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Bjorn Lomborg argues that the implication of the latest IPCC report is that current mitigation policies are not smart in that the cost of mitigating CO2 emissions is much higher than the benefits:

Climate change has been portrayed as a huge catastrophe costing as much as 20% of world GDP, though brave politicians could counter it at a cost of just 1% of GDP. The reality is just the opposite: We now know that the damage cost will be perhaps 2% of world GDP, whereas climate policies can end up costing more than 11% of GDP.

His argument is partially that the catastrophic scenarios for future climate are now thought less likely but also that there are better ways to spend the money than current polcies (which feel good but don't make economic sense):

We live in a world where one in six deaths are caused by easily curable infectious diseases; one in eight deaths stem from air pollution, mostly from cooking indoors with dung and twigs; and billions of people live in abject poverty, with no electricity and little food. We ought never to have entertained the notion that the world’s greatest challenge could be to reduce temperature rises in our generation by a fraction of a degree.

The solution is to stop applauding politicians who warn of catastrophe and promote poor policies. Instead of subsidizing inefficient solar and wind power with little benefit, we need to invest in long-term green innovation. And we need to give more attention to all of the other problems. This is perhaps less entertaining, but it will do much more good.

[my emphasis].

Is his argument that current mitigation strategies are more expensive than the benefits they are likely to bring a reasonable one?

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  • I wonder what he means by long-term green innovation if that does not include solar and wind power.
    – gerrit
    Apr 23, 2014 at 14:32
  • 3
    This is a false dilemma, there is nothing to stop us from spending money on both mitigating against climate change and doing something about infectious disease, air pollution, poverty etc. Cherry picking the expert that currently most strongly supports your desired position is not a rational basis for policy, instead you need to look at the spread of opinion across the research community, and not simply plan expecting to be lucky.
    – user18604
    Apr 23, 2014 at 17:10

1 Answer 1

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The answer is probably not.

Let's look at where he has his numbers from first. The 2% come from the IPCC report which states:

Global economic impacts from climate change are difficult to estimate. Economic impact estimates completed over the past 20 years vary in their coverage of subsets of economic sectors and depend on a large number of assumptions, many of which are disputable, and many estimates do not account for catastrophic changes, tipping points, and many other factors.

With these recognized limitations, the incomplete estimates of global annual economic losses for additional temperature increases of ~2°C are between 0.2 and 2.0% of income (±1 standard deviation around the mean) (medium evidence, medium agreement). Losses are more likely than not to be greater, rather than smaller, than this range (limited evidence, high agreement).

Additionally, there are large differences between and within countries. Losses accelerate with greater warming (limited evidence, high agreement), but few quantitative estimates have been completed for additional warming around 3°C or above. Estimates of the incremental economic impact of emitting carbon dioxide lie between a few dollars and several hundreds of dollars per tonne of carbon 60 (robust evidence, medium agreement). Estimates vary strongly with the assumed damage function and discount rate.

This indeed says that the estimated global economic loss of income is between 0.2 and 2.0% for an increase in temperature of 2°C. Which is (from the same report) in the high-emission scenario going to be around 2050. It also says however that this is difficult to estimate and that for higher temperature increases, there are few estimates.

Now where do the 11% that policies will cost come from? It's from another IPCC report:

Scenarios in which all countries of the world begin mitigation immediately, there is a single global carbon price, and all key technologies are available, have been used as a cost‐effective benchmark for estimating macroeconomic mitigation costs (Table SPM.2, green segments). Under these assumptions, mitigation scenarios that reach atmospheric concentrations of about 450ppm CO2 eq by 2100 entail losses in global consumption—not including benefits of reduced climate change as well as co‐benefits and adverse side‐effects of mitigation — of 1% to 4% (median:1.7%) in 2030, 2% to 6% (median:3.4%) in 2050, and 3% to 11% (median:4.8%) in 2100 relative to consumption in baseline scenarios that grows anywhere from 300% to more than 900% over the century. These numbers correspond to an annualized reduction of consumption growth by 0.04 to 0.14 (median:0.06) percentage points over the century relative to annualized consumption growth in the baseline that is between 1.6% and 3% per year.

So the report concludes on a reduction of 3% to 11% in consumption in 2100 or more clearly on a annual consumption growth that it is slightly reduced (0.04 to 0.14 (median:0.06) percentage points).

Now, of course comparing a reduction of the consumption rate to a loss of income is comparing apples and oranges. The conclusion that the costs of climate policies are five time highers than the benefits cannot be drawn from those numbers.

Other than that there are other aspects why the reasoning is false. For instance it does not take into account the costs of not taking action now will have on the time after 2080, where if no action is taken, the temperature will continue to grow (see the IPCC report).

Further information can be found on this article on the Skeptical Science blog with additional sources.

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