Monday, October 22, 2007

Economics and Global Warming

Here is another essay from Dr. Roy Spencer where he points out some of what he sees as the real-world economics of trying to control global warming. Just how realistic is it to think we can control climate change by reducing carbon dioxide emissions a little? It doesn't add up.

A Little Eco-Nomics Never Hurt
By Roy Spencer : BIO 31 Jul 2006
Technological advancements have elevated mankind to its healthiest and wealthiest level in history. Our lives are longer, our health is greater, our food is more plentiful, and modern conveniences are now so affordable that even the poor among us own what only the rich could afford 50 years ago.

It is against this backdrop that we now find ourselves debating the merits of many of these conveniences and advancements. From the chemical scares of the 1960's and 1970's (e.g., DDT, dioxin, food preservatives), to the fear of runaway population growth and rapidly dwindling petroleum supplies, the very people that have been blessed with the prosperity that unbridled human ingenuity brings are increasingly anxious about the world we have created for ourselves.
Fear of the ultimate environmental threat, global warming, is now striking at the very heart of modern life, casting doubt upon the future availability of inexpensive energy that is necessary to keep society running. Al Gore's movie 'An Inconvenient Truth', Discovery's recent special 'Global Warming: What You Need to Know with Tom Brokaw', and a deluge of media stories and editorials are all dedicated to convincing you that we need to be saved from ourselves.
And while it is true that there are potential negative side effects of our use of fossil fuels (as well as most other natural resources), little attention is ever paid to the practical question: what should be done about it? It is much easier to point out a problem than it is to actually fix it....and 'fixing problems' too often leads to unintended negative consequences.

A century ago people would be too busy working -- trying to stay fed, clothed, and sheltered -- to worry about any ill effects from the industrial revolution. Today, though, we have enough wealth to not only support ourselves and clean up most of our messes in the process, but to donate to causes that claim to be 'making things better' by lobbying for ever-increasing levels of cleanliness and safety in our environment.

What reasonable person could be against 'clean water', 'clean air', and 'clean renewable sources of energy'? Who dares argue with politicians, scientists, and other pundits who lead the fight against global warming?

The dangerous illusion underpinning many environmental efforts is that it is both possible and preferable to keep pushing toward a 100 percent clean and safe existence. Those of us who try to point out that there are practical limits to cleanliness and safety are immediately branded as shills for big business. Meanwhile, environmentalists and politicians get to hold the high ground of altruism and concern for the public's interest.

P.J. O'Rourke once said, "Some people will do anything to save the Earth...except take a science course." To that I would add, "...or a basic economics course". If for a reasonable cost we can remove 98 percent of the contaminants in our drinking water and make it quite safe, is it then a good idea to spend ten times as much to push that purity from 98 percent to 99 percent?

In the real world, there are only limited resources to accomplish everything we want to do, and resources diverted to wasteful ends are no longer available to tackle more pressing problems. Only in the imaginary world of the environmental lobbyist, pandering politician, or concerned journalist is it a public service to keep pushing toward 100 percent purity.

Occasionally, the light bulb will go on, and someone realizes the practical limits that (thankfully) keep "Earth saving" goals from rarely being achieved. This happened to '20/20' consumer advocate John Stossel in 1994, with his special "Are We Scaring Ourselves to Death?". For me, it was about 1985, when I started reading about -- and understanding -- basic economics.

While most people are out making the system work, others are devising ever more alarmist ways to make it look like the latest drought, flood, or hurricane is mankind's fault. The implication is that, if only enough of us can agree that something bad is happening, we will then be motivated into action. And we indeed should do those things that make the most economic and scientific sense -- for instance national investments in energy research.

But when the pundits push for solutions that will not work (the Kyoto Protocol, or the rapidly failing EU carbon trading scheme), one begins to wonder about either their intelligence or their motives. In the end, these efforts do little more than redistribute wealth and let their proponents feel good about themselves.

Could redistributing wealth be the true motive? Disdain for 'wealth' and 'big business' arises when people neglect the fact that these conditions only occur when someone figures out a better way to provide more desirable goods and services, at a lower cost, that people want. Economic transactions benefit the seller and the buyer, otherwise they would not occur.

But instead, our language belies persistent beliefs in economic myths: 'workers' versus 'management' (as if managers have no economic value), or 'price gouging' (when gasoline supply is disrupted, or has a threatened disruption, and prices rise, we somehow expect the laws of supply and demand to be repealed). We may be envious of those that have more than us, but it is misguided to believe that if they had less, that we would have more.

Everyone benefits from the promise of profits that motivates investors to risk their money on better ways to provide what people want. You say you don't like the disparities in wealth that a free market generates? I would be glad to have my wealth increase by only 40 percent as the rich see a 200 percent increase in their wealth. The alternative is for all of us to be equally poor and miserable. If you must, think of profits as a necessary evil...but for the good of all of us, profits (as well as the risk of losses) are a necessary part of our high standard of living.

As long as the media continues to portray the global warming issue (as well as other environmental threats) as an ideological battle between politicians and scientists who are trying to save humanity on the one hand, and evil petroleum-pushers bent on maintaining our 'addiction to oil' on the other, we will be no closer to solutions to our energy problems.
Journalists have the power to frame the debate, and so far that power has been, at best, misused. At worst, it has been abused.

Dr. Roy Spencer is a principal research scientist for the University of Alabama in Huntsville and the U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer (AMSR-E) on NASA's Aqua satellite.

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