Decades ago, Nordhaus’s work provided a set of tools that should have appealed to market-minded politicians as a way to tackle greenhouse gas emissions. Yet American conservatives chose denial instead. And because the right ignored Nordhaus (and those who picked up on his work), it seems unlikely that this country will take the “unprecedented” actions that the U.N. Intergovernmental Panel on Climate Change said this week are necessary to hold global warming to 1.5 degrees Celsius.
This is the second paragraph of David Bookbinder and Joseph Majkut, “Nobel laureate William Nordhaus provided tools to fight global warming. It’s tragic conservatives ignored him.” Washington Post, October 12, 2018. Bookbinder and Majkut are chief counsel and director of climate policy respectively at the Niskanen Center.
As you can see in the quote above, Bookbinder and Majkut are claiming that ignoring Nordhaus makes it unlikely that the United States will act to hold global warming to 1.5 degrees Celsius. But it’s Bookbinder and Majkut who are ignoring Nordhaus.
Nordhaus found that sum of the present value of damages and costs for the “do nothing” option was $22.59 trillion; for his optimal carbon tax was $19.52 trillion; and for the 1.5 degree Centigrade limit was $37.03 trillion. In other words having no carbon tax gives results much closer to those of Nordhaus’s optimal policy than limiting the temperature increase to 1.5 degrees Centigrade. Getting to that temperature increase would cost an extra $17.5 trillion.
So if anyone should be accused of ignoring Nordhaus, it would be the authors at the Niskanen Center.
The authors published their piece before an interview with Nordhaus ran in the New York Times. But Nordhaus’s response on an important question doesn’t exactly add clarity where it’s needed. Here’s the relevant part of the Q&A:
Do we have enough time to avoid the warming that will bring severe and damaging effects of climate change?
It’s not going to happen in time for 1.5 degrees. It’s very unlikely to happen for 2 degrees. We’d have to be very pessimistic about the economy or optimistic about technology for 2 degrees. If we start moving very swiftly in the next 20 years, we might able to avoid 2 degrees, but if we don’t do that, we’re in for to changes in the Earth’s system that we can’t begin to understand in depth. Warming of 4, 5, 6 degrees will bring changes we don’t understand because it’s outside the range of human experience in the last 100,000 to 200,000 years.
Nordhaus should have said, not “It’s not going to happen in time for 1.5 degrees,” but rather “We shouldn’t try to impose a policy that keeps the temperature increase to 1.5 degrees because such a policy would have way more costs than benefits.”
READER COMMENTS
Ted
Oct 15 2018 at 9:35pm
David, I find your writing style to be smug and grating. That may be as much as fault with me as with you. Here are some things that you wrote that irritate me:
(1) You say Nordhaus ‘found’ rather than ‘estimated’
(2) You report the estimate to four significant digits, when even the first digit is controversial
(3) You ignore that the cost of holding warming to 1.5 C is not a constant – it’s a function of time (the cost of holding warming to 1.5 C given actions starting in 1988 is very different than the cost of holding warming 1.5 C given actions starting in 2018)
(4) You conflate ‘ignore’ with ‘having a different estimate of something that’s difficult to estimate but still fundamentally agreeing with market-based approaches to carbon emission reductions’
I read you because I think it’s especially important to read people with communication styles different from your own, since those are the sources you’re most likely to systematically ignore.
That said, I hope you also realize that when you write smug articles, the comments that you provoke (like mine) will be relatively low quality, and may give you an unjustifiably inflated opinion of yourself by comparison. I hope you are aware of that selection bias and strive for humility in your future thinking and writing.
Best regards,
Ted
David Henderson
Oct 15 2018 at 10:38pm
Thanks, Ted.
Your first two points I absolutely agree with, and if I had it to do over again, I would write it differently. I’ll leave it as is, though, so that other readers of your comment can at least see what you’re referring to.
I’ll think about (3).
On (4), I think you’re wrong. If they are going to hang their hat on Nordhaus, it’s important for them to keep in mind what Nordhaus actually found, I mean, estimated.
I have two follow-up questions, Ted:
(1) Do you read my posts regularly? If so, do you think that I’m, by your standards, smug a lot? I ask because I haven’t heard this criticism of me very often, but I don’t want to dismiss it.
(2) How would you describe your writing style? You suggest that I strive for humility. Do you think your style is humble? If so, could you point me to other things you’ve written so that I can make my judgment. I certainly don’t see what you wrote above as being humble but maybe that’s your point–maybe your comment is, by your standards (although not by mine, by the way), low quality. If you are not willing to point me to things you have written, are you willing to point me to writing samples that are, by your standards, humble?
Mark Z
Oct 16 2018 at 6:00am
“You conflate ‘ignore’ with ‘having a different estimate of something that’s difficult to estimate but still fundamentally agreeing with market-based approaches to carbon emission reductions’”
That’s pretty clearly not the correct interpretation of their article. Do they themselves say, “we have a different estimate from conservatives (they don’t specify which ones) about the cost of 1.5 degrees of warming…” No; they specifically refer to Nordhaus’s work as refuting the preferred policy of ‘conservatives.’ But in fact, Nordhaus’s own numbers put the ‘conservative’ policy of doing noting much closer to what his work suggests is the optimal tax than what the authors themselves implicitly support (I’m assuming that from their apparent approval of limiting warming to 1.5C).
In other words, the optimal policy suggested by Nordhaus’s work is much closer to being in agreement with the ‘conservative’ ‘do nothing’ policy than it is with the policy of limiting warming to 1.5C. So they’re clearly not in a position to lambaste ‘conservatives’ by referring to Nordhaus’s work when there is much more daylight between them and the ‘Nordhaus optimum’ than between ‘conservatives’ and the ‘Nordhaus optimum’ (using scare quotes because Nordhaus may not personally prefer that policy). So ‘ignore’ seems like the right word.
Also, ‘found’ is commonly used when referring to conclusions reached by researchers. They’re even called ‘findings,’ even by people who think they’re incorrect. One might hedge by saying ‘claimed to find,’ but using ‘found’ isn’t exactly inappropriate; I would say it’s fairly synonymous with ‘estimate’ in this context.
Mark Z
Oct 16 2018 at 6:01am
Oops that was supposed to be in response to Ted, and the part in quotes is quoting Ted.
David Henderson
Oct 16 2018 at 9:15am
Thanks, Mark Z. Nicely done.
Ted
Oct 16 2018 at 4:43pm
I feel bad for my rude comment. I hope you are splendid and I hope you take my comments in as a constructive a way as you can. I wrote my comment in haste because I felt you were being unfair. I think I was unfair myself. I will answer the questions you asked of me:
(1) I do read your posts occasionally. I see every one in my RSS feed, but I would guess I click on 10%-40% of them.
(2) I would describe my own writing style as a influent, disjointed, logical, overwrought, open-minded, careful, hedged. I wouldn’t consider my writing humble, especially not my comment above. Here are some of my writing samples as you request, though I don’t consider any of them humble (and certainly not my rant on zipper merging!)
https://marginalrevolution.com/marginalrevolution/2018/01/from-the-comments-30.html
http://www.themoneyillusion.com/what-do-we-mean-by-meaning/
http://www.tedsanders.com
https://www.facebook.com/tedsanders
Overall, I think you’re a better writer than me. But that shouldn’t stop either of us looking for opportunities to improve. I think what grates me most (and this is my fault as much as yours) is that some of your writing seems to be playing an implicit status game where you ding people you disagree with, often in ways I find uncharitable. I bet that if you dinged people I didn’t like, I wouldn’t bat an eye at your style, but because you ding causes I’m sympathetic to (like carbon pricing or estate taxation), I have developed a sensitive threshold for it in your writing.
I think a big part of my perception may not just be the wording, but also the topics you choose to write or not write about. I will come back to provide some examples when I have more time.
Best wishes.
P.S. In the meantime, here are a couple of your articles that I liked:
https://www.econlib.org/paul-romer-on-economic-growth/
https://www.econlib.org/crazy-rich-asians/
David Henderson
Oct 16 2018 at 6:40pm
Thanks, Ted. I appreciate your taking my questions seriously. I could say more, but I’ll leave it at that for now. Well, I’ll say one thing: you are more gracious than I expected, and I appreciate that.
Ted
Oct 16 2018 at 9:31pm
I aspire to make the internet and the world a kinder and happier place. I don’t think my earlier comment contributed to that, but hopefully my future comments do. Best wishes.
Dylan
Oct 17 2018 at 12:16pm
David,
I’ve been traveling for a few days and just now catching up with my blog reading, but I wanted to take a moment to hopefully add some constructive feedback because I feel like I understand where Ted was coming from. I’ve been reading this site, and you, for a year or two now, after being a listener to EconTalk for a much longer period.
When I first read you I also felt somewhat as Ted did (although I think I might have used “self-satisfied” over “smug”). I kept reading because I felt you often had interesting things to say, but it was despite your writing style and not because of it. When you first posted a link to an interview you did, I clicked it somewhat reluctantly because I expected that style to rub me even more the wrong way watching and listening to you, more than reading. To my surprise, that was not at all what I saw and I found you quite gracious and charitable to the host of the program as well as the person you were ostensibly debating. Seeing this has helped put into perspective your writing style, and it does not bother me as much anymore. However, I still do notice it, particularly in your response to comments.
Take this line in your reply to Ted: “Well, I’ll say one thing: you are more gracious than I expected, and I appreciate that.”
I understand that the internet has led many of us to expect uncivil back and forth, particularly among people that disagree with us. However, Ted’s original comment for a “rude” one was pretty mild. He stated up front that the problem might be his, he gave specific examples from your post, and even acknowledged that his reply was of “low-quality.” I mention this not to argue that he couldn’t have worded his original post better in some ways, because I think he certainly could have, but it seems to me that if you were to expect a gracious reply from anyone based on a single post, Ted’s original post should definitely qualify.
If this were just a single incident I wouldn’t mention it, but from my year or so of reading you the impression I have gotten is that you often assume the worst of people who comment in a somewhat critical way, and that this colors the tone of the way you reply. I would like to give you credit though in that you do reply to comments, even those that you feel are negative, and almost always do so in a thoughtful way. It’s just that little aside comments like this one can sometimes detract from the rest of the reply.
(and now – back to the substance of the post)
One thing that I am curious about, if Nordhaus’ work is consistently being misinterpreted by the press and other groups, you would think that Nordhaus would step up and say something? Yet, in the section you quote, he doesn’t appear to be saying any such thing and the tone of the comments suggests he is in large agreement. I’m planning on reading the rest of the interview over the next couple of days, but am I missing something here, or reading too much into the quote?
Rohnn Sanderson
Oct 17 2018 at 1:09pm
David, Ted
I am not sure about Ted’s point (3). To use a little Julian Simon logic, why would costs be increasing? Are we perhaps discounting the “Ultimate Resource” too much?
Ted
Oct 17 2018 at 8:12pm
Well, assuming the warming trend continues unabated, then at some point holding warming to 1.5 C will require building a time machine. I expect that will be quite expensive.
Though I take your point that I haven’t proven my case and it’s quite conceivable that the rate of growth, over some periods, might outweigh the rising cost of waiting, making waiting the cheapest strategy over those periods.
Thanks for highlighting that nuance.
David Henderson
Oct 15 2018 at 11:10pm
Ted,
Another question. On (2), using 4 significant digits, I was reporting Nordhaus’s numbers. Was this an example of something you saw as smug or is this just something that irritates you? Whichever it is, are you planning to write Nordhaus and tell him your objection to his smug or irritating style?
Ted
Oct 16 2018 at 9:28pm
No, I didn’t find the usage of extra digits smug. Perhaps suboptimal, but not a terrible sin. I guess I reacted to it because it felt as if it connected to my perception of the smug tone in the following way:
Your argument was saying that Bookbinder and Market disagreed with Nordhaus’s estimate. It felt to me like including those sig figs placed an air of certainty around Nordhaus’s estimate, when in reality (as Nordhaus himself admits) the estimate is highly uncertain and only one of many.
Otherwise not a big deal.
Jon Murphy
Oct 16 2018 at 9:58am
I may be wrong, but I believe “found” is commonly used when discussing studies. Yeah, it perhaps conveys a sense of confidence stronger than is really appropriate and “estimated” would be more appropriate, but “found” doesn’t seem to me to be too far outside the realm of reasonableness.
MikeW
Oct 15 2018 at 10:38pm
So, Ted, do you have any substantive comments? I would agree with David that the recommendations in the recent IPCC report are totally out of step with what Norhaus has found in his studies. And since Nordhaus just won a Nobel prize, it seems that someone should be pointing that out.
Ted
Oct 16 2018 at 9:23pm
No, I don’t think I do. I’m sorry. I did look for a meta analysis for global warming cost estimates to see how Nordhaus’s old estimate compared to the pack, but I didn’t find much and I gave up. I’ll stop posting for now.
Mark Z
Oct 16 2018 at 6:09am
“Do we have enough time to avoid the warming that will bring severe and damaging effects of climate change?”
This seems like a strange question to ask an economist. It seems like the right question would’ve been something more along the lines of: how big are the costs of not enacting policy to reduce warming (or only reducing it by a suboptimal amount) over some timeframe? How much do we ‘save’ in the long run by adopting the optimal policy today instead of adopting what would be the optimal policy in 10 years, 20, or 50?
Hazel Meade
Oct 16 2018 at 1:34pm
Nordhaus found that sum of the present value of damages and costs for the “do nothing” option was $22.59 trillion
This statement seems to contradict his later statement:
“we might able to avoid 2 degrees, but if we don’t do that, we’re in for to changes in the Earth’s system that we can’t begin to understand in depth.”
If we can’t begin to understand the changes in depth, then how do we get an estimate of $22.59 trillion in costs? I think something is missing here. How much temperature warming is that $22 trillion assuming?
Bob Murphy
Oct 16 2018 at 2:41pm
Good post, David. Wow, that’s ironic about the Niskanen guys.
Here is my recent post at IER on this issue. Hazel Meade, you might want to take a look.
T
Oct 16 2018 at 3:43pm
“David, I find your writing style to be smug and grating.”
Seriously? Are most of your readers non-economists? Maybe you should do a survey broken down between economists and non-economists.
Thaomas
Oct 16 2018 at 4:54pm
Not to “ignore” Nordhaus would be to advocate for a carbon tax based on Nordhsus’s estimate. In fact Conservatives and Libertarians have allowed themselves to seem to oppose any carbon tax at a rate greater than zero and what is worse to seem to be “skeptical” about the harm from CO2 accumulation being greater than zero.
David Henderson
Oct 16 2018 at 6:41pm
But my point is that the zero carbon tax that many conservatives and libertarians advocate is closer to Nordhaus’s preferred tax than is the one implicitly advocated by the two Niskanen guys.
Mark Z
Oct 16 2018 at 9:01pm
But underestimating the optimal tax rate (or the harm from CO2 emissions) isn’t automatically more dangerous than overestimating it. If, say, temperature rises at a rate of 1.5C per doubling of CO2, then it’s possible the optimal policy given total denial (0 degrees C) will yield a better outcome than severe overestimation (say, 5 degrees C).
This is a somewhat grating epistemological bias many people seem to have on this issue. If the scientific consensus is (just throwing out numbers) the parameter of interest is about 2, it seems someone who disputes this and claims it is only 1 is regarded as a ‘denier’ outside the mainstream, sometimes dangerous, while someone who says it’s 5 – despite being further from the consensus estimate – is still regarded as a legitimate voice. It seems it is tacitly assumed that overestimating the severity of cost of CO2 emissions is without cost, and we therefore need not mind the upper bounds of our estimates.
David Henderson
Oct 17 2018 at 1:07pm
Dylan above write:
It’s a good question. This earlier post of mine helps give the answer.
https://www.econlib.org/archives/2014/03/david_friedman_15.html
Dylan
Oct 17 2018 at 8:07pm
Thank you for the reply and link to your earlier column. Useful, but I think I am still missing something as it still seems to be the same issue repeated. Writers take a look at his published work on the net costs and claim that he is much closer to those wishing to do nothing than he is to those who claim the problem is much bigger, yet his own words and actions suggest much more sympathy with the latter than the former.
Because I had a jet lagged and mostly sleepless night I had time to read the updated Nordhaus paper the Washington Post linked to that gives a new estimate for the social cost of carbon (SCC) which he says is significantly more than the model’s most recent previous estimate from 2013, which itself was revised upwards from earlier estimates. Now in this paper he doesn’t do explicit PV calculations for various scenarios as were quoted earlier from the 2008 paper. My feeling is that these should be embedded in the SCC, but I’m afraid that I don’t understand all the linkages to be able to compare directly. However, it does seem reasonable that if there have been significant changes in the results of the model based on better estimates of the inputs, and those changes put the SCC significantly higher than it previously was, we shouldn’t use the results of a 10 year old model as representative of Nordhaus’ current thinking?
I’m no economist, and I’m operating on ridiculously little sleep over the last 3 or 4 days, so it is completely realistic, even likely, that I’m missing something obvious here.
Mark Z
Oct 17 2018 at 8:57pm
It is possible that Norhaus’s own personal political position is support for a higher tax than what his own analysis suggests is optimal; other things than cost-benefit analysis motivate people’s policy positions, for better or worse.
Laron
Oct 19 2018 at 4:49pm
Late to this, but I just had to commend you Prof Henderson and commenter Ted on such great discourse. This type of professionalism and civility are a big reason that Econlog comments are generally the only comment sections I read.
David Henderson
Oct 19 2018 at 10:36pm
Thanks much, Laron.
Comments are closed.