See the cost to America from climate change in the 21st century

Summary: Another peer-reviewed paper predicting disaster from climate change by misrepresenting and exaggerating the science. We can still learn much from it.

“Estimating economic damage from climate change in the United States“

By Solomon Hsiang et al in Science, 3 June 2017.

“Estimates of climate change damage are central to the design of climate policies. Here, we develop a flexible architecture for computing damages that integrates climate science, econometric analyses, and process models. We use this approach to construct spatially explicit, probabilistic, and empirically derived estimates of economic damage in the United States from climate change.

We start with the abstract, dry language for bombshell conclusions. Then we examine the assumptions and conclusions that mainstream journalists gloss over.

“The combined value of market and nonmarket damage across analyzed sectors — agriculture, crime, coastal storms, energy, human mortality, and labor — increases quadratically in global mean temperature, costing roughly 1.2% of gross domestic product per +1°C on average. Importantly, risk is distributed unequally across locations, generating a large transfer of value northward and westward that increases economic inequality. By the late 21st century, the poorest third of counties are projected to experience damages between 2 and 20% of county income (90% chance) under business-as-usual emissions (Representative Concentration Pathway 8.5).”

The press coverage was enthusiastic, even fawning. Reading closely brings out some odd aspects of the reporting. For example, Seth Borenstein’s AP story gave a quote demonstrating a rule about climate change stories: omitted factors can only make the effect of warming worse, never less. This is a subset of the master narrative for news articles about climate change: its effects are only bad. Good effects, such improved plant activity from fertilization by higher CO2 levels, must be ignored.

“Pennsylvania State University climate scientist Michael Mann called it ‘a fascinating and ambitious study.’ But because many extreme weather factors weren’t or can’t yet be calculated, he said the study ‘can at best only provide a very lower limit on the extent of damages likely to result from projected climate changes.'”

Another rule in the master narrative: the only true experts are those writing about extreme adverse effects of warming. No matter how eminent, anyone speaking otherwise is bogus.

“For a quarter century, economists have made (lame) assumptions on climate damages. The adults have entered the room.”
— Tweet by Gernot Wagner, economist at Harvard and the Environmental Defense Fund (bio here).

But the more interesting aspects of the paper are its description of RCP8.5 as a “business as usual” scenario — and the reactions of some scientists to its methodology and conclusions.

The big lie

This is another in the long series of papers I’ve documented that are Manufacturing climate nightmares: misusing science to create horrific predictions. What a disgrace that statements like these in this paper survive peer review in a major journal (red emphasis added).

“…business-as-usual emissions (Representative Concentration Pathway 8.5).”

“Figure 2 and fig. S2 display the median average impact during the period 2080 to 2099 due to climate changes in RCP8.5, a trajectory consistent with fossil-fuel–intensive economic growth, for each county.”

The latter statement is scientific-sounding nonsense. The RCP8.5 scenario is also consistent with our sun going nova. That is not a useful description of the worst-case scenario given in AR5.

The description of RCP8.5 as “business as usual” is a common misrepresentation. RCP8.5. is the worst-case of the four scenarios used in the IPCC’s AR5 report. Neither AR5 nor the paper describing RCP8.5 call it a “business as usual” scenario, because it is not (correction: Riahi 2011 calls it a “conservative business as usual case”). Such a scenario would assume continuation of existing trends through 2100. A worst-case scenario assumes trends change for the worse. RCP8.5 assumes population growth at the 90th percentile of the probability forecast for 2100 (i.e., not considering real-world factors) and near-stagnation of technological progress.

• The almost universal trend of falling fertility with development makes the former unlikely. People assumed that a fundamentalist Islamic theocracy would keep Iran’s fertility high. It was 7 in 1960 and still 6.5 in 1982. By 2014 it had fallen to 1.7 — below replacement level.
• The irresistible tide of technological progress makes the latter unlikely. In RCP8.5 coal is the fuel of the late 21st century. The major car companies are rolling out mass production of electric cars. Solar is cheaper than coal in India. “Grid parity” is the key, when the cost of new solar or wind generations equals that of fossil fuels. According to the World Economic Forum “more than 30 countries have already reached grid parity without subsidies, and around two-thirds of the world should reach grid parity in the next couple of years.”

See this for more about the unlikely RCP8.5 scenario. See this for the long history of misrepresenting RCP8.5.

Some scientists look at the paper

Richard Tol, professor of economics at U Sussex, gave a brief critique of the paper to the Daily Caller.

“There are two problems with this paper,” Tol told the Daily Caller News Foundation. … “First, except for energy demand, these are impacts of weather variability rather than climate change,” Tol said. “The key difference is that weather shocks are unexpected, but climate change is not.” “People would therefore adjust their behavior in response to climate change but not in response to weather shocks,” Tol said. …A hurricane can form and hit land relatively quickly, and will happen regardless of whether or not there’s man-made warming. Climate change would be slow relative to the pace of the economy. If the climate continues unabated warming from now through 2099, people would, for example, plant different crops, Tol said. …

“Second, they study the effect of future climate change on the economy of the recent past,” Tol said. “They find that the currently poor are more vulnerable, but the currently poor would be lot richer in the future when climate change hits them.”

“And of course we have an economics paper published in a non-economics journal.”

Marshall Burke (asst prof of earth system science at Stanford) provided some context for the paper’s findings to Axios:

“Poor counties in the U.S. will be harder hit, mainly because they are already hot. Whether we should think of climate change as a ‘transfer’ of wealth is less clear to me, though, and it is also less clear that even if we want to use ‘transfer’ in the way they are using it, that this would be the biggest transfer in U.S. history. For instance, I think it’s correct that the differential growth in incomes between the poorest 20% of U.S. household and the richest 1% has been a lot bigger over the last 20 years than the effects they find here.”

Roger Pielke Jr. (environmental studies program, U CO-Boulder) provided this comment to Seth Borenstein of the AP (who, of course, quoted only those making alarming statements).

“I point you to this paper’s bottom line conclusion (which is similar to Stern’s): “Our market estimates are for a 1.0 to 3.0% loss of annual national average GDP under RCP8.5 at the end of the century.” US GDP in 2015 was ~$18 trillion. In 2100 at 2% annual GDP growth it will be ~$97 trillion. Under the scenario presented in this paper it will be $94 trillion.

“Thus, this paper confirms what past studies have already told us – climate change is real and, under various assumptions for how the future will play out, may indeed have meaningful economic impacts.  On the one hand, 3% of 2100 GDP is a big number, on the other hand under this same scenario, GDP is still expected to increase by >500%.

“As the paper notes correctly, future climate impacts will take place in a world where we have many choices in how to mitigate and how to adapt, which can make the future better or worse. Those decisions matter. Studies like this should tell us clearly that uncertain projections of distant damage are unlikely to be a strong motivation for policy change today. The costs and benefits of climate policy need to become aligned on timescales of politics, not centuries. We should stop trying to use apocalyptic scenarios to scare people – the science doesn’t support it and it doesn’t work anyway.”

Roger Pielke Sr. (bio) repeatedly points to the elephant in the room about these papers — the ignored assumption that climate models’ predictions about global climate (when fed accurate predictions about emissions) are a sufficiently skillful basis for public policy — and that downscaling these models produces regional forecasts also useful for making public policy. There is little evidence of either. See here for a discussion of the literature about model validation (see the end section here for links to the literature). He says there is even less evidence for their skill at regional levels. He reviewed the literature validating regional downsizing five years ago, and relatively little progress has been made since then.

Matthew E. Kahn, Professor of Economics at USC, writes about this paper’s methodological weakness in “Climate Change Adaptation Economics Must Confront the Lucas Critique.” This brief excerpt describes but can not explain his analysis. Links to Wikipedia added.

“{The authors} predict future economic outcomes under the assumption that the historical correlation between weather and economic outcomes persists into the future. This bold writing violates the Lucas Critique. Robert Lucas is one of the University of Chicago’s greatest economists. I was not one of his greatest students but I learned from him that as the “Rules of the Game” change that forward looking decision makers re-optimize.  He studied this issue in the context of government counter-cyclical macro policy (i.e tax cuts during recessions) but the same point applies in the case of climate change. …

“As these changes takes place {adaption and mitigation}, the historical correlations between climate and economic losses are attenuated.  This is why I don’t have much confidence in the predictions reported in the new Science Paper. …”

Conclusions

“We don’t even plan for the past.”
— Steven Mosher (member of Berkeley Earth; bio here), a comment posted at Climate Etc.

Anthropogenic climate change is real and a serious problem. But the campaign to warn the public has been incompetently done, failing to provide the transparency and level of evidence proportional to the magnitude of the solutions proposed (details here). This paper adds to two decades of examples. The politicization of science has helped neither the processes of science or politics. The result has left America vulnerable to even the inevitable repeat of past weather, let alone future climate change.

But it is not too late to restart the debate. We can end the climate policy wars: demand a test of the models!

For More Information

If you liked this post, like us on Facebook and follow us on Twitter. For more information about this vital issue see the posts about the RCPs, about the keys to understanding climate change and these posts about the politics of climate change…

1. Important: climate scientists can restart the climate change debate – & win.
2. We can end the climate policy wars: demand a test of the models.
3. About RCP8.5: Is our certain fate a coal-burning climate apocalypse? No!
4. Manufacturing climate nightmares: misusing science to create horrific predictions.
5. Ignoring science to convince the public that we’re doomed by climate change.
6. Stratfor gives us good news, showing when renewables will replace fossil fuels.
7. Good news for the New Year! Salon explains that the global climate emergency is over.

To learn more about the state of climate change…

… see The Rightful Place of Science: Disasters and Climate Change by Roger Pielke Jr. (Prof of Environmental Studies at U of CO-Boulder). From the publisher…

“In recent years the media, politicians, and activists have popularized the notion that climate change has made disasters worse. But what does the science actually say? Roger Pielke, Jr. takes a close look at the work of the Intergovernmental Panel on Climate Change, the underlying scientific research, and the data to give you the latest science on disasters and climate change. What he finds may surprise you and raise questions about the role of science in political debates.”