October 31, 2006 | Graham

Framing the market

Nicholas Stern has produced a report Interesting to see the paranoid left fawning over a former head economist of the World Bank. The report attempts to take an economic view of the global warming theory and comes to the conclusion that we need to radically change our ways to avert disaster.
I haven’t read the whole report, but it appears to have a number of problems. One of these is how it frames the risks. Let us assume for a moment that the predictions it makes for increases in global temperature are correct. Are these increases a real problem?
Stern says yes. He says that food production will decrease in vulnerable areas, sea levels will rise and species diversity will diminish and diseases will flourish. The result will be famine, fire, pestilence and flood. So, the world we enjoy now is the best of all possible worlds, but is the neo-panglossianism accurate, or is it bounded by its own limits?
Ask an economist a question, and the usefulness of the answer you get will probably be dictated by how you phrased the question. The two graphs below suggest that the four horsemen of the fiery environmental apocalypse may be preferential to the Dantian hell that could await us otherwise. Warm trumps cold.
Both graphs are courtesy of Professor Bob Carter of JCU. The first shows temperature variations over the last 450,000 years. Anything not in orange is to be avoided. Let’s not forget that at the depths of the last ice-age sea levels were 125 metres lower than now and crop yields were dramatically lower because there was ice everywhere. Stern hasn’t calculated the economic cost of this, but it’s well in excess of his $9 trillion figure for unabated carbon dioxide.
Now, you might legitimately interject that this is pretty long-term stuff, and discounted cashflows show that anything that happens more than 50 years in the future really doesn’t matter much (which raises the issue – what discount rate was Stern using?).
Bob’s helpfully provided me with another shorter-term graph. Contra the now-discredited hockeystick, this shows that we are in the cooler end of the last 5000 years and that perhaps we ought to be more worried about another “Little Ice Age”. Again, Stern hasn’t calculated the economic loss from a little ice age, but let’s just say that it might be considerable, and at least equal to a 2 degree warming.
So, how would you frame the odds? Fancy a carbon-prolonged indian summer, or bring on winter?
And that’s only if you accept the Stern hypothesis that carbon dioxide is a significant climate forcing agent. More on that another time.

Posted by Graham at 8:02 pm | Comments (11) |
Filed under: Environment


  1. Has it escaped your notice, Graham, that there’s a surplus of humans? that there is no river or waterway on the planet from which the water is safe to drink? That all food is now more or less poisoned by herbicides, pesticides and so on? That the air in cities — where most humans live, is now more or less poisonous?
    That thousands of species of animal and plant are becoming extinctevery year?
    That there’s an alarming increase in mental illness, the danger of pandemics, that the gap between rich and poor is widening, that food and water are running out, that wars are everywhere and much more dangerous and lethal than ever before. that vast areas of the planet are so polluted with radiation they make everyone sick, that humans have made a monumental stuff up of life, relationships, and their only home, and there’s no solution while humans remain human — arguing as you are about the equivalent of how many angels can fit on the point of a pin. Faced with extinction, you are wondering what you should wear!

    Comment by Ybgirp — November 1, 2006 @ 11:26 am

  2. It hasn’t escaped my notice that there’s too many of us here. Nor has it escaped my notice that Australia has got its population levels more or less right. Our carbon dioxide emission levels aren’t a problem because the land mass we inhabit is more than enough to absorb them.
    But has it escaped your notice that if things were as bad as you say they are, there wouldn’t be a population problem because we would all be dead! The air in cities is poisonous? Come on.
    And last time I saw a study, the gap between righ and poor was getting smaller, although what environmental point you are making here, I’m not sure.

    Comment by Graham Young — November 1, 2006 @ 7:33 pm

  3. It’s a safe bet that 99.9% of Australians have never heard of the Pommy, Stern; yet the looney left takes everything he says as gospel. Even if his ECONOMIC predictions are correct, the SCIENTIFIC predictions which could bring about the economic effect are still far from proven.
    It’s to be hoped that politicians are more thoughtful than the loud activists when they study this report.

    Comment by Leigh — November 2, 2006 @ 9:48 am

  4. Thank you Graham Young, Editor of OnlineOp for revealing yourself as essentially a climate change / Global warming denier. I dont think it is biasing the material that the magazine publishes, which is good.
    Our Prime Minister was denying the whole thing for the last 9 years too, until a couple of weeks ago when he started making at least token statements that we should be doing something about it. Apparently because Mr G Bush (the younger) has commenced making such token statements.
    Re Mr Young’s statement that our carbon emissions are not a problem because our land mass is large enough to absorb them – I see two problems with that nice hope. One, air moves around the globe, doesen’t respect national boundaries, therefore CO2 created anywhere contributes to the overall global load.
    Two, it is not “land mass” that absorbs CO2, it is vegetation particularly trees. We have already deforested most of the country and with the current drought and generally drying conditions predicted by most scholars, there will be less and less vegetation to soak up CO2.

    Comment by Ironer — November 2, 2006 @ 1:25 pm

  5. How does this work? I make an argument based on a supposition that temperatures will rise because of CO2 and you describe me as a denier. Apart from the fact that I find the term objectionable as it draws a comparison between having scientific debate on the issues around AGW and denying the Holocaust, it’s not even an accurate description of my position.
    It is, however, a good indication of the way the whole debate is constructed. You either approve of whatever proposition on global warming is being put, not matter how hysterical, or you’re a morally bad person.
    Frequently the accuser doesn’t even have a base level grasp of science, let alone the science around global warming.
    You’re right, CO2 does go everywhere on the globe, but to ignore the contribution that your vegetation and the seas surrounding your continent make to its abatement isn’t sensible. You should also check out the facts on tree cover. It’s likely there’s more now than when we first settled Australia, and what’s more there’s been an increase in vegetation cover over the last decades.
    It’s not emissions per se that are the issue, but whether there is a build-up of emissions. If the world was settled to Australian densities, there would be no build-up. Don’t you think we deserve to be rewarded for that, or at the very least, don’t you think that countries that are over-populated should be encouraged to do something about this?

    Comment by Graham Young — November 2, 2006 @ 5:30 pm

  6. The gap between the rich and poor getting smaller? You must be joking.
    I would suggest checking out Planet of Slums by Mike Davis to see what is really happening.
    Meanwhile how many thousands of children die every day due to the effects of grinding poverty?

    Comment by John — November 2, 2006 @ 7:17 pm

  7. Excellent reply to Ironer, Graham. Australia has a lot to be proud of and we can help other countries. But we should not think that anything we do here will have much effect on the rest of the world; particularly the Third World.
    Just a few hours in KL now will leave you with a very sore throat, thanks to the continual burning off of forests in next door Indonesia. The Malaysians complain, but their cowardly government does not even remonstrate with the Indonesians.
    The uneducated, big breeders and spoilers are the ones we should be taking to task, not ourselves.

    Comment by Leigh — November 2, 2006 @ 7:39 pm

  8. OK Mr G Young, calling you a “denier” serves no purpose, sorry. But you did bring it on yourself. The opening line of your essay appears to label those who agrees with Stern as the “paranoid left” and as “fawning”, whereas I doubt you describe your relationship with Bob Carter as “fawning”. But that is what it appears to be upon reading the essay.
    Since Carter appears to be your main source of inspiration (you acknowledge you havent yet fully read Stern) I have looked back at his essays on Online Op. He certainly takes delight in simply pouring scorn and making up amusing names for anybody who takes human induced climate change seriously. He calls it a “scare campaign” and says they are affected with a disease that he has invented called “Mother Earthism”. If he prefers this kind of insult to rational debate it is not a good sign. So compared to Carter, who appears to be your guiding light, calling you a “denier” is pretty mild stuff and certainly should not have caused offence. I made no reference to holocausts anywhere and have no idea of your thoughts about that matter.

    Comment by Ironer — November 2, 2006 @ 8:41 pm

  9. Dear Ironer, how about reading what I write instead of making it up? I didn’t say that only the “paranoid left” agreed with Stern, but that it was ironic to see them doing so because of where he comes from. They’re the ones into guilt by association, I was just pointing out how opportunistically they apply the principles.
    And you can’t help yourself can you? I use a couple of graphs that I asked Bob Carter for after listening to one of his speeches last year, and you suggest I am “fawning” over him. Could it just be that he gave an interesting speech with some insightful graphs which I thought illustrated the points really well? Why do you have to be so pejorative?
    And then you get into Carter, who is a well-respected earth scientist, because he’s used some colourful language. If that’s a sin, you’re more guilty than most.
    You made a reference to holocaust – that’s what the term “denier” is tied up with.
    Have you got anything to add to this debate rather than self-serving and bad analysis?

    Comment by Graham Young — November 2, 2006 @ 10:43 pm

  10. You raise an interesting point in that I have never seen the left and the environment movement so passionately defending a former World Bank economist. I look forward to them joining me in the fight for greater economic freedom, reduction in trading barriers and all the other things which all these global economic institutions represent. I would also like to know how many of those commentators above have put their money where their mouth is and sold their car, cancelled any airline flights etc etc. If not, words mean little people, let’s see some action!

    Comment by Matt — November 3, 2006 @ 3:27 pm

  11. “ybgirp” is needlessly alarmist: humanity does seem to be eradicating it’s own environment, with possible, even probable, catastropic population crash on the near horizon.
    but, is this a bad thing? the other inhabitants of the planet will breathe a sigh of relief, the clever or well-connected or lucky few humans that survive will make a well deserved ‘killing’ out of the mass death, and the hand-wringing chatterati will be culled, perhaps forever.
    roll on, armageddon- nature’s way of improving the survival qualities of every form of life.

    Comment by al loomis — November 8, 2006 @ 10:39 am

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