Just how often are we told that disaster awaits us unless we do something about global warming? Like many people, I suspect, there have been so many predictions of doom that I no longer absorb any of the detail. Is the future apocalypse announced on tonight’s news the same one as on the morning news, or is it a new one? They all the seem the same unless you pay close attention.
For the next month, I plan to keep track of global warming disaster stories in the Australian media. I am not going to count every report (that would take too long), but I want to link to as many of the separate stories as I can. I think this might be interesting as part of my series of posts on the politics of global warming. My hunch is that scaring people into action is no longer an effective strategy; it has people convinced that things need to change, but not that they personally should do much about it.
The list:
13 November
1. Tasmanian researchers warn that many plant species are on the verge of disappearing. “UTAS researcher Dr Mark Hovenden says it’s a compelling case for reducing greenhouse emissions.”
2. Global temperatures to rise by 6 degrees unless radical changes adopted, says International Energy Agency.
3. A recycling of an old report, but in today’s Australian:
UN’s Nobel-winning Intergovernmental Panel on Climate Change said greenhouse-gas emissions were already inflicting visible changes to the climate system, especially on ice and snow. Left unchecked, climate change could inflict widespread drought and flooding by the end of the century, translating into hunger, homelessness and other stresses for millions of people.
15 November
4. Sydney protestors demand action: Ms Hunt said urgent action was needed. “Looming on the horizon is the destruction of my future,” she said. And in the Perth version of the same protest: ‘”Cottesloe, one of Perth’s most popular beaches, will be lost to rising sea levels if we fail to take urgent action to prevent global warming,” Ms Hofmeester said.’
18 November
5. A matter-of-fact tone, but dire warnings of what will happen to infrastructure: “Over the next 20 to 30 years extreme weather events are likely to overwhelm infrastructure constructed to current design standards. Buildings, roads, railways, ports and airports, bridges and tunnels will all experience increased pressure and require repair, maintenance and upgrading works.”
19 November
6. Clown not amused by denialists: Q . Is there anything you don’t find funny when it comes to the state of the planet? A. Yes. Inaction. Particularly by people who should know better: politicians and the heads of big businesses. Also, there are still people who attempt to argue climate change hasn’t begun.
20 November
7. Brisbane storms sign of things to come with a changing climate.
8. A kit for environmental protestors suggests staging of a mock funeral for the Great Barrier Reef. ”Black clothing, veils, flowers and elaborate pantomime can communicate this tragedy,” the kit says. ‘
21 November
9. Another borderline case for its matter-of-fact tone, with insurers promising higher premiums to deal with climate change.
22 November
10. PM tells CEOs that all nations – developed and developing – to work together on climate change, warning to do otherwise could have catastrophic consequences. “Action by all major emitters is required to avert dangerous impacts of climate change,” Mr Rudd said.
23 November
11. Total disaster awaits: “Depending on the severity of climate change, the consequences for national security in affected countries could include population displacement, civil unrest, ethnic violence, food riots, conflicts over water and the collapse of state institutions.”
12. Hippies to attend workshop on “Responding to the Planetary Emergency”.
24 November
13. Seed bank to preserve plants threatened by climate change; with areas where some plants can grow already reduced.
14. The water supply of a billion people in South Asia at risk due to climate change.
25 November
15. If humankind continues with its dirty energy habits then we will fry the globe, preaches a speaker to the converted at a clean energy conference.
26 November
16. Borderline case for lack of hyperbolic tone, but climate change already killing off Great Barrier Reef.
28 November
17. Neutral tone again, but melting icebergs to raise sea levels.
18. Coal industry costs $700 billion a year through climate change.
29 November
19. International climate change negotiations have high stakes: With rare exceptions, studies say climate change is happening and its eventual impact may be worse than thought, inflicting droughts, floods, loss of snow and ice, more brutal storms and rising sea levels.”
20. Another fairly matter-of-fact tone, but Maldives to disappear under water due to climate change.
1 December
21. Labor not doing enough according to Greepeace; Australia risks again becoming a ‘rogue state’ on climate change.
22. High stakes for Poznan meeting, with ‘cataclysmic’ climate change on its way.
23. Maybe we are ruined no matter what we do: ‘studies, they say, indicate that human activity may be triggering powerful natural forces that would be nearly impossible to reverse and that could push temperatures up even further. At the top of the list for virtually all of the scientists canvassed was the rapid melting of the Arctic ice cap.’
24. And more on the above uber-apocalypse: ‘carbon dioxide emitted from today’s homes, cars and factories will continue to heat up the planet for hundreds of thousands of years.’
2 December
25. War, hunger, poverty and sickness will stalk humanity if the world fails to tackle climate change, a 12-day UN conference on global warming heard.
26. Not one, but two apocalypses, according to Phillip Adams.
27. Worsening scientific predictions mean that a 50% cut in emissions by 2050 may not be enough.
28. Venice threatened by climate change.
3 December
29. Possums disappearing due to climate change.
4 December
30. ‘Materialistic’ Victorians at mercy of climate change.
5 December
31. North Queensland ‘ground zero’ for climate change. ‘Its rainforest is dying, some animal species are on the brink of extinction, and mass coral bleaching events kill entire marine ecosystems.’
32. Sydney to have more bushfires due to climate change.
33. Half the world to have water shortages by 2050.
6 December
34. Climate change an ever-growing threat to public health.
7 December
35. Military planning for social breakdown caused by climate change.
36. Climate change hail storms to wreck Sydney roofs.
9 December
37. Member of Plane Stupid group, which blocks airport runways to protest against climate change, says “Being arrested is a terrifying prospect, but not nearly as terrifying as the threat of climate change.”
38. Planet risks becoming uninhabitable.
10 December
39. 35% of world’s coral reefs under threat from global warming.
40. Human right to good weather threatened; disasters to follow.
41. Small island states to disappear under water.
42. Flooded due to climate change? Take a legal class action against carbon emitters. But aren’t we all guilty of high carbon use?
43. World committing suicide, according to Tim Flannery.
44. Could planning authorities be sued for permitting buildings in low-lying areas? Not if they ban such buildings.
11 December
45. It’s even worse than you thought.
12 December
46. ‘Horrendous’ consequences await if we don’t do enough to stop climate change.
47. Expanding deserts to add to human misery.
Andrew Norton 
One of the most dangerous consequences of the global warming episode will be a blow to the credibility of science and scientists. Of course it was naive and dangerous for people to be to much in awe of scientists but the reverse is likely to happen if it turns out that the alarm about global warming is itself hot air. People have been told over and over that the scientific debate is settled, the CSIRO says so, the Australian of the Year said so, this and that International Committee Say so, the Nobel Prize committee said so, both the major parties agree, etc etc. Where are people supposed to turn for disinterested advice on matters scientific if this turns out to be wrong?
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What an incontrovertibly stupid remark Rafe and (with respect to your normal good sense) what a silly post Andrew.
3 degrees C climate change is a likely outcome even with strong policies to control GGEs. This is scary according to the best scientific advice being produced. Losing Kakadu, much of the Barrier Reef, the Victorian Alps and most irrigated agriculture in the Murray Darling is the best we can guess at. Yes it might not be an outcome but it is the best information science delivers.
The issue is whether or not we are acting on the best available science at the moment, not whether with 1% probability we might be wrong.
Rafe why don’t you get off your butt and start reading some of the literature on climate change. The Garnaut Review or the Stern Review are a good start. Don’t just be dismissive on the basis of your total lack of any sort of knowledge of climate change issues. You can’t just adopt the posture of a dumb-assed conservative who offers dismissive views because he is too lazy to read and to try to understand. That’s not presenting a view – its is just fogging up perceptions.
Andrew please just stop reading the asinine pseudo-science in Quadrant. These guys have an agenda and it is not an intelligent or responsible one. I have read Quadrant with interest for 20 years but they are losing all credibility with this nonsense.
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I’m 100% with HC on that. I might also point out that:
“Of course it was naive and dangerous for people to be to much in awe of scientists but the reverse is likely to happen if it turns out that the alarm about global warming is itself hot air.”
This is really a no-win situation for science. If a low probability event occurs, then due to people’s poor understanding of complex systems, it will mean that the people who get it wrong will get blamed. Alternatively, if science gets it right, then the ignorant will still just look ignorant, and will be forgotten quickly. I might point out that the simple alternative here is that all the science people in the world simply shut-up and don’t say or do anything on controversial issues (as of course happens in places like China, Singapore and probably parts of the CSIRO where people get bullied into submission), until it’s so blatently obvious its too late. I’m sure lots of governments would love that. Either that, or we could be in awe of our sports people, and ask them their opinion instead. What did Shane Warne think about global warming?
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HC – There was no comment at all in my post on whether all these reports were right or not; it is their frequency rather than their content than I am looking at.
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Perhaps you didn’t say it outright Andrew but your first paragraph has a sarcastic tone and when I read it I assumed you were mocking the notion of global warming.
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These guys are way ahead of you.
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Stephen – Indeed they are!
Ken – My position is:
* against the denialists, almost no policy is made on certain information, and in the face of plausible people predict catastrophic consequences no prudent government can do nothing
* against the alarmists, the excessive vigilance in denouncing the denialists, who have very little public support, is unhealthy
But I don’t plan on writing about either the science or the policies to reduce climate change in any detail, because there are plenty of other people who can do a much better job than I would.
I do however have longstanding interests in public opinion, the media, and how radical reforms are managed politically. So I will write about these aspects of the issue.
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Why not something similar on cancer? There certainly are alarmist stories about various things putatively causing cancer and there is a substantial body of opinion (faith healers, tobacco lobbyists and so on) to say that all such claims are overblown.
As I view your classification strategy, any story suggesting that the risk of cancer is real and that people or governments should take precautions against it gets counted as “alarmist” while the writings of say Milloy and Brignell (the Numberwatch guy that Stephen Kirchner links to) could be classed as “denialist”.
To spell out my point the difficulty is that, given the existence of real problems that are the subject of serious study, your approach classes any reporting of such study as “alarmist”, creating a spurious symmetry with the kind of propaganda/crankism dished out by the Milloys and Bolts.
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Actually, the cancer/other health material is highly relevant to the point that interests me, which is the link between predictions of negative consequences and personal behaviour. Predictions of dire health consequences from smoking/drinking/over-eating/lack of exercise etc have had an effect on overall smoking rates, but young people continue to take it up, and little apparent effect on obesity.
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Who do you think you are kidding Andrew? What you are doing is giving a nod and a wink to the denialists while at the same time trying to maintain your respectability by appearing to distance yourself from their pseudo-science, or outright anti-intellectualism.
As for you, Rafe, unlike Andrew, you at least have some science background, so you have no excuse for not reading the scientific papers, other than fear that they might say something that contradicts your ideology. Heaven forbid.
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Spiros – I have not studied science formally since secondary school. Reading New Scientist is as deep as I get.
I do object to the pressure to conform coming from the ‘alarmist’ camp, on good Millian grounds that this kind of behaviour creates a bad intellectual environment. As a few of the comments on this post demonstrate, that conformist pressure extends even to people trying to discuss related but distinct issues.
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Andrew, if you don’t want to feel the pressure to conform, start reading the scientific literature and form your own judgments. Harry does, and he probably hasn’t formally studied science since secondary school either.
You need a degree in physics or chemistry or related disciplines to do climate science research. But you don’t need a science degree to form a view as to whether the conclusions from a scientist’s research is backed by evidence and logic.
And, really, the fact that some people are attributing all sorts of things to climate change is just a straw man. What matters is the opinions of the most informed people on the subject, not the average opinion of anybody and everybody who says something.
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It`s a sign of the times, I think, when a simple desire to list stories telling of climate change disaster is met with charges of stupidity and giving comfort to `denialists` and `cranks`.
Insofar as you are trying to bring a coldly rational and non-judgemental approach to the topic your contribution is to be applauded. The knee-jerk emotional responses and personal insults demonstrate how far this topic has been moved away from disinterested investigation and turned into a moral issue.
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Wow – imagine the response you would have got if you had taken sides. It is scary how the skeptics are shouted down and expected to toe the party line.
hc – You suggested Rafe should read the Stern Review to get a better understanding of climate chnage issues. Have you read the Productivity Commission’s review of Stern’s methods? I became a whole lot less accepting of Stern’s claims after reading it. What is your response?
(http://www.pc.gov.au/research/staffworkingpaper/sternreview)
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Johno, I’ve looked at the PC document but think the Stern Review broadly got it right – it certainly drove the Garnaut Review.
No-one is asking anyone to toe a party line but most of the denialist claims cited in the Quadrant article Rafe cites (no warming since 1998, the illusion of the ‘hockey stick’, huge costs of addressing warming) have been repeatedly challenged and shown to be false.
If Rafe had foillowed the literature he would know this and cease representing these falsified claims as the views of a persecuted and misunderstood minority crying out to be heard.
You cannot just have a ‘view’. The view needs to be based on knowledge not on some vague underlying theory that we are being deluded by scientific conspirators.
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Actually I think you`re wrong, Harry. You are allowed to `just have a view`. In a liberal democracy you are allowed to think anything you bloody well like, and, within the limits of the law, to express an opinion as many times as you would like.
It need not be based on knowledge. But if so, then you will quickly be found out and there will be few people who will take you seriously.
My own opinion is based not only on the science and scientific opinion that I have read, but also on what I have learned about the approach and attitude of the climate change believers.
Regardless of the merits of the underlying science – and I repeat that, regardless of the merits of the underlying science – many things, from the hockey stick diagram to Stern`s review, looks suspiciously to me like an attempt to fix the outcome in advance.
The attempt to shut down debate by dismissing sceptics as `denialists` and claims that `the science is settled` are utterly disgraceful and should be condemned out of hand by anyone with an interest in intellectual life.
If anything, scientists and others should welcome the publications of the sceptics: they offer the scientists a chance to re-test their theories and prove the sceptics wrong. And if the sceptics are right, then surely we are better off for it?
The last and most disturbing aspect of belief in human-caused climate change is how it is coming to resemble a religion. Those who do not sign up to a profession of faith and agree to atone for their sins, or worse, suggest that it is a bunch of bunkum, are condemned as `denialists` and shunned by the community.
I think this is something that we should try to avoid. Belief in something – from God to climate change – is always valid. But the religions which often spring up around those beliefs almost always end up being complete and utter rubbish, and toxic rubbish at that.
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I think part of the problem here is that debate get frozen in their historical dynamic rather than moving on. From the point of view of the “alarmists”, they saw their task as discrediting the “denialists” who had, in their eyes, too much influence over conservative governments. Guy Pearse’s *High and Dry* is the most detailed example of this. The denialists are now a marginalised fringe that the alarmists need not even worry about, yet they are still obsessively pursuing them. The real debate has moved on to how to reduce emissions. There is a very real chance that despite having won the intellectual battle the alarmists will lose the political war, yet they put little effort into denouncing those who object to the ETS on non-scientific grounds.
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Andrew to my mind you have hit upon one of the key indicators that the issue now has religious characteristics.
Rene Girard, in his discussion of `mimetic desire` and violence, writes about how the desire of antagonists for a single object (here, control over public resources) can lead through competition to the antagonists forgetting about the object and seeking to destroy their antagonists.
The destruction of the `other` leaves society with a consensus, a catharsis bought at the cost of the sacrifice of the unfortunates who fell in with the losing crowd.
I realise that this is a considerable abstraction, open to criticism, but nonetheless I suggest it as a good working hypothesis with which to try to understand what on earth is happening in the whole climate change `debate`, in which the two sides seem to always talk past one another.
The irrationality and passionate invective which characterises climate discussions (and strongly so on the `alarmist` side of the debate) suggests psychological causes far removed from the facts and theories in dispute (as with Kevin Rudd`s car obsession).
When scientists of both camps can sit down and draw up a list of the things on which they agree, and the areas in which there needs to be further research, then I will begin believing that reason is guiding the discussion.
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Jeremy – Generally I am reluctant to use religious metaphors to describe secular debates (eg market fundamentalism, Marxism a substitute religion etc) because usually there are too few typical characteristics of religious belief for the metaphor to be more than a distraction. But Ian McFayden did make a pretty good case in the September issue of Quadrant that the climate change debate did have most characteristics of a religion.
On the other hand, it is as you suggest still in principle completely capable of debate in secular and rational terms, and dismissing an “alarmist” view because some alarmists have a religious devotion to the issue is a mistake.
Harry Clarke, for example, is a sensible person, even if I think he has been over-reacting somewhat on this issue.
And my ‘frozen debate’ argument was intended to keep this within the normal pattern of how debates develop – or in this case, don’t develop.
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For me, coming to some understanding of the psychology behind the `alarmist` pursuit of the `denialists`, even beyond the point where it promotes their own interests, is important. Psychological investigations of belief and behaviour are necessary here – it just so happens that these are, as we might expect, primarily concerned with religion.
This is especially relevant because the medium-term forecasts of mainstream science are nothing short of apocalyptic, and until now apocalyptic thinking has been almost exclusively religious. That`s where the psychological studies can be found.
So I should have thought a little harder about exactly what I wanted to say before tapping it out. But I think the point still stands – what we are witnessing is not rational, and our best chance for an explanation lies in psychology.
Who knows – getting an understanding of the motivations of the actors could help explain why debates do/don`t develop.
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The McFayden piece is very silly. How can you take anyone seriously who equates the IPCC assessment reports with the Bible? It seems possible that McFayden hasn’t even looked at the IPCC 4AR because the only scientific fact he tries to include in his piece he gets wrong — weather is not the same as climate.
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“There is a very real chance that despite having won the intellectual battle the alarmists will lose the political war, yet they put little effort into denouncing those who object to the ETS on non-scientific grounds.”
I’m wondering who you have in mind here, Andrew. To put it sharply, how many people took a strong position in favour of the science and against the “denialists” but nevertheless opposed an ETS. (Lomborg played a version of this game, but he had few followers here).
To be sure, there are plenty of people who support a carbon tax rather than an ETS, and Warwick McKibbin has long pushed a hybrid scheme, but the debate on these points has been reasonably civil, at least as far as ETS supporters are concerned.
From my point of view, the distinction you suggest is a false one. The people who rejected the science didn’t do so because of some esoteric connection between classical liberalism and views on cloud formation. They did so because they were opposed to any policy response (such as an ETS) that could possibly fix the problem. Virtually all Australian supporters of a do-nothing response gave active or tacit support to delusional science as long as that seemed like a sustainable strategy – the difference now is that some of the smarter ones have realised its time to change tack.
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They did so because they were opposed to any policy response (such as an ETS) that could possibly fix the problem.
Yes of course. Europe’s ETS has been such a raving success that carbon credits have traded at cents in the dollar due to all sorts of cheating and other wheel barrowing.
What a romantic view, Professor. LOl.
http://www.theaustralian.news.com.au/business/story/0,28124,24608324-30538,00.html
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Why not something similar on cancer? There certainly are alarmist stories about various things putatively causing cancer and there is a substantial body of opinion (faith healers, tobacco lobbyists and so on) to say that all such claims are overblown.
Professor, would the anti-vaccinationists that seem to populate leftist circles these days like the potential head of the US EPA (Robert Kennedy Jnr) qualify as a denialist?
I will presume your silence on this will mean you violently agree with me. 🙂
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The price of European carbon credits has fallen because there is a recession on in Europe – less industrial activity means less carbon pollution means less demand for credits means lower price of credits.
This is a sign of success. The whole point of a market is for the price to reflect demand and supply.
The only credits that are trading at cents in the dollar are those that are due to expire on December 31 2008. Not surprisingly, people aren’t willing to pay a lot for something whose value will be zero in a little over a month.
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The price of European carbon credits has fallen because there is a recession on in Europe – less industrial activity means less carbon pollution means less demand for credits means lower price of credits.
This is a sign of success. The whole point of a market is for the price to reflect demand and supply.
hahahahahahahhahahahahahahahaha
Another romantic.
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John – I expect that you are right that some ‘delusionists’ have recognised that the debate over the science is a lost cause, and moved directly onto the economics. My point was that the ‘alarmists’ weren’t keeping up. Whenever a denialist perspective on the science gets some media attention, they are quickly pounced upon by the ‘alarmists’. But those who argue the economics are not only far more common, but get a much easier run. Since I started monitoring the media on this last week, the denialists have had no stories in the media and the people I call the NIMBYs have had 10 (many with multiple reports in different outlets of the same basic story). In only 2 were critics of the NIMBYs also reported, and so far as I can find only one blog post has been published critiquing NIMBY claims.
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Andrew, I don’t think there’s much need to respond to individual NIMBYs (particular State govts and industries looking for handouts of free emission permits) since they pretty much discredit each other. The “rent-seeker” label has was pretty effectively attached to these guys a few months back, and I don’t think they have shaken it. They’ll probably get some returns to their effort, but I don’t think they’ll derail the process as a whole.
As far as those advocating a NIMBY line for Australia as a whole goes, the Treasury modelling, confirming Stern’s earlier analysis, means that they are in much the same position as the science delusionists, presenting gut feelings and talking points against well argued analysis. Again, I’ve focused on supporting the Treasury analysis rather than responding to the economic illiteracy of individuals (sadly, including people like Alan Wood who once knew better).
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Excuse me professor but not for nothing, you supported a virtually zero discount rate in Sterns report while only a few years ago you were caught out applying an enormously high discount to prove some other dead horse you were flogging.
Should I take it that the Quiggin formula when to apply a reasonable discount rate is zero for projects and issues you support and 10%+ for those you don’t.
I still can’t believe that you’re still trying to flog the line that inter generational transfers are done at zero PV.
And you criticize Alan Wood? Oh my, we do live in parallel inverses don’t we?
Alan Wood correctly surmised that Stern’s report and later its ugly twin the Garnaut report are a testament as to why economics gets a bad name with the public. Both were breathtaking in terms of their intellectual shallowness.
By the way did you have a hand with both reports?
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Stern had problems for a number of reasons.
Firstly, it had two inputs to the rate used, and both were flawed.
1. The social discounting rate.
Stern used a measure of what was basically willingness to pay. This was added to the second figure. This willingness to pay figure was based on income elasticity over 90+ years. (So skewed to infinity, when the measure is derived, skewed towards zero).
Most people’s lifespans are not that long. It is simply a poorly chosen tool. But Stern imputed that we would pay any price from our disposable income. Recent surveys show roughly 95% of Australians “care” about AGW but aren’t willing to pay.
2. The cost of capital. This was to be taken as 1.6%, in inflation adjusted terms.
The market cost of capital, even when discounted for inflation, is much higher.
This is what we should use. After all, this is what we are ultimately giving up as an opportunity cost. The cost of capital of opportunity costs seems quite a logical factor to input for most Government NPV decisions.
3. I also found Stern’s modelling of GDP growth to be questionable. I can’t quite remember but it appeared that his assumptions about GDP growth relied on a low baseline growth rate. The world GDP growth rate is increasing and has done so over the past few decades. His modelling was not based on what we know now as fact.
His modelling here also assumed no hysteresis and ignored the link between 1st world trade and investment and development of poor nations. Basically the mitigation would tax the vent for surplus out of existence. His notion of how little growth may be impacted upon needs reconsideration.
I think Stern should try again.
But hey. There are plenty of worldwide renowned economists who think he should try again as well. Dasgupta, Arrow, Nordhaus, etc….
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Mark, you’re well off the mark as regards Arrow, see here.
On your main point the relevant cost of capital is the real bond rate, which is close to 1.6 per cent. There’s no reason to apply an equity premium here. If you search my blog for Stern, you’ll find heaps more on this. Also your survey evidence suggests you aren’t reading the blog you are commenting on.
J(oe) – Apparently, Andrew tolerates trolls, so you aren’t banned here as you have been at nearly every other site in Australia. But PDFTT still applies.
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As usual professor, you’re being far too nice but less than honest. The two sites I’m banned is your amusing site and the ever delightful Tim Lamberts , which a shame really as I would dearly love to converse with some of your more colorful, carefully chosen commentors who seem to take delusional syndrome to an entirely new level.
:
The only trolls I know of are you and Tim. But don’t let me tell you as I don’t want to be the bearer of bad news all the time. Let the ONO editor Graham Young say it describing the pair of you as intellectuals louts and vandals.
:
See here:
……………..isn’t the only global warming bully, and unfortunately universities are used to give some of the others added credibility as well. John Quiggin, an economist who specialises in modeling, at the University of Queensland, and Tim Lambert, a computer scientist specialising in virtual realities, at the University of New South Wales, are web activists who practice brown-shirt tactics on any who question what they define as the global warming orthodoxy. Neither would pass Williams’ test of being qualified in the area.
Quiggin freely and frequently abuses any who challenge his orthodoxy using smear.
Read the last sentence carefully Prof. That’s what you’re tying to do to me. I guess old habits in an old dog die hard, hey Prof?
What ONO didn’t mention is the number of people you’ve threatened with law action.
Did you threaten Graham too, Prof?
I almost forgot, you deleted a comment at your wiki page accusing you of vandalizing other economists blogs (wiki trolling is more like it)
See here
He invests his time vandalizing the Wiki pages of other economists with whose politics he disagrees.
So whom are you calling a toll, professor you wikitroll. lol.
Now getting back to the point of the discussion:
On your main point the relevant cost of capital is the real bond rate, which is close to 1.6 per cent.
That’s nonsense. The UK treasury publishes the long-term bond rate to be used in long term modeling at around 7%.
Here’s the thing I will happily borrow any amount of money you can offer me at 1.6% +CPI (in the billions if you can). If you don’t want to lend it to me lend it to any OECD government, as I’m sure they would take as much as you can offer. The US is looking for plenty of cash at present ?
:
There’s no reason to apply an equity premium here. If you search my blog for Stern, you’ll find heaps more on this. Also your survey evidence suggests you aren’t reading the blog you are commenting on.
:
Why wouldn’t you apply the cost of capital, Prof.? We do it for everything else especially when we’re comparing long-term investment horizons. It’s patently ridiculous and intellectually shoddy to suggest that we interfere with unmolested GDP growth rates and then say that action shouldn’t be discounted for cost of capital when there is a real cost in lowering the future long term potential accumulating GDP.
You referred to those who make the same suggestion I’m am as denialists, however it’s pretty evident you’re the denialist and shoddy thinker in this case.
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OK, enough of who is and isn’t a troll.
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Arrow implies we should use the cost of capital in all capital budgeting decisions. We should. It is capital budgeting. Not wishful thinking budgeting.
(Arrow says) on a measure of 8.5%, the mitigation still works out to be break even or better.
It is poor analysis to use sovereign bond rates. They are not the cost of capital. But, so far you would err on mitigation.
That said, I find the modelling of GDP questionable – it is simply not based on what we know now as fact. Stern’s modelling is conditional on very low global growth rates for the next 100 years. That is not the known recent trend reflects. There is no reason to suggest otherwise.
Taken together, then you would logically conclude that no mitigation is the better option.
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