This can only be induced ex post and for whole classes of predictions.3 Errors will compound arising from two kinds of circumstances: failing to determine the initial state of the meteorological phenomenon under study; 4 or mis-defining the laws that govern the phenomenon. In any case, the prediction of the evolution of regional weather is still in its infancy; and so is that of extreme weather incidents. And, as regards more mundane short-term predictions of the weather, Lorenz (tongue in cheek?) adds that “we may some day forecast a week in advance as well as we now forecast three days in advance, and two weeks as well as we now forecast one week ahead.” (page 57).5

Edward Lorenz also makes sobering remarks about the concept of ‘climate’. In the case of El Niño, the weather complex in South America, he notes:

  • To some climatologists, the climate changes when El Niño sets in. They posit that the climate changes again, possibly to what it had previously been, when El Niño subsides.” […] To others, the climate […] is something that often remains unchanged for decades or longer and is characterised by the appearance and disappearance of El Niño at rather irregular intervals, but generally every two to seven years. (page 55)

Imagine how easy it must be to predict the Earth’s climate thirty, fifty or a hundred years hence. The expression ‘climate change’ instead of ‘global warming’ is used to accommodate the fact that atmospheric temperature may get off the warming trend: it would not be the first time. Also, the connection between global warming and harsher hurricanes and other extreme incidents is less than clear.

For more on these topics, see the EconTalk podcast episode Bjorn Lomborg on the Costs and Benefits of Attacking Climate Change and Robert P. Murphy’s article “William Nordhaus versus the United Nations on Climate Change,” Library of Economics and Liberty, November 5, 2018.

Attributing global warming mostly to man-made or anthropogenic factors. In his book on what he calls the climate casino, William Nordhaus [Nobel Prize winner] includes a graph, Figure 1 below, indirectly illustrating the unknown forces that influence the climate. If we take the estimates of the temperature of the island of Greenland as an indication of the warming of the world, it seems that some 10,000 years before our time the climate suddenly became warmer and has stayed there.

Figure 1.- Global warming before the Industrial Revolution. Nordhaus (2013).

As Nordhaus notes, this period is that of the socialisation of homo sapiens and the emergence of our cultures. Most of the warmer period that came after the end of the glaciations was free from industrialisation and man-made warming. Young and Steffen (2009) give some detail of what this warm tail has meant for humanity.

Figure 2.- Homo sapiens flourished in warmer weather.6

Failing to give natural factors their due weight. This leads me to stress that climate models cannot be confined to the connection between human activity and increases of atmospheric temperature: they should be multivariate models, where the main ’causes’ of climate change are non-human: the first, the sun and its spots, since their non-occurrence coincides with cooling periods. Secondly, Earth’s orbital variations influence annual insolation, which is a likely explanation of the warm period in the early Holocene. Neither can humanity be blamed for volcanic eruptions, earthquakes, tsunamis or meteorites. Other non-anthropogenic causes are wind driven surface currents, such as the Gulf Stream; and, at a greater depth, currents driven by differences in temperature and salinity; these deep currents eventually sink into sea water wells in the North Atlantic and the Southern Ocean, with transit times of around 1,000 years. I have already mentioned the rough regularity of the Trade Winds around the Equator in the Atlantic and Pacific Oceans. The conclusion is that natural causes also play a big role in climate change.

The debate on whether increases in temperature in the last years of the 20th century and the beginning of the 21st are anthropogenic or due to natural causes is heating up, because the IPCC 3rd Reports of 2001 and later take it as given that the increases are man-made. The source of this position is to be found in the various versions of a paper by Mann et al. (1998). The opposition is led by McIntyre and McKritic (2003). It is poetic that the discussion should have centred around a metaphor, the representation of world climate as a “hockey stick”. The idea proposed is that temperatures of the Northern Hemisphere were appreciably stable during the 1,000 years up to the year 2000 (the handle of the hockey stick) and have suddenly shot up in the present period (the blade of the hockey stick). This metaphor was broadcast to the world courtesy of Al Gore in 2007: “Our civilization has never experienced any environmental shift remotely similar to this.”

Figure 3.- The Mann-Bradley-Hughes hockey stick7

Figure 3 shows ‘temperature anomaly’ since year 1000. This means departure from the mean temperature of the current millennium. The light blue area shows the confidence margin of the indirect (or proxy) calculation of temperatures of remote times. Proxies are ice-cores, tree-rings, northern tree-line, pollen, insects and so on.

The question has now become the following: were temperatures appreciably stable and cool during the millennium before the 21st century? Or did sharp ups and downs happen during that long period making the ‘handle’ rather unserviceable? If the latter, then the alarm at the averred present sharp increase in temperature (the ‘blade’) could turn out to be exaggerated for we would be observing only a temporary upward movement in a natural cycle.

Let us turn to lo the ‘handle’. McIntyre and Mckritik (2003) hold it that the temperature pattern from year 1000 to 1950 looks too jagged to fit the metaphor.

Figure 4.- McIntyre and McKritik (2003) throw doubt on the ‘Hockey Stick’ handle.8

It is generally agreed that there seems to be a connection between the frequency of observed sunspots and earth warming and cooling. Cold periods usually correspond with a low number of sunspots. For instance, the so called ‘Maunder’ period of very low sunspot frequency from 1600 to 1760 coincides with the deepest part of the ‘Little Ice-Age’.

Figure 5.- Solar irradiance inversely related to sun-spot frequency.
McIntyre and McKritik (2003)

Though I cannot adjudge on the scientific debate, as an economic historian I can assert that the 17th century was indeed a time of very cold and rainy weather. In 1763 the Thames froze. Crops failed repeatedly all over Europe. In Spain it was a century of poor crops and repeated plagues, starting with the 1598 epidemic that ended the relative prosperity of Philip II reign. The Black Death had also come in 1346-53 at the end of the medieval warm period, when unusual cold pushed the black rats to spread in search of sustenance and their fleas invaded humans weakened by hunger. So much for the hockey stick hypothesis.

The possible influence of natural causes on the climate has lately been used to explain the observation that during the first ten years of the 21st century the increase in temperature turned out to be lower than predicted by climate models. We have been going through a period of very low sunspots, similar to the period of the Maunders reduction of solar activity coincidental with the Little Ice Age. The surmise is that we now are in another such period and that we are not fully experiencing its effects at present thanks to the production of Green House Gases. Mild cooling could turn to excess due to natural causes. The future of our planet principally would then depend on the Little Age not turning into a full glaciation.

Nordhaus’s tipping points. A crucial question in this disputation is whether we face a gradual effect of atmospheric warming or are at the edge of a no-return abyss. The rhetoric of extreme interventionists such as Greta Thunberg is that of the high probability of an impending catastrophe. Such is the Declaration of Climate Emergency by the European Parliament.

The scientific attitude should be quite different. The evidence and explanatory models of the scientific community may indicate upward trends (temperature, gas concentrations, sea levels). However, there seems no base for the prediction of violent and irreversible disruptions triggered by some supposed threshold.

In my next article, I will turn to the economic science of collective action, in search of appropriate responses to the climate ‘crisis’ with which we seem to be faced.


[1] Ehrlich, Paul, and Ehrlich, Anne H. (2009): “The Population Bomb Revisited”. The Electronic Journal of Sustainable Development, 1(3).

[2] Grist Magazine, August 13, 2004.

[3] In fact, the usefulness of the models for each case is measured by the doubling of the initial error, known as the Lyapunov exponent.

[4] Exact knowledge of initial conditions may in some special cases not be too important: this is the case of oceanic tides, for which predictions can be made precise by using established relations between tides and independently known motions of the sun, earth and moon. Equally, in the case of El Niño known periodicities allow us to formulate macro-predictions, such that the phenomenon will appear every two to seven years; thus also, the quasi biennial oscillation (QBO) of trade winds in the midlevel stratosphere near the Equator.

[5] William Kininmonth, the Australian meteorologist (2004), points out that climate warming alarmists tend to concentrate on the vertical temperature structure of the atmosphere and hence on warmth retention on Earth; and too little on the horizontal energy transfer between the tropics and the arctic zones of our planet. In his view the efforts of climatologists should make good the neglect of regional weather phenomena and concentrate on better forestalling and resisting meteorological and climatological phenomena that are recurrent and natural. He also foresees a cooler climate in this coming twenty or thirty-year period due to changes in solar activity, to wit, the sunspot cycle, solar insolation, and the inclination of the Earth’s axis. In fact, the temperature rise in the first ten years of this century has been slower than the IPCC predicted by looking only at greenhouse gasses because natural factors such as La Niña and less sun the small drop in sunlight reaching the Earth as part of the natural solar cycle.

[6] Young, O. R., and W. Steffen. 2009. “The Earth system: sustaining planetary life-support systems”; Figure 1. In F. S. Chapin, III, G. P. Kofinas, and C. Folke, editors. Principles of ecosystem stewardship: resilience-based natural resource management in a changing world. Springer, New York.

[7] Mann, Michael E.; Bradley, Raymond S.; Hughes, Malcolm K. (1999), “Northern hemisphere temperatures during the past millennium: Inferences, uncertainties, and limitations” (PDF), Geophysical Research Letters, 26 (6): 759-762.

[8] McIntyre, S., and McKitrick, R. ( 2005), “Hockey sticks, principal components, and spurious significance”, Geophys. Res. Lett., 32, L03710, doi:10.1029/2004GL021750.

* This a much revised and expanded paper originally read at the ECAEF Meeting of December 10th and 11th 2019 in Montecarlo. Thanks are due to Kurt Leube, the organiser of the meeting; and to Ana Schwartz and Juan Luis Valderrábano for welcome help when dealing with this fraught question.

Pedro Schwartz is “Rafael del Pino” Research Professor of economics at Universidad Camilo José in Madrid. A member of the Royal Academy of Moral and Political Sciences in Madrid, he is a frequent contributor to the European media on the current financial and social scene. He was a past President of the Mont Pelerin Society.

For more articles by Pedro Schwartz, see the Archive.

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