Apocalypse Soon?

Yale’s Paul Sabin revisits the Ehrlich vs. Simon bet on limits to growth.  His nuanced piece makes many reasonable points.  Towards the end of his piece he says some things that I strongly disagree with.  I know that the readers of this blog will agree with him, so let’s have some fun.  Here is a direct quote which I will “deconstruct” after the fold;

“Mr. Simon liked to argue that new problems prompt solutions that ultimately leave people better off than before. But we cannot surmount our challenges if we simply deny that they exist.

Instead of using science as a resource for human betterment, conservatives who reject the evidence of human-caused global warming prevent the very creative problem-solving that Mr. Simon advocated. And if environmentalists like Mr. Ehrlich hadn’t urged action back in the 1970s, would all that creativity have been channeled into the cleaner air and water that we enjoy today?

We face choices about our future direction. As Mr. Ehrlich and many other environmental scientists have documented, by pouring carbon dioxide into the atmosphere, we put things we value and love in danger, from the coral reefs to the Jersey Shore, from homes threatened by wildfire to farms endangered by drought.

And even if Mr. Simon is right that humans can adapt and prosper on this rapidly changing planet, we have to ask ourselves whether the risks and inequalities of this change are desirable.”

With regards to his quote; “if we simply deny” —- who is this “we”? If 70% of the population acknowledges the challenge of climate change while 30% do not then this may cause political challenges in agreeing to national carbon policy but this doesn’t hinder the free market from searching for adaptation solutions.  In fact, the 70% of potential green entrepreneurs may work even harder to find solutions for climate adaptation because they recognize that the 30% have not adjusted their lifestyle to prepare and thus will be desperate and willing to pay for solutions.   Simon says that there are 7 billion people on the planet.  If 5% of then are solid entrepreneurs then they will work to discover many adaptation ideas.   This is part of the reason that he was a fan of population growth because it gives us a higher chance of creating another Einstein.

In the second paragraph above, Sabin is playing the easy “collective action” point of  “why are the crazy conservatives blocking the carbon tax? Don’t they know that the Clean Air Act cleaned the air?”  This is a crowd pleasing point that is already known.  The better economic point here is to ask what is optimal regulation? Has the Clean Air Act increased air quality too much relative to the marginal costs (middle class lost factory jobs) it imposed?   Sabin needs to think about the marginal benefits and marginal costs of the intensity of regulation not that regulation is a (0,1) variable.

Sabin is correct in his third paragraph about the damage that climate change poses to some spatial assets such as coral reefs and the Jersey Shore.  These are at risk due to climate change.   But, do “we” love them or does  a subset of the population love these assets?  How much do they value them?

In his final point, Sabin worries about the poor and their ability to adapt.  This is a serious challenge but this point is a pinch politically correct.  A smarter point for a Yale man writing for the New York Times would be to ask how the world’s count of poor people will evolve over the next 30 years.  Can we grow rich enough so that individuals in the year 2040 can protect themselves? Will the price of quality adjusted air conditioning and flood proof homes decline enough so that all of the world’s population can afford them?  Will capitalism protect us from what we have unleashed? Sabin wants a risk free life (was he an untenured prof at Yale?). Unfortunately, that world does not exist.  We have created substantial global risk by releasing too much carbon.

Fortunately, many subtle people recognize this and this fact helps to unleash capitalism to find the solutions to the challenge we have created.  As I argued in my 2010 Climatopolis book and in my new 2013 environmental economics textbook, urbanization and innovation and migration and competition will allow us to meet the challenge.   I respect Ehrlich’s Paul Revere gusto.   We are not the Titanic because forward looking scholars such as Ehrlich have alerted us to the challenges we will face.  Future challenges = opportunity and some of the next generation will rise up and create new solutions and this is how we collectively adapt.  Not through collective action but instead through individual pursuit of opportunity.  This is why I embrace Simon.

Author: Matthew E. Kahn

Professor of Economics at UCLA.

44 thoughts on “Apocalypse Soon?”

  1. Will capitalism protect us from what we have unleashed?

    A more honest phrasing would have been:

    Will capitalism protect us from what capitalism has unleashed?

  2. ‘With regards to his quote; “if we simply deny” —- who is this “we”? ‘
    It may be that 70% of the US (or “the West”) accept the reality of Climate Change. But fewer than 5% are willing to accept that there are real limits to population growth. The best you will be able to get out of them is a claim that “well, it could be a problem, but it won’t be because Japan and Italy have negative population growth” or something equally nonsensical.

  3. What “free market”? Those who do not “believe” in global warming include the enormously influential fossil energy sector. Just one of those firms, Koch Industries is very nearly single-handedly responsible for all that consercative “disbelief”

    A market with enormous thumbs on the scales is in no sense “free”.

    Finally, for crying out loud the very existence of the Clean Air Act and the Clean Water Act is undeniable evidence that the “free market” was unable to come up with solutions to air and water pollution. You *seriously* ask whether “the air is too clean” now?? Seriously? Because some capitalists were prevented from destroying the commons just *that* much too much and didn’t realize *quite* the profits they could have with less regulation?

    Seriously?

    1. Quite so. Matthew should consider the possibility – a probability, given the political system from which they emerged – that the Clean Air Act and other current legislation are insufficently tough. Why did it take so long, for instancxe, to cut mercury emissions? Why is there still lead paint anywhere? Why is CO2 still not covered?

  4. Less carbon in the air isn’t a product that can be marketed by cleaver entrepreneurs.

    Try this on: 70% of the people on your block believe it is important to contain and treat their sewage. They organize build and pay to maintain a sewage removal system that their homes are hooked up to. 30% of the people on your block don’t think it is worth the expense and trouble and dump their efluence out into the street.
    So how do you like your life on this block? If only there was some way to get these morons to hook up to the sewer system. Hmmm? But of course we wouldn’t want regulations because SOCIALISM!

    Some stuff is too important to leave up to individual initiative. That’s why we have governments and laws. It ain’t perfect but if it were as bad as the Tea Party folks say, it would have whitherd away long before Karl Marx ever thought up that idea. Human nature, ya know.

    1. I think we have a clear example of the value of collective action in leaded gasoline. You can attribute the elimination of leaded gasoline to public health or environmentalism (I’m not knowledgeable enough of the history to say), but there’s no doubt that it took political action to eliminate the stuff and that individual entrepreneurship wasn’t anywhere near the answer.

      Even if you believe that it was just a matter of time before entrepreneurship solved this problem (and I’m not so sanguine), that time matters! Those are children being poisoned. I think it’s clear that, at least in this case, immediate regulation brought about by political action was superior to individual initiative. (It is worth noting that removing lead from gasoline allowed for initiative in improving gasoline quality without lead. Regulation, often leads to ingenuity as well – and it’s not always the kind where lawyers are involved.)

  5. “…doesn’t hinder the free market from searching for adaptation solutions.”

    Sadly, the “free market” has become the shibboleth of the glibertarians. If you want to be accepted you have to use that phrase at every opportunity, whether or not it’s meaningful in that particular context.

    News flash: The “free market” does NOT search for solutions to problems. The “free market” searches for PROFITS. Fortunately, there are many instances where entrepreneurs figure out how to solve problems and SELL THE SOLUTIONS for a PROFIT.

    News flash number 2: Profits only occur after start-up costs are covered.

    If you are compelled to endlessly repeat the “free market” shibboleth, you can advocate free market solutions to lots of little problems at the margin, but recognition of the real world would never let you say “Can we grow rich enough so that individuals in the year 2040 can protect themselves? Will the price of quality adjusted air conditioning and flood proof homes decline enough so that all of the world’s population can afford them?”

    Substitute “the U.S. population” for “the world’s population” and it’s wishful thinking (aka “delusion”). Talk about the whole world, where the problems are VASTLY worse than they are here, and you’re just spouting meaningless propaganda.

    1. Economists are appallingly bad about thinking about local variation and geography, in general. There are exceptions, but generally speaking it’s one of the discipline’s blind spots.

  6. Kudos to Matthew! A poster trolls his commenters!!!

    He has one trenchant point. “We” is a horrid word in policy discourse. It conflates policy analysts, policy makers, policy targets, and policy bystanders.

    But back to being trolled. Matthew may have forgotten that it was “individual pursuit of opportunity” that created Easter Island. He hasn’t yet convinced me that things are any different today.

  7. Shorter Kahn: it’s a good idea to play Russian Roulette because if the gun goes off
    entrepreneurs will invent and sell you a Kevlar helmet before the bullet hits you.
    And then we’ll all have Kevlar helmets, which will be awesome. Oh and BTW, screw you,
    New Orleans and Jersey Shore, I never liked you anyway.

  8. It’s so great when something bad happens, because it provides an opportunity for more capitalism and that always works. People never die in a fire, because of free markets. Isn’t life wonderful? My mommy told me so.

  9. Anyhow, the analogy between the Ehrlich/Simon bet on commodity prices,
    and the effects on climate change, is massively flawed, and is an
    example of applying standard economic assumptions – e.g. that a small
    change in costs or prices will cause a small change in demand and
    production – to a climate system which in fact is likely to exhibit
    unstable, chaotic, and stateful behavior. You change temperature and
    rainfall patterns up to a point and the results are small; you change it
    a bit further and suddenly you can’t grow wheat in regions which have
    a huge capital investment in wheat-harvesting equipment and wheat storage.
    Once you melt the polar ice caps, the polar oceans absorb more sunlight,
    and the change is impossible to reverse.
    Change temperature further and important species die out – another
    irreversible change.

    A focus on economic analysis is profoundly unhelpful in assessing this
    kind of system. The climate scientists are running around with their hair
    on fire as the evidence gets worse and worse, and I think they have a much
    better understanding of the global implications than the economists do
    (heck, the economists can’t even predict a massive economic event like the
    crash of 2008 6 months ahead of time – they can’t even tell how big it is
    until years after it has happened. They’re *terrible* at prediction).

    1. But this is functionally equivalent to saying, “our climate models are crap”; They are, in many of the critical parameters, just exercises in curve fitting. If the past does not predict the future, if you can’t extrapolate, the models are mostly worthless.

      Remember all that “superstorm!” screaming?

      Atlantic hurricane season – a record-breaking dud?

      Yeah, I think a lot of the modeling is worthless.

      1. Not at all. I’m saying that economic forecasting is pretty clearly crap,
        both on timescales of 6 months into the future, and on timescales of
        decades into the future. Weather forecasting is also crap on a timescale
        beyond about 10 days into the future (but is actually pretty good at
        predicting the size and path of a storm 2-3 days ahead, which is way
        better than economists did with the crash of 2008).

        Global climate prediction, on the other hand, seems to be pretty good these days:
        the stuff they predicted in the 1990s is really happening now. You can’t
        predict the weather in a particular month, or a particular season, with
        great accuracy; but you can predict that global average temperature is going
        to rise, glaciers are going to shrink, polar ice will decline, average
        size and frequency of hurricanes (determined by ocean surface temperature) are
        likely to increase, and sea level will rise. Those are really worrying changes
        with potentially massive consequences, and the uncertainty of climate models,
        such as it is, is a reason to be more alarmed, not less alarmed: there might well
        be 5 bullets in the revolver, not just one. It’s really foolish to act as though
        there are no bullets at all.

        I’d also be interested to know how Kahn interprets the economic and human disaster
        of the 1930s dustbowl – a change in climate patterna causing a catastrophic breakdown
        of food production across a considerable region, in one of the wealthiest and most
        technologically advanced capitalist nations. How did adaptation cope with that ?
        And if that episode is repeated on a global scale, would you be satisfied with a
        similar outcome ?

        1. Glaciers are supposed to be retreating; We’re still coming off the “little Ice Age”, returning to normal inter-glacial status.

          Global temperature increase has been on “pause” for at least a decade, depending on how you measure it. To the point where climate scientists are finding it increasingly hard to explain.

          Ocean levels have been rising at about the current level, (A bit over a mm a year.) since before the big surge in CO2 levels. Makes it kind of hard to pin that on CO2.

          The only people “running around with their hair on fire” are the alarmists, the scientists are currently scratching their heads, as their models approach being 95% confidence wrong.

          Convenient collection of graphs

        2. Global warming? No, actually we’re cooling, claim scientists

          “There has been a 60 per cent increase in the amount of ocean covered with ice compared to this time last year, they equivalent of almost a million square miles.

          In a rebound from 2012’s record low an unbroken ice sheet more than half the size of Europe already stretches from the Canadian islands to Russia’s northern shores, days before the annual re-freeze is even set to begin.

          The Northwest Passage from the Atlantic to the Pacific has remained blocked by pack-ice all year, forcing some ships to change their routes.

          A leaked report to the UN Intergovernmental Panel on Climate Change (IPCC) seen by the Mail on Sunday, has led some scientists to claim that the world is heading for a period of cooling that will not end until the middle of this century.

          If correct, it would contradict computer forecasts of imminent catastrophic warming. The news comes several years after the BBC predicted that the arctic would be ice-free by 2013.”

      2. Shorter Brett: 98% of climate scientists think there’s at least one bullet
        in the gun, but since they don’t all agree on the precise number of bullets,
        it’s perfectly safe to keep playing Russian Roulette.

      3. So Brett, your evidence is that in a normal year, we expect a hurricane by Aug 10th,
        and this year we’ve gone 4 weeks past that without one ? You get 4 weeks of calm
        weather and you think that disproves decades of climate science ?

        Pretty weak, even by your standards.

    2. Another big hole in Kahn’s argument is Africa. 1B people, a paltry 1.6T GDP,
      Already too hot and dry, no land south, fdensely populayed Europe
      To the north. No likelihood of painless adaptation or migration.

      1. Of course, if you’re focused on economic analysis, the answer to Africa is simple –
        it’s only $1.6T of GDP, so it’s not worth worrying about. If you’re an actual
        human being, and have the imagination to grasp that global climate change might
        mean that hundreds of millions of people don’t have clean water to drink
        or food to eat, then those 1B people loom larger. Someone who thinks this is
        about the cost of air conditioning is really missing the big picture IMO.

        I’m also rather appalled by the glib references to “migration”. Large-scale
        migration is usually the consequence of a disaster (both human and economic) that
        has already happened, not an alternative to disaster. The fact that some of the
        population of Ireland were able to emigrate hardly makes up for the calamity of
        the potato famine. And I have no idea what is supposed to happen to the large
        population of sub-Saharan Africa if the equatorial region gets too hot, since
        there is hardly any land a high latitudes in the Southern hemisphere, and Europe,
        already quite densely populated, would have a lot of trouble absorbing hundreds
        of millions of migrants.

        We should also distinguish between migrations which occur when a rising population
        spills over into new territory, leaving the old territory populated and productive;
        and migrations which occur when the old territory becomes unproductive. In the
        latter case, in addition to the human misery of forced migration, there is a massive
        economic loss as people have to abandon decades or centuries of investment in
        land improvements, dwellings, and other immobile capital goods. Migration has a huge
        cost.

  10. Brett: why should anyone care what you think about climate modeling? Do you have any expertise in any aspect of climate modeling?

    1. I have a practical grasp of curve fitting, which is certainly relevant. You can’t hammer on how you can’t just extrapolate past behavior in a system which is chaotic and so forth, and then place your reliance on models which ARE just extrapolations of past behavior.

      So far as I can tell, the climate fear mongers are running around with their hair on fire, as the evidence for their nightmare scenarios gets worse and worse, instead of more clear cut.

      1. If you think that Climate Modelling = curve fitting then the answer is “No, I have ZERO expertise in any aspect of climate modeling”.

        Do you likewise believe that designing a radio is “curve-fitting”? That drug design is “curve-fitting”? That X-ray astronomy is “curve-fitting”?

      2. The models aren’t just extrapolations of past behavior. The computer
        models are based on the complex interactions of various known, experimentally
        verifiable, physical effects. Yes, there’s some “curve fitting” involved
        in choosing which effects are most significant, and how the various effects
        interact. But you make it sound as though the scientists are just drawing
        a temperature curve and extrapolating out 50 years. And that’s not what they
        do at all.

        And the reason why the climate scientists are running around with their hair on
        fire is that many of the changes predicted by their models are happening faster
        than they had expected (or at least the magnitude of the effects is at the
        high end of the range of predictions). On the evidence at the moment, the problem
        with the models is not that they are uncertain, but that they seem to have been
        rather biased towards underestimating the speed of climate change.

      3. Who says climate is chaotic?

        Weather may be chaotic, but it is still predicted with reasonable (not perfect) success in the short term.

        Climate is just long-term weather, over a 30-year or so scale.

        Scientifically, “chaotic” does not mean “incapable of prediction” – even chaotic (in the scientific sense) systems have long term regularities.

  11. I think Fred and Richard make important replies.

    It would be reasonable to sniff at a 70%/30% split in American beliefs about climate change, if we were a pure democracy and were not the largest economy on earth, and if a national carbon policy weren’t a very important part of the solution. But if the 30% have an outsize influence on policy, and can hold up reasonable carbon policy measures for even a decade or two, everybody on earth will have to pay a lot extra to the ingenious entrepreneurs who figure out how to mitigate the effects of our dysfunctional politics.

  12. Then again, capitalism is a race to the bottom in search for profit, by definition. Lots of words and no content, just blind faith in free markets.

  13. Climate Change will ensure that opportunities abound for Capitalist Tools. I think Kahn’s next gig should be leveraging the entrepreneurial disruptions provided by jellyfish:

    http://www.nybooks.com/articles/archives/2013/sep/26/jellyfish-theyre-taking-over/?pagination=false

    Hmm, maybe Kahn already prefers jellyfish to shellfish or finfish. It would certainly make economic sense.

    Final graphs from that link:

    Gershwin leaves us with a disturbing final rumination:

    When I began writing this book,… I had a naive gut feeling that all was still salvageable…. But I think I underestimated how severely we have damaged our oceans and their inhabitants. I now think that we have pushed them too far, past some mysterious tipping point that came and went without fanfare, with no red circle on the calendar and without us knowing the precise moment it all became irreversible. I now sincerely believe that it is only a matter of time before the oceans as we know them and need them to be become very different places indeed. No coral reefs teeming with life. No more mighty whales or wobbling penguins. No lobsters or oysters. Sushi without fish.

    Her final word to her readers: “Adapt.”

    [Russell adds, heh.]

  14. OK, you’re with Simon on his predictions. Does that include his confident claim that population growth can continue for thousands of years without creating problems? The exponential growth at even one percent/year would on that time scale not only increase the human mass to more than that of the Earth but inexorably lead to collapse to a black hole. You’re trusting someone who either could not calculate a simple exponential or thought that economic extrapolations would override the deepest laws of physics. But hey, you know, free market!

    1. Hmmm … a slight exaggeration to make a point.

      At one percent per year, the Earth’s popluation of about 7 billion would grow to about 110 trillion. That sounds like a lot (well, yeah, it IS a lot) but in comparison to the mass of the Earth, it’s still only .0000000015 of the Earth’s mass.

      BTW, in researching this, I came across an interesting [irrelevant] fact: the mass of the Sun is about 1,000 times the mass of Jupiter.

      Just thought you’d want to know.

      1. Ken- I took “thousands” of years to mean up to 10,000. That’s mid-scale, much shorter than the age of our species and somewhat shorter than the age of our main technology- agriculture. e^100 is >10^40. So no, there was no exaggeration. I’ve not got the original Simon quote at hand, so I’m not sure how explicit he was about exactly how long he thought this could go on.

      2. Aha, I haven’t found the specific Simon quote I was remembering, but here’s another relevant one : “In the very long run, more people almost surely imply more available resources and a higher income for everyone.” What does he mean by “the very long run” in this context? Here’s the opening of that article ” This is the economic history of humanity in a nutshell: From 2 million or 200,000 or 20,000 or 2,000 years ago until the 18th Century there was slow growth in population…” So yes, he was completely nuts, no exaggeration.

  15. I do believe that the sufferings we are experiencing today are of our own doing. Human beings have the tendency to be greedy especially when in power. They couldn’t care less what will happen to the world as long as they are rich. Too bad that God’s creation has been reduced to being exploited instead of being used the right way.

  16. Well, the Easter Islanders did not invent new trees after all the existing ones were chopped down, apparently to be used as rollers to pull enormous statues across the landscape. Their high priests and chiefs told them the statues were what was made the island fertile and fish plentiful.

    Instead of an innovative capitalist inventing new materials for rollers and dugouts, there was famine and a population crash with warfare and canniblaism.

    Worse, after white men turned up in ships, no innovative capitalist imported this new technology to sell to his fellow islanders. Instead the ships brought missionaries, disease and slavers who between them reduced the island’s inhabitants to less than a thousand.

    1. The big mistake that the original immigrants to Easter Island may have made is that they brought with them rats that had a fondness for tree seeds.

      1. “famine and a population crash with warfare and cannibalism” – or, as an economist
        would say, “adaptation”.

        BTW, I looked up a bit more about Ireland’s Great Famine of the 1840’s – out of a
        starting population around 8M, roughly 1M died of malnutrition and disease, and
        1M emigrated. So that’s what an economist’s “migration” looks like.

  17. “Mr. Simon liked to argue that new problems prompt solutions that ultimately leave people better off than before.” I’m sure that sometimes happens.

    On the other hand, from a synopsis of “The Space Merchants” by Pohl and Kornbluth: He shrugs off the Consies as nothing but “wild-eyed zealots who pretended modern civilization was in some way ‘plundering’ our planet. Preposterous stuff. Science is always a step ahead of the failure of natural resources. After all, when real meat got scarce, we had soyaburgers ready. When oil ran low, technology developed the pedicab.”

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