Uncertainty of climate change underscores the need to act
A 1.5 degree change or more in the climate could have unforeseeable implications for the world
It is a measure of how long we’ve been aware of the issue of climate change, that the first experts in it are passing from the scene. Wally Broecker, an eminent American geophysicist and one of the earliest to point to the dangers, died in February aged 87. On Tuesday, Martin Weitzman, a pioneer of climate economics, passed away suddenly at the age of 77.
Professor Weitzman made at least four seminal contributions. Firstly, he demonstrated that the discount rate – effectively, the interest rate we use to value future benefits and costs in the present day – should be very low for the extremely long term (a hundred years or more).
This does not matter much for most practical matters – but for climate change, where effects such as the melting of the Antarctic will play out over centuries, it is essential. Usual practice, even now, adopts a discount rate of a few per cent per year. This means that we essentially assume our descendants of 2100 or 2200 will have benefited from our investments to devise some clever technological fix to cope with 60 metres of sea-level rise. Or, the luxuries developed in that period will sufficiently compensate them for the inconvenience.
Second, he addressed the choice of how to restrict pollution, such as carbon dioxide. Do we set an absolute limit on amounts of emissions, and allow companies to trade allowances, as the US did for sulphur dioxide to reduce acid rain in 1990? Or do we charge a tax per tonne of pollutant? Professor Weitzman showed that when we are highly uncertain about the damage caused, we should limit quantities.
Third, he originated the concept of “green GDP” – that we should include the negative impact of pollution in the way we assess an economy.
His fourth contribution is the most urgent today, and events remind us of its reality. The Amazon and Congo are being ravaged by fires, raising fears that tropical forests could dry out and die back abruptly, releasing vast quantities of carbon dioxide and so worsening climate change. In June and July, extensive fires ravaged the Arctic areas of Siberia, Alaska and even Greenland. As black soot from those fires settles on snow and ice, it absorbs the sun’s rays and speeds the already rapid warming and melting of the far north.
Professor Weitzman observed that standard economic analysis of climate change concentrated far too much on the “most likely” outcomes, an approach taken by William Nordhaus, who won last year’s Nobel Memorial Prize for economics.
Instead, Weitzman pointed out that we are vastly uncertain about the effects of climate change, and the more extreme outcomes are the ones we should worry about most.
We do not know precisely how much the planet will warm in response to a certain amount of emissions. The Paris Agreement of 2015 set a target of avoiding global warming of more than 1.5 degrees Celsius, and climate computer models then relate that to a given quantity of greenhouse gas emissions. But feedback loops, such as the release of carbon dioxide and methane from melting Arctic permafrost, mean that even if we achieve the very stringent greenhouse gas cuts required, there is a significant, even if small, chance that warming from that amount of emissions could be much higher than 1.5 degrees.
Then, we do not know how much economic damage will be caused by warming of a certain amount. Traditional analysis of the costs of climate change assumes the world economy (and by extension, its political system) will remain quite similar to today’s.
In reality, we might make plausible estimates of the effect of 1.5 or 2 degrees warming, based on past experience, but that level on a global scale is outside anything our species has seen. About 125,000 years ago, temperatures were 1 to 2 degrees higher than today – and the sea-level was 5 to 8 metres higher, which would drown most of the low-lying Gulf cities, the Nile Delta, Florida, New York, the Netherlands and Bangladesh.
And for calculating the costs of 4 degrees or more of warming, we would be flying entirely blind. What can we sensibly say about the loss of the Amazon or the South Asian monsoon, huge wildfires, the flooding of vast areas, disruption of oceanic circulation, decimation of major food crops, a global pandemic, the collapse of world trade, waves of hundreds of millions of climate refugees, major countries going eco-authoritarian or neo-fascist, a world war over climate, a complete breakdown of ecosystems?
Weitzman compared the situation to buying insurance. Most houses do not burn down, and we install sprinklers and fire alarms, but still we take out fire insurance, to avoid the small chance of a catastrophic loss. Spending heavily on cutting emissions sharply now, holding politicians and corporations accountable for climate action, reimagining global frameworks of trade and migration, removing carbon dioxide from the atmosphere, and even geoengineering to cool the planet, appear sensible precautions in this light.
His argument is important because it undercuts the reasons for delay advanced by many who are opposed to strong climate action, for reasons of genuine intellectual conviction, ideology or self-interest. They maintain that, because the magnitude of climate change and its effects are uncertain, we should not invest heavily today to reduce emissions, but instead wait and learn. Weitzman showed that the uncertainties are precisely the reason to act decisively now.
Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis
Published: September 1, 2019 10:41 AM