Monday, November 1, 2010

How should we respond to a small risk of catastrophe?


I try to remember to pay house insurance premiums. Otherwise, I tend to avoid thinking about small risks of catastrophe. There are plenty of other things to worry about.


This avoidance strategy usually helps me to maintain a positive state of mind - atleast, until someone manages to ambush me with the thought of how dreadful it would be if one of those catastrophes actually occurred.

The last time such an ambush had a lasting impact on me was in March this year when I was reading ‘The Science of Liberty’ by Timothy Ferris. This book contains an excellent discussion of the historical links between liberty and the advance of knowledge. I tend to trust Tim Ferris’ judgement on scientific matters. (I have previously written about his book here.)

The Science of Liberty: Democracy, Reason, and the Laws of NatureTim Ferris’ discussion of the science of climate change begins in a fairly low key fashion until he reaches the point where he suggests that greenhouse gases generated by human activity constitute the most plausible explanation for the gradual increase in the earth’s average temperature since the beginning of the 20th Century. Then, in the following paragraph, he proceeds to suggest progressively less benign consequences of further global warming until, at the end of the paragraph, he mentions the possibility of runaway warming. The next paragraph reads:

On which point it may be useful to contemplate Venus, the brightest planet in the sky. Venus is virtually Earth’s twin – the two planets have the same diameter and the same mass – but while much of the earth’s carbon is bound up in its oceans and plants and in fossil fuels like coal, oil and natural gas, the carbon on Venus resides in its atmosphere. The surface temperature on Venus is 457 degrees Celsius, hot enough to melt led. Should the earth be pushed into runaway greenhouse warming, it might wind up resembling the Venus of today’ (p. 282).

This wasn’t the first time I had heard about the possibility that Earth’s future could be like Venus. On previous occasions, however, it was obvious that scare tactics were being employed and my defences were activated well before the Venus card was played.

Cartoon by Nicholson from "The Australian" newspaper: www.nicholsoncartoons.com.au

The Rational Optimist: How Prosperity EvolvesI was reminded of Tim Ferris’ invitation to contemplate Venus while reading ‘The Rational Optimist’. Matt Ridley, the author of this book, adopts a very different position. He begins the discussion by mentioning Martin Weitzman’s argument that if there is some possibility of a huge disaster resulting from global warming, the world should take steps to avoid it. He then suggests that the problem with this reasoning is that it applies to all risks, including the remote possibility of collision with a large asteroid.

I agree with Robin Hanson’s view, in his review of Ridley’s book, that some action may be warranted to reduce the potential impact on human well-being of any potential catastrophe. How we should respond should depend on the nature of the potential catastrophe, the probability that it will occur and what can be done to avoid it.

How should we respond to the small risk of runaway global warming? A fairly obvious answer is to put a tax on carbon emissions in order to provide incentives for development of technologies that generate less CO2, accompanied by an appropriate subsidy for activities that remove CO2 from the atmosphere. In many countries it would be possible to do this at little or no economic cost by substituting a carbon tax for other taxes that impose greater economic distortions. It is important to emphasize, however, that the main aim of the exercise should be to put in place incentives for development of better technologies.

Matt Ridley makes a strong case that climate mitigation is currently being mismanaged and that this mismanagement could be more damaging to human well-being than climate change itself. By encouraging a return to the medieval practice of using biofuels as an energy source, governments have added to misery in poor countries by raising the price of grains and have provided incentives for the further destruction of rainforests. In addition, incentives for greater use of costly wind and solar technologies are raising the cost of electricity substantially and/or requiring substantial subsidies from taxpayers, for little benefit in terms of reduction in CO2 concentrations in the atmosphere.

It is possible that solar technology will become competitive at some time in the future, but subsidizing use of current solar panel technology will not make that happen. If solar panel technology ever becomes competitive it will not need to be subsidized to enable scale economies to be achieved.

I think the current mismanagement of climate mitigation is attributable to scare tactics and panic. Some of us have grown so accustomed to environmental scare tactics that we find it difficult to take seriously the idea that a small risk of catastrophe is worth considering. Others have been too easily panicked into supporting costly policy responses that seem to be directed toward reducing CO2 as rapidly as possible irrespective of cost. The outcome of these conflicting forces in Australia has been a policy to encourage increased use of existing renewable energy technologies that are still highly inefficient. This policy achieves only a small reduction in CO2 emissions per additional dollar spent. (My test of how genuinely concerned enironmentalists are about reducing CO2 emissions in the short term is whether they are in favour of the nuclear power option, which seems to be the best alternative to use of fossil fuels that is presently available. )

There are signs now emerging that people in Australia are becoming concerned about the cost of rising energy prices attributable to the silly policy of encouraging greater use of high cost renewable energy. Hopefully similar concerns in other countries will result in adoption of sensible strategies to encourage development of less costly technologies over the next few decades.

2 comments:

magsx2 said...

Hi Winton,
I'm a Global Warming skeptic. I can remember in the 70's the big scare of Global Cooling, in the 80's the ozone layer, and the list goes on.

I think this time the "powers that be" have hit pay dirt. Everyone is making Billions of Dollars out of this, if your a scientist, all you have to do is mention Climate Change and all of a sudden you are getting Millions in research funds. The only people not making money is the average person, it is costing us all, after all it's the Governments that are giving away the money, which happens to be from the tax payer.

Saying all of that, yes I agree sooner or later we will have to find another energy source, as nothing lasts forever. But at this moment in time, there is really nothing that can produce the amount of energy we need. As time goes on this I assume will change, and someone will have discovered something completely different.

I'll take the chance, and put in a couple of links, and hope you retrieve it from your spam.

Roy Spencer. Ph.D.
http://www.drroyspencer.com/2010/10/bottom-falling-out-of-global-ocean-surface-temperatures/

I hope you take the time to have a bit of a look at his site.

On the point of Carbon Trading, I'm hoping against hope that this never happens here. The Government was talking around the $20 a ton mark on Carbon (a tax on the air) but what they are not telling everyone is what it is actually worth on the stock exchange in Chicago.

http://www.chicagoclimatex.com/market/data/daily.jsf

Winton Bates said...

Hi Mags
I have read a fair amount of the science of climate change. I think the views of people like Richard Lindzen, Fred Singer and Roy Spencer should be taken more seriously.
At this stage, however, I don't see that anyone has a particularly strong basis to be confident about what is or isn't likely to happen.
However, the policy problems is that there is a plausible mechanism under which runaway global warming could occur and a small risk that it might happen. So I think it is wise to take some precautions to ensure that we have substitutes for fossil fuels and some low cost ways of reducing CO2 concentrations in the atmosphere - just in case.
Perhaps we should also be thinking about how we should prepare for the next ice age. It might be good to keep some reserves of fossil fuels that we could burn to warm the place up a bit!