…. Others argue that the impacts of climate change are largely unknown but may be catastrophic. The precautionary principle thus enjoins that we should work hard, if not do our utmost, to avoid even the slim possibility of catastrophe. This logic works fine for one-sided risks: We ban carcinogenic material in toys because we do not want our kids to get cancer. Safe materials are only slightly more expensive, and there is no likely or even imaginable “upside” to children having cancer. Climate policy, on the other hand, is about balancing risks, and there are risks to climate policies as well as risks caused by climate change. Sharp increases in energy prices have caused devastating economic recessions in the past, for example. Cheap energy fueled the industrial revolution, and lack of access to reliable energy is one factor holding back economic growth in most developing countries. In the short run, we rely on fossil fuels to keep us warm and keep the lights on, to grow our food, and to purify our drinking water. So there is a cost to human well-being in constraining fossil fuel use.
… The economic case for emission reduction is thus remarkably simple and robust. We only need to argue that in the long run unabated climate change will do more harm than good. If so, we need to start moving away from using fossil fuels. The question is therefore not whether there is an economic case for climate policy; it’s how much emission reduction can be justified at given losses to social welfare. To answer that question, we need to understand the size of the impacts of climate change. The current evidence, weak and incomplete as it may be, as summarized by the Intergovernmental Panel on Climate Change, suggests that moderate warming—say, what we might expect around the year 2075—would make the average person feel as if she had lost 0.2 to 2.0 percent of her income.In other words, a century worth of climate change is about as bad as losing a year of economic growth. In other words, a century worth of climate change is about as bad as losing a year of economic growth.
… Climate change is a problem, but at least as an economics problem, it is certainly not the biggest problem humankind faces. The euro crisis knocked off a third of the income of the people in Greece in five years’ time. Climate change does not even come close. And the people of Syria wish their problems were as trivial as those of the Greeks. Climate change is not even that large compared to other environmental problems. Urban air pollution kills millions of people per year in Asia. Indoor air pollution kills millions of people per year in Africa. The health problems related to climate change are unlikely to cause similar carnage before the end of the century.
… Speaking of the poor: Poorer countries are notably more vulnerable to climate change than richer ones. They tend to have a larger share of their economic activity in areas that are directly exposed to the weather, particularly agriculture. Poorer countries often lack access to modern technology and institutions that can protect against the weather; for example, air conditioning, malaria medicine, crop insurance. Poorer countries may lack the ability, and sometimes the political will, to mobilize the resources for large-scale infrastructure—irrigation and coastal protection, for example.
Bangladesh and the Netherlands are two densely populated, low-lying countries at risk from flooding by river and sea. Bangladesh is generally seen to be very vulnerable to climate change, whereas most think that the Netherlands will be able to cope; the Netherlands is famous for thriving below sea level, after all. The Netherlands started its modern, large-scale dike building program only in 1850. Before that, dike building was local, primitive, and not very effective: The country was regularly plagued by devastating floods. In 1850, the Netherlands was only slightly richer than Bangladesh is now, but Bangladesh now of course has access to much better technology than the Netherlands did then.
However, the main difference between the Netherlands in 1850 and Bangladesh in 2014 is political. In response to the European Spring of 1848, the Netherlands adopted a new constitution in 1849 that introduced a powerful central government broadly representative of the population (or rather, the male Protestant part of the population). The new Dutch government promptly went after public enemy number one: floods.
Bangladesh is one of the most corrupt countries in the world, and its political elite is more interested in partisan fights and self-enrichment than in the well-being of its citizens. Floods primarily hurt the poor, who live near the river and the coastal flats where land is cheap. There is no political reason to protect them; after all, floods are thought to be an act of Allah rather than a consequence of decisions made or not made by incompetent and indifferent politicians. As long as this is the case, Bangladesh will be vulnerable to climate change.
In the worst projections, climate change could cut crop yields in Africa by half. At present, subsistence farmers often get no more from their land than one-tenth of what is achieved at model farms working the same soil in the same climate. The immediate reason for the so-called yield gap is a lack of access to high-quality seeds, pesticides, fertilizers, tools, and things like that. The underlying causes include a lack of access to capital and product markets due to poor roads and insecure land tenure. Closing the yield gap would do more good sooner than climate change would do harm later. If one really wants to spend money to help farmers in Africa, one should invest in the land registry rather than in solar power.
Indeed, modernizing agriculture in Africa would also make it less vulnerable to climate change. African farming is particularly vulnerable, because isolated, undercapitalized farmers struggle to cope with any change, climatic or otherwise. Infectious diseases illustrate the same point. There were outbreaks of malaria in Murmansk until the 1920s. Sweden suffered malaria epidemics in the 1870s, and the disease was endemic in Stockholm. George Washington did not want the new capital to be built in the estuary of the Potomac because of the malaria risk. Nowadays, malaria only occasionally returns to these places by plane, and it rarely kills.
Largely as a consequence, malaria has become a tropical disease. Many fear that climate change would spread malaria because the parasite is more vigorous in hot weather and mosquitoes thrive in hotter and wetter places. However, in the rich world, habitat reduction, mosquito control, and medicine long ago tamed malaria. Mosquitoes need warm, still-standing water to breed. As we roofed houses, paved roads, and drained wetlands, their habitats disappeared. Clouds of DDT helped bring about the demise of the mosquito as well. Malaria medicine stops one from getting (seriously) ill, and from infecting others.
These things cost money. A dose of malaria medicine costs $100—small change in the United States but a fortune in South Sudan. Therefore, malaria is first and foremost a disease of poverty. We can spend our money on combatting greenhouse gas emissions, reducing malaria risks for future generations. We can also spend our money on insecticides and bed nets, reducing malaria risks today. We can also invest in medical research. A malaria vaccine holds the prospect of a world free of this awful disease, regardless of climate. If our resources were unlimited, we could do all things worthwhile. With a limited budget, we should focus on those investments with the greatest return.
These three examples—of coastal protection, agriculture, and malaria—show that development and vulnerability to climate change are closely intertwined. Slowing economic growth to reduce climate change may therefore do more harm than good. Concentrating the reduction of greenhouse gas emissions in rich countries will not solve the climate problem. And slower growth in rich countries means less export from and investment in poor countries.
There is an even more direct link between climate policy and development. Cheap and abundant energy fueled the industrial revolution. Sudden increases in the price of oil caused many of the economic recessions since World War II. Lack of (reliable) electricity retards growth in poor countries, not just today through its effect on production, but also in the future, as electric light allows kids to do their homework after sunset.
A fifth of official development aid is now diverted to climate policy. Money that used to be spent on strengthening the rule of law, better education for girls, and improved health care, for instance, is now used to plug methane leaks and destroy hydrofluorocarbons. Some donors no longer support the use of coal, by far the cheapest way to generate electricity. Instead, poor people are offered intermittent wind power and biomass energy, which drives up the price of food. But the self-satisfaction environmentalists derive from these programs does not put food on poor peoples’ tables.
In sum, while climate change is a problem that must be tackled, we should not lose our sense of proportion or advocate solutions that would do more harm than good. Unfortunately, common sense is sometimes hard to find in the climate debate. Desmond Tutu recently compared climate change to apartheid.1 Climate experts Michael Mann and Daniel Kammen compared it to the “gathering storm” of Nazism in Europe before World War II.2 That sort of nonsense just gets in the way of a rational discussion about what climate policy we should pursue, and how vigorously we should pursue it.