New study of climate breakdown attribution

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It should be patently to everyone at this point. My town has recieved 15 inches of rain in the past 2 weeks, which is literally 3x the amount of rain we previously recieved in the entire record holding month. Flash floods all over the place.

To make it even worse, people here can only get flood insurance if they are in a FEMA recognized flood zone; most of the recent flood victims aren’t, so they are up a flooded creek without a paddle.

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Here’s a take on how we got to this point: The appallingly bad neoclassical economics of climate change: Globalizations: Vol 18, No 7

Forecasts by economists of the economic damage from climate change have been notably sanguine, compared to warnings by scientists about damage to the biosphere. This is because economists made their own predictions of damages, using three spurious methods: assuming that about 90% of GDP will be unaffected by climate change, because it happens indoors; using the relationship between temperature and GDP today as a proxy for the impact of global warming over time; and using surveys that diluted extreme warnings from scientists with optimistic expectations from economists. Nordhaus has misrepresented the scientific literature to justify the using a smooth function to describe the damage to GDP from climate change. Correcting for these errors makes it feasible that the economic damages from climate change are at least an order of magnitude worse than forecast by economists, and may be so great as to threaten the survival of human civilization.

The author has made the whole text available here.

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The lack of attention paid to scientists’ prior warnings frustrates Van Aalst, who is worried by the pace of the escalating damage. “We are seeing worst-case scenarios known about 10 years ago, that we had feared might happen several decades on, already playing out right now,” he said.

Is there any reason for hope? Perhaps the world will finally realise that acting now is far cheaper than not. “The impacts are so much more expensive than anything we would do to mitigate them,” said Otto.

The following is related to that.

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Indeed, this is super-important, and is one of the most significant distortions in a field notably distorted. Economic forecasts have been done on a set of highly unrealistic assumptions, generating mild forecasts. But what is really dangerous is that the folks opposing climate action don’t care about the environment, or the impact on the poor, or moral obligations for future generations: they only care about money. So they look at the economic forecasts and go, meh, seems not so bad.

Other studies have shown that the amount of work actually done on climate change in mainstream economics is shockingly little. Of course there are alternative economists. But I saw a study (sorry can’t find it now) of the ten most cited economics journals, and they found that there were only a handful of articles that addressed climate change at all. And of those, at least one had been proven incorrect.

It’s a mistake, I think, for activists to justify action on climate change using economics. It conveys the impression that economics is a science with principles and objective reality, like climate science. But it isn’t. It’s a game. And they make the rules. We’re like tourists sitting down at a table in Vegas, convinced we can beat the house at their own game. They smile and nod, and deal the cards, encouraging us because they know there is really only one rule that matters: the house always wins.

I’m not saying that we should ignore the economic dimension. I’m saying that we should fight for what is right, and let the money people figure out how to pay for it.

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Meanwhile:

What a perfect metaphor.

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Do you think the law of supply and demand isn’t objective Bhante?

I’m not saying that we should ignore the economic dimension. I’m saying that we should fight for what is right, and let the money people figure out how to pay for it.

That would be via greater tax revenue, which would require growing the economy, or via government borrowing and so higher debt.

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You are thinking too narrowly about the problem. It’s essentially the need for the economy to be reorganized to use different systems and energy sources. The government doesn’t have the be the primary payor of the costs. It does ultimately have to make the economy reorganize itself in some fashion to fix the problem. The private economy has plenty of capital in the investment system to pay for that. There’s so much money sitting in the investment system they don’t know what to do with it all, at this point.

What investment system(s) are you speaking of?

I too was going to ask what you had in mind. As ever the devil is in the details.

Just fyi, because of fiat money, there are no monetary/financial constrains on most modern governments. Governments create money through national budgets and destroy money trough taxes.

Or in other words, a government can pay for whatever is priced in the currency that government controls.

Like, we (humans) can do whatever we want if there are resources and energy available. We aren’t constrained by little pieces of papers with numbers on them; we invented those :slight_smile:

We are constrained by resources. Money is there as a means to deal with those resources. Those resources have to be collected and allocated somehow. Barter is one way, but it’s quite a clumsy system. Having money as the bearer of the value is more efficient. Either way, barter or money, the law of supply and demand will still be operating if there is a market. You could try abolishing the market, but as we have seen planned economies are grossly inefficient at balancing supply and demand. Regarding the state, borrowing large amounts of money can have a negative impact. Mortgage rates is one example.

There are though of course things the state can do. I’m very much in favour of building more nuclear power satiations, and providing more funds for nuclear fusion reactor research.

There is an interesting dynamic around this with the recent passing of the so-called “inflation reduction act” (IRA) in the US. Actually the IRA includes a lot of things in its $B 700 to do with reducing carbon emissions and other environmental concerns. It’s a mixed bag, because it also provides billions in new subsidies for fossil fuels at a time when oil companies are getting record profits.

But what’s interesting is the approach behind it, which is occasioning a sort of professional chest-thumping among political scientists as opposed to economists. Previous efforts to make such major legislation in the US have been based on essentially economic grounds: a carbon tax or other forms of economic leverage. All these are ultimately grounded in the prestige of economics as a discipline, which tells us that these methods are the simplest and most efficient ways to effect change in a market economy. Pull the invisible levers the right way, get the effect you want.

But a series of articles by political scientists in recent years has challenged this orthodoxy and shifted the focus from economics to the psychology of power: how do you persuade people to get on the same page? And the fundamental answer to that is simple: identify a common interest. Like, say, reducing inflation. Climate change is a complex phenomenon, and political action in a democracy must listen to and balance the competing interests of constituents, which can’t be reduced to an abstract economic incentive.

This is ultimately why this bill managed to get the support, albeit reluctant, of the right-wing Democrats who have formerly opposed climate action. To be sure, they still did what they could to spoil the bill and protect the profits of the fossil fuel companies who pay them. But, as depressing as it may be to admit it, that has always been the reality of politics.

If there is to be any successful legislation to address climate change, then the bare minimum must be that it exists. Make no mistake: the IRA is a crippled and compromised piece of legislation, which relies on fantasies of CCS, and is endorsed by Exxon and opposed by multiple environmental groups. But crippled and compromised is, apparently, the best hope we have. As the thunderclouds of apocalypse gather, even an inadequate reduction of CO2 emissions is better than an increase.

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Does that hold thought Bhante? Over here in the UK we are experiencing high inflation, which is eroding living standards. Everyone want’s it to end, but in the end the solutions have to be economic in nature. Currently the Bank of England has increased interest rates to record highs to try to reduce it. We also currently have a Tory leadership contest based heavily on how to get inflation under control. Both are proposing economic solutions. For example Liz, who I will likely be voting for as leader, wants to tackle it via tax cuts and supply side economics. Another economic solution to an economic problem. Now, climate change isn’t inherently an economic problem. It’s an environmental one, but the solutions to it have to take into account economic realities. Economics is a weak science, I grant, but there are still fundamental economic laws to be obeyed. I’m not really sure what solutions would be acceptable to you, but I think increasing demand for renewables would be a good thing. More demand, the lower the price and the further demand increases. I’m not a free-marketeer Tory, so I’m happy with the government giving subsidies and other economic incentives to the renewable sector and, in the interim, nuclear to stimulate this but there has to be a limit as to how much the state provides. The economy is essential to this issue, and it has to be born in mind. Ruin the economy and something more insidious can arise, or worse still society can fall apart.

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Not to mention, printing more money does not help reduce inflation. Over the past 50 years my country has slowly ran itself into becoming the Mickey Mouse Club!

But now we’re off topic, so i digress. :grin:

I’m not sure what you’re commenting on here, but just in case: that isn’t what the IRA does. What it does is tax the rich and spend it on things worth doing.

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Indeed. In fact, it’s the exact opposite of “printing money,” in the sense that the IRA is taxing more than it’s spending. It’s a massive deficit reduction. Hence the name, “Inflation Reduction” :roll_eyes:

IMO, one of the weird effects of economic theory is how it allows you to look at the world in a way that is completely divorced from physical reality.

Like, how the fact that the rising price of energy is the simplest explanation for inflation. It’s just physics/chemistry/biology that everything – all activity, all systems – requires energy to do anything. If energy becomes more expensive, of course, every thing must become more expensive.

Even “technology” is mostly just about substituting stuff with energy. E.g., self-checkouts require vastly more calories than human cashiers, who only need a few thousand calories a day to live.

How many hundreds or thousands of years could a hunter-gatherer society live on the calories that have gone into creating “AI”-robots to handle customer service? The amount of energy that goes into computer, server farms, etc. is astounding. Just think about bitcoin miners using more energy than entire countries today.

I feel like the most important job of economic theory is to blind us to the fact that we live in, and depend causally on, the natural world. It constructs a fantasy world (like game of thrones) where we can ignore the laws of thermodynamics.

The idea of “can we afford to adapt to climate change” seems so perverse to me. It’s like, yes, we want to live, but have you considered that It CoSts MoNey To LiVe :crazy_face:

Anyway, rant over :stuck_out_tongue: :cowboy_hat_face:

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Not just physical reality, but human reality. I’m rather tired of the statement that “capitalism brought us prosperity”, when it was actually knowledge and collaboration.

Market economies are a way of organising knowledge and collaboration.

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