The Rising Tide

So the Obama administration has released a climate forecast, according to which Miami could be under water by the end of the century. Apparently we’re supposed to be very concerned about that.

To put this in perspective, we’ve currently got about 140,000,000 square miles of ocean on this planet — about 71.066% of the earth’s surface. Add Miami’s 35 square miles and that goes up to 71.066007%. You could add all of South Florida and barely notice the difference.

Here’s what Jeff Goodell of Rolling Stone says about that:

Of course, South Florida is not the only place that will be devastated by sea-level rise. London, Boston, New York and Shanghai are all vulnerable, as are low-lying underdeveloped nations like Bangladesh. But South Florida is uniquely screwed, in part because about 75 percent of the 5.5 million people in South Florida live along the coast.

What Mr. Goodell appears to overlook is that of the 5.5 million people now living in South Florida, approximately zero will be alive a hundred years from now, and those that are will presumably have had the sense to move inland well before the water reaches their breastbones.

And what about all the buildings and the other infrastructure? That will also mostly all be gone in a hundred years, with or without the rising sea. How many buildings these days are built to last a century? We already know that Miami’s beachfront hotels are going to deteriorate and then be rebuilt over the course of the century. The only question is where.

This leaves alarmists like Mr. Goodell sitting squarely between the horns of a dilemma: Rising oceans either are or are not a virtual certainty. If rising oceans are not a virtual certainty, then it is time to stop claiming that they are. If rising oceans are a virtual certainty, then it is also a virtual certainty that nobody is going to stick around to be submerged by them. Either way, the situation is less alarming than the alarmists want you to believe.

I am sure there is an intelligent and thoughtful discussion to be had about the costs and benefits of potential climate change. A discussion that starts from the premise that all change must be disastrous — in other words, the discussion that the president (and apparently Mr. Goodell) wants to have — is not that discussion. If your mission is to make people serious about these issues, a good first step is to stop being so damned unserious.

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69 Responses to “The Rising Tide”


  1. 1 1 Salim

    If people do want to stay in South Florida and the seas do rise, we’ve had the technology to allow them to do so for several hundred years. It even uses green energy. http://en.wikipedia.org/wiki/Flood_control_in_the_Netherlands

  2. 2 2 Brian

    I doubt we can expect anyone to get serious about these issues because doing so would require them to admit that it’s much ado about nothing, at least on time scales that any of us really care about.

    Wow, the Rolling Stone article you linked is awful. A 1-foot rise by 2030 with another foot per decade after that? Given that sea-level rise at Miami is 2.4 mm per year, that scenario is nothing but a bizarre fantasy. The reality is that, even if sea level does rise enough to destroy Miami in its current location, no one will be there several hundred years from now when it happens.

    Later in the article, it points out how expensive desalination plants are for supplying drinking water. Well, yeah. And if the cost gets prohibitive, people will move away, right? It seems like the free market has this well in hand.

  3. 3 3 Jason

    Seems pretty blithe about having to relocate entire cities on the century time scale.

    Also, storm surges (whose damage is amplified by sea level rise) will surprise people before they move. You know, like Hurricane Sandy did.

  4. 4 4 Andrew Cooper

    ‘What Mr. Goodell appears to overlook is that of the 5.5 million people now living in South Florida, approximately zero will be alive a hundred years from now.’

    This is interesting – do all Floridians die before they reach 100 years of age or are Florida’s centenarians exiled to other states? Here in the UK there are record numbers of centenarians but we do have a ‘free’ National Health Service.

    I would imagine that, regardless of the failings of the USA’s healthcare systems, quite a few Floridians will still be alive 100 years from now. Or perhaps one doesn’t qualify as a Floridian until one is over ten or so years old?

  5. 5 5 maznak

    Nice point from Steven. Few more points: there is currently a 17 year period of non-warming that none of the “scientific” models have predicted. Are they therefore falsified? I would be tempted to say so. Also, raised C02 is great for plants and increses agricultural yields, making the planet greener. Next, even if there is substantial warming, there may be some positive impacts to offset the negative ones. What if the net effect is positive (remember the medieval “climatic optimum” when Greenland was green and good for farming)? Last, I would certainly like an extra 2 degrees Centigrade in my rather cold country.

  6. 6 6 Daniel

    Okay, so there’s the sea level rise, and perhaps the damaging effects of this are being exaggerated right now. My bigger concern is for crop yields and setting off a positive feedback loop that devastates many ecosystems faster than they can adapt. I think most economists that have actually taken the time to run the cost-benefit analysis have seen large net negative effects of allowing current carbon emissions to continue at the same levels without interruption.

    So if a politician looks at these huge projected costs across the board and realizes that this non-imminent threat to our planet should be acted on, the question then becomes how to motivate the populace to mitigate carbon emissions. Talking about the dangers to crop yields is a little less effective than stating that entire cities will be under water, so the politician chooses the latter to talk about. The question we should be asking is, is it immoral to lie or omit relevant information when communicating with the public in order to achieve a desirable outcome?

  7. 7 7 Daniel

    @Maznak,

    No, the planet hasn’t stopped warming 14 years ago:
    http://www.skepticalscience.com/global-warming-stopped-in-1998.htm

    and there’s plenty of evidence that agricultural increases will be far outweighed by agricultural decreases if the most recent scenario estimations are to be believed:
    http://www.skepticalscience.com/global-warming-positives-negatives.htm

  8. 8 8 maznak

    Daniel, we can start trump each other with links and we will get nowhere.

  9. 9 9 Daniel

    @ Maznak,

    Then why even mention what you mention if it’s so easily rebutted with scientific evidence. You should just say that you’re uncertain about which evidence is to be believed rather than make a declarative statement.

  10. 10 10 Brian

    ” I think most economists that have actually taken the time to run the cost-benefit analysis have seen large net negative effects of allowing current carbon emissions to continue at the same levels without interruption. ”

    Daniel,

    Nope. Economist and IPCC author Richard Tol specializes in this issue and his work has been summarized as follows:

    “There are many likely effects of climate change: positive and negative, economic and ecological, humanitarian and financial. And if you aggregate them all, the overall effect is positive today — and likely to stay positive until around 2080. That was the conclusion of Professor Richard Tol of Sussex University after he reviewed 14 different studies of the effects of future climate trends.

    To be precise, Prof Tol calculated that climate change would be beneficial up to 2.2˚C of warming from 2009 (when he wrote his paper).”

    (http://www.spectator.co.uk/features/9057151/carry-on-warming/)

    The best estimate from economics is that global warming is likely to be a net benefit as long as warming stays under 2 C. Also, note that although the IPCC still expects Earth to warm by 3 C or so with a doubling of CO2, the most recent estimates in the literature predict warming at 2 C or less. In other words, although long-term warming may have net costs, it will take a long time for that to happen, and it may never happen, depending on what effect technological advanced have on future CO2 emissions.

  11. 11 11 Roger

    Krugman’s column last week started by saying that nothing could be done about Antarctica ice sheets melting, and then attacked Marco Rubio for saying that nothing could be done about it.

  12. 12 12 iceman

    Daniel – “is it immoral to lie or omit relevant information when communicating with the public in order to achieve a desirable outcome?”

    I would say the issue there is the standard by which something is to be deemed objectively “desirable”? If merely one’s own omniscience, then I guess one can justify using any untruths or half-truths (presuming one even needs to bother with getting the masses to vote the “right” way).
    A preferred alternative is to view dialogue as a path to better understanding, and define something as desirable if lots of other people would in fact desire it, if accurately informed. In which case your mission should properly be viewed as accurately informing them.

    Personally I think this is too important and complex an issue to lose people by taking positions that are seen as unnecessarily extreme. This includes creating the impression that any type of change (hotter, colder, wetter, dryer) is captured within the theory. Something that includes everything is a non-theory.

  13. 13 13 Daniel

    @Brian,

    Okay, there is a range of scenarios. The worst outcomes have an upper-bound of 4 degrees C by the end of the century

    http://www.climatechange2013.org/images/report/WG1AR5_Chapter01_FINAL.pdf

    Further Richard Tol is careful to say this as a caveat:

    ‘the considerable uncertainty about the economic impact of climate change and that negative surprises are more likely than positive ones’

    And this is right in his conclusion:

    “This pattern suggests that the European Union may be placing too high a price on carbon emissions, while the United States is placing too low a price on such emissions”

    In other words, even if we accept the current evidence for costs on climate change (which he believes are more likely to be too conservative rather than too liberal), the United States was still placing too low a price on such emissions in 2009.

  14. 14 14 Michael

    Simply, there are two possible positions. Either climate change is now, as we are told, irreversible or there is something we can do about it.

    In the latter case it is worthwhile doing something. Reducing population over time, cutting carbon emissions and worldwide adoption of a humbler lifestyle are all options.

    In the former case we can forget all the above. Climate change is an ineluctable reality: all we can do is adapt to it. It then becomes imperative to go in for serious hard engineering works (flood defences, desalination, irrigation…) so that earth might continue to support human life on the scale we now have. If that involves increasing energy use and carbon emissions, that might be a price worth paying.

    This choice had better be made soon, and on sensible scientific/technical grounds. This is not an issue where politics of any sort can play a useful part.

  15. 15 15 Kirk Taylor

    Conservatives want my children to drown due to global warming and Liberals want them to be crushed by staggering government debt. Good thing I’ll be dead.

  16. 16 16 Brian

    Daniel,

    Yes, Tol is correctly saying that the downside risks are potentially larger than the upside benefits. He also is using the standard warming scenarios given by the IPCC to determine economic outcomes. But those scenarios are now (5 years later) much less likely to be accurate. As I said, latest peer-reviewed estimates of the equilibrium climate sensitivity are all around or under 2 C for a doubling of CO2. This makes an overall positive outcome much more likely. The collapse of carbon markets everywhere strongly suggests that, in fact, everyone has been placing too high a price on carbon emissions. Lack of progress in reaching international emissions agreements is another clue that the threat is not nearly what people pretend it to be. There’s just no rational way to justify climate action given the current state of the science.

  17. 17 17 Steve Landsburg

    Either climate change is now, as we are told, irreversible or there is something we can do about it.

    These are not mutually exclusive. If climate change is irreversible, there’s still plenty we can — and will — do about it. Moving out of Miami is one of those things.

  18. 18 18 Ted Levy

    I recall David Friedman making a similar point a few years ago, and it remains an excellent point. It should be obvious even to non-economists that there is a substantial difference in the cost of “there will be a 3 foot rise in the sea level around Miami next week” and “there will be a 3 foot rise in the sea level around Miami next century.”

    If anyone remains skeptical, I suggest they look up the sea rise over the LAST century. It wasn’t zero. Should the American people of 1914 spent a lot of time worrying about it?

  19. 19 19 Daniel

    @Brian,

    “There’s just no rational way to justify climate action given the current state of the science.”

    The rational way to justify climate action is to say that although the mean scenario may be in a safe zone, there is a high enough probability that we land in the unsafe negative feedback loop zone, and that will dramatically increase global warming in the next century. The costs are extremely high if we reach the 3.5-4 degree scenario, which is still according to the most recent IPCC report well within the realm of possibility. If these 3.5-4 degree scenarios still have even an x% chance of occurring, and the costs of preventing these more drastic scenarios is a pittance in comparison to the potential very high costs of those higher temperature anomalies (i.e. (x%*cost of higher temperature scenarios-(1-x%)*benefit of lower temperature scenarios > cost to prevent higher temperature scenarios), than action is warranted. This is what I believe to be the case, but I’m not a climate science cost-benefit analysis expert so I may be mistaken. Can you link me to where this new science says that these higher degree scenarios are very unlikely?

  20. 20 20 Mike H

    @Brian “The collapse of carbon markets everywhere strongly suggests that, in fact, everyone has been placing too high a price on carbon emissions”

    The price of Carbon pollution permits is a product of demand and supply. Demand is set by the economy, but supply is artificial – set by governments today, not set by the people of 2070 who have to deal with the consequences of our pollution.

    Ideally, governments set the supply correctly to match the desires of people living in 2070.

    For you to suggest that Carbon markets are getting the price right indicates a faith that governments are getting it right. Given the recent track record of the US and Eurozone governments on other issues, I’d suggest you can’t deduce anything much from the collapse of the carbon markets.

  21. 21 21 Brian

    Mike H.,

    The demand today reflects the expectation that the market has for the future cost of carbon use. It’s not clear how far ahead the markets can look, but the collapse of carbon trading indicates no available information suggesting that offsets and the like will bring a positive return. In other words, if there were in fact any information suggesting that carbon costs are currently undervalued, we would see that reflected in a robust carbon trading market.

  22. 22 22 Brian

    Daniel,

    Here is a blog link that summarizes recent work. My provision of the link does not imply endorsement of the blog views; merely that it provides a handy summary (see the third graphic).

    http://wattsupwiththat.com/2014/03/05/the-lewis-and-crok-exposition-climate-less-sensitive-to-carbon-dioxide-than-most-models-suggest/

    The summary is from the Global Warming Policy Foundation (GWPF), which includes folks like Richard Tol and Judith Curry as academic advisors. They say

    “The new report suggests that the inclusion of recent evidence, reflected in AR5, justifies a lower observationally-based temperature range of 1.25–3.0°C, with a best estimate of 1.75°C, for a doubling of CO2.”

    The listed range is the 5% – 95% confidence level, meaning that an equilibrium warming has only a 2.5% chance of exceeding 3 C. Keep in mind also that equilibrium warming would take many centuries, if not millennia, to reach. The transient climate response has an upper range around 2 C. This implies no significant likelihood of exceeding 2 C in the next century.

    I would like to point out that timing is everything. No matter how catastrophic a 4 C temperature rise might appear to be, it is of no consequence if it takes 500 years to get there. I am confident that in several hundred years, even if absolutely nothing special is done, humanity will have left behind the carbon-based energy economy and that the technological cost of adaptation or mitigation AT THAT TIME will be utterly puny. By contrast, acting now for very little benefit (because we don’t have the technological capacity to do much now) will be very costly. Contrary to what you might imagine, nothing we do will be a pittance. And even if it were, one can’t simply look at direct costs but at the opportunity costs as well. The resources are much better spent at lifting the world out of poverty now so we can harness the creative capacities of 7+ billion people for future solutions.

  23. 23 23 GabbyD

    “How many buildings these days are built to last a century?”

    Arent they supposed to last long?

    moreover, aren’t cities supposed to exist longer than a century?

    All the major US cities are older than 100 right? Same for any other country…

  24. 24 24 Harold

    The first thing to say is that we can try to reduce global warming and we can try to mitigate the effects. It is likely that neither will happen to the optimum extent if the facts are misrepresented. The scientific position of sea level rise is pretty clear – levels will rise. Every article and blog that cherry picks the evidence to mislead readers into believing that climate change is not happening or is much less than expected is preventing both mitigation and harm reduction.

    I think a key aspect to the adaptation response is encapsulated by the selection of discount rate for evaluating the social cost of carbon. Current economic thinking is apparently to discount at a low rate, below market rates. Thgis increases the evaluated social cost of carbon. Any market led adaptation will be set by the actual market rates. There are reasons for thinking that trans-generational cost / benefit analysis should use a lower rate – I think Stern for example used a very low rate. Now if these reasons are valid, then the market will never give sufficient adaptation.

    “If rising oceans are a virtual certainty, then it is also a virtual certainty that nobody is going to stick around to be submerged by them.”

    As pointed out above, it does not creep slowly up a millimetre at a time. It is likely that storm surges will bring the damage, and these may occur very infrequently. Even if people are not slowly submerged under the waves the costs could be vast. It is difficult to envisage a slow migration of Manhattan. The whole place either survives or fails as a whole. The alternative will be building sea defences as people argue that the city must be saved. Upgrading the defences around New Orleans alone cost a staggering $15 billion. Imagine that around every coastal city in the world. I think this is where the discount rate comes in. The developers will not relocate Manhattan because they discount over short periods, whereas there is a view that longer periods should be looked at for long-term effects. I am not sure exactly how this fits together, but I am sure there is something important going on here.

    The possible beneficial effects of a 2°C rise are a bit of a red herring, because it will be impossible to stop the rise at this point. If we wanted to stop at 2°C we need to cut back on current emissions. Without this further future rises are “baked in”. A bit like the chap jumping off the building as saying “All right so far” half way down.

    Michael at 14 poses stark alternatives, but they are false choices. Some climate change is inevitable, but the extent can be altered. And for that portion that is inevitable we can adapt, but only if we acknowledge it is happening. It is not an all or nothing thing.

    Brian – the climate sensitivity stuff you are quoting is an example of misinformation designed to minimise the perceived effects. It does no good for either reducing emissions OR planning to adapt to the changes. By all means argue for adaptation rather than greenhouse gas reductions – there may be a good case. But by trying to avoid emission reductions buy minimising the problem you also reduce the ability to adapt. I will look at the data in a second post.

  25. 25 25 Harold

    Brian: “Here is a blog link that summarizes recent work”. This is not really correct. The blog post makes it clear that this only uses information already considered by the IPCC in the AR5 report. So this is not newer research that provides new information, but an alternative interpretation of the same evidence. You have to ask yourself why you prefer to believe this one rather than the IPCC one. Is it because you think these two individuals are better able to interpret the data, or because their conclusions happen to fit better with what you want to believe?

    The Global Warming Policy Foundation is a secretly funded charity set up to challenge global warming. It has faced accustaions of repeatedly misrepresenting climate science. There does not seem to be particularly good reason to prefer the report from this institution than the IPCC. http://www.independent.co.uk/environment/climate-change/lord-lawsons-climatechange-think-tank-risks-being-dismantled-after-complaint-it-persistently-misled-public-8659314.html

    There have been more recent studies of climate sensitivity- one published in Nature by Steven Sherwood rejects the possibility of the lower estimate in the AR5, and says climate sensitivity is at least 3°C. He says of the GWPF report “The report is standard cherry-picking. It offers no new evidence not already considered by the IPCC, relying very heavily on a few strands of evidence that seem to point toward lower sensitivity while ignoring all the evidence pointing to higher sensitivity.”

    Real climate says “Other estimates that have come in since AR5 (such as Schurer et al.) support ECS values similar to the CMIP5 mid-range, i.e. ~3ºC”

    All in all, very little reason to accept that climate sensitivity is less than 2°C.

  26. 26 26 AMT buff

    @16 Brian, the collapse of carbon permit markets could indicate that the market believes that government permit policy will evaporate before the polar ice caps melt. There’s nothing to stop any government from freezing enforcement, making permits worthless.

    Carbon permit markets are built on a foundation of government promises: promises which are less credible than the simplest climate models.

  27. 27 27 Kirk Taylor

    It is also quite possible that in the next 100 years we will have more than two alternatives to respond to increasing global temperatures.

  28. 28 28 Michael Stack

    Professor Landsburg,

    The bit about percentages of the earth covered by water seems irrelevant to me. If I told you I was going to kill 70,000 people tomorrow, you might object. But, if I told you – “hey, instead of 100% of the population being alive tomorrow, it’ll only be 99.999%”, I doubt you’d find that persuasive.

  29. 29 29 Ben Stinson

    Thank you for supplanting fear mongering with logic–especially on an issue that is debated less on science than it is on trepidation.

  30. 30 30 maznak

    I am rather a sceptical agnostic, when it comes to these matters. But this is an economic blog, after all, and I wonder: there is a lot of money at stake, for everybody involved. Both the “consensus” scientists (who would certainly see a radical tapering of their research grants, if they happened to admit that the AGW is not such a big deal, after all) and also arguably the “anti-AGW” scientists, who are maybe on the payroll of hydrocarbon companies. So far, I have seen more disturbing stuff on the AGW side (Al Gore movie, Pachauri conflict of interests, climategate, “peer pressure” etc). Also, these folks are mostly relying on computer models the inner workings of which is not always publicly available and open to peer or public criticism (I may be wrong here). As someone who was and still ocassionaly is involved in financial planning and analysis, I can only say that computer models are very dangerous toys. Back to the money at stake: people respond to incentives, and that is a fact many times proven. I do not believe that scientists are immune from that. That simply cannot be the case. Therefore I would suggest to wait what happens, if anything. And focus on mitigating the effects, if necessary.

  31. 31 31 maznak

    If one of the main problems is sea-level rise, it will ccertainly not happen overnight. It will rather happen in the timescale of generations. And next generations very often not stay in their parent´s house anyway. I am sure you see my point.

  32. 32 32 Eric

    “All the major US cities are older than 100 right? Same for any other country…”

    Actually, it depends on what you mean. Here’s a table of the 50 largest cities in 1996 as well as two others who, at one time, had more than 400,000 people. The number is the percentage of the U.S. Population that resided in that city. I have numbers for every decade from 1910 to 1990 (it would be nice to have 2000 and 2010 which I could get if needed but would only make things more dramatic, i.e. Detroit and New Orleans). People migrate a lot in the U.S. Several cities have 0.0 as recently as 1910.Las Vegas was incorporated as a city in 1911. Phoenix had 11,134 people in 1910. (see wikipedia). People move …

    City Max Min Difference
    New York 5.64% 2.94% 2.70%
    Chicago 2.74% 1.12% 1.62%
    Philadelphia 1.72% 0.64% 1.08%
    Los Angeles 1.40% 0.35% 1.06%
    Detroit 1.27% 0.41% 0.86%
    Houston 0.70% 0.09% 0.62%
    St. Louis 0.74% 0.16% 0.59%
    Cleveland 0.75% 0.20% 0.55%
    Boston 0.73% 0.23% 0.50%
    Pittsburgh 0.58% 0.15% 0.43%
    San Diego 0.45% 0.04% 0.40%
    Baltimore 0.69% 0.30% 0.40%
    Phoenix 0.39% 0.01% 0.38%
    Buffalo 0.48% 0.13% 0.35%
    Dallas 0.42% 0.10% 0.32%
    Washington 0.53% 0.24% 0.29%
    San Jose 0.31% 0.03% 0.28%
    Newark 0.39% 0.11% 0.28%
    San Antonio 0.38% 0.11% 0.27%
    Cincinnati 0.39% 0.15% 0.25%
    Minneapolis 0.38% 0.15% 0.23%
    San Francisco 0.51% 0.29% 0.22%
    Milwaukee 0.47% 0.25% 0.22%
    Jacksonville 0.25% 0.06% 0.19%
    New Orleans 0.38% 0.20% 0.18%
    Long Beach 0.19% 0.02% 0.17%
    Memphis 0.31% 0.14% 0.17%
    El Paso 0.21% 0.04% 0.16%
    Austin 0.20% 0.03% 0.16%
    Miami 0.16% 0.01% 0.16%
    Virginia Beach 0.16% 0.00% 0.16%
    Kansas City (MO) 0.32% 0.17% 0.15%
    Tucson 0.16% 0.01% 0.15%
    Tulsa 0.16% 0.02% 0.14%
    Albuquerque 0.15% 0.01% 0.14%
    Charlotte 0.16% 0.04% 0.12%
    Fort Worth 0.20% 0.08% 0.12%
    Fresno 0.14% 0.03% 0.12%
    Nashville 0.21% 0.10% 0.11%
    Atlanta 0.27% 0.16% 0.11%
    Oklahoma City 0.18% 0.07% 0.11%
    Indianpolis 0.36% 0.25% 0.11%
    Honolulu 0.16% 0.06% 0.11%
    Oakland 0.25% 0.15% 0.10%
    Seattle 0.31% 0.21% 0.10%
    Las Vegas 0.10% 0.00% 0.10%
    Sacramento 0.15% 0.05% 0.10%
    Denver 0.28% 0.19% 0.09%
    Colorado Springs 0.11% 0.03% 0.09%
    Portland (OR) 0.25% 0.16% 0.08%
    Columbus 0.27% 0.20% 0.07%
    Omaha 0.18% 0.13% 0.05%

  33. 33 33 Eric

    By the way, they are sorted by “Difference”, the difference between the minimum and maximum of pct of U.S. population in that city, not by current (or 1996) population.

  34. 34 34 GabbyD

    @Eric

    my point is largely that people expect cities to be long-lived right?

    people can net-migrate out of say NY, but they expect NY to STILL EXIST, right? surely there’s a value to that — beyond simply the population of people who live there.

  35. 35 35 Steve Landsburg

    Michael Stack:

    The bit about percentages of the earth covered by water seems irrelevant to me. If I told you I was going to kill 70,000 people tomorrow, you might object. But, if I told you – “hey, instead of 100% of the population being alive tomorrow, it’ll only be 99.999%”, I doubt you’d find that persuasive.

    But if you told me that people seem to be just fine with killing many times 70,000 people, that would suggest that they should also be just fine with your killing another 70,000. Likewise, if the earth is 70% water *and people seem just fine with that*, I think we’re allowed to infer that another 35 square miles should be pretty much okay too.

  36. 36 36 Steve Landsburg

    GabbyD:

    people can net-migrate out of say NY, but they expect NY to STILL EXIST, right? surely there’s a value to that — beyond simply the population of people who live there

    I think you are quite missing the point. I have no idea whether NY will continue to exist in its current location. Migrating out of New York, and abandoning the that location to the ocean, would be costly. But it wouldn’t be nearly as costly as *staying* in New York, continuing to add the infrastructure, and then sticking around while the oceans wash you and all your belongings away.

    If we want to have an honest discussion about the costs of climate change, it makes perfectly good sense to talk about what we’d have to sacrifice if we abandoned New York. It is just plain silly to talk (as the Rolling Stone article did) about what we’d have to sacrifice if we stayed in New York and drowned there, because that’s not what would happen.

  37. 37 37 Harold

    I would be interested in opinions about the discount rate point I raised in #24. If a lower discount rate than market interest is appropriate for long term evaluation, then market solutions will never provide an adequate solution since they use market rates. If a lower discount rate is not appropriate, then what are the economists who say it is doing?

    I agree with Michael Stack that the amount of Earth covered with water is not really the point. It is which bits, and lots of those new bits will be where we currently have cities. If we were to use a more relevant statistic – the percentage of people who live in an area threatened by rising sea- then we get a much larger percentage.

    #36. There is a problem with the idea that people will move out of New York in a cost effective way. Part of that might be down to the discount rate thing. Part of that is the amount of noise there is playing down the science – Maznak @30 falls into this trap – “Therefore I would suggest to wait what happens, if anything. And focus on mitigating the effects, if necessary.” If you wait to see what happens you are not focusing on mitigation – you are ignoring information. If we want New York to be somewhere else in 100 years time we need to start incorporating that into our plans now. Part of it is fallacies that people fall into – sunk costs fallacy, optimism, comfirmation bias etc. I don’t think there are many common errors of reasoning that would result in too much adaptation, but lots that would result in too little. Put all this together and it seems unlikely that the market will arrive at optimum solution on its own.

  38. 38 38 maznak

    Harold: ” If we want New York to be somewhere else in 100 years time we need to start incorporating that into our plans now. ”
    The main point is, why should we have any preference, whether we want NY to be somewhere else? I would leave it up the the New Yorkers, whether they want to move and where. And nothing stops them from doing so. Another (political) matter is, do we want to compensate (part of) their loss from abandoning some of the real estate there? I suggest not, those of them who feel that rising sea level is a potential problem still have a plenty of time to negotiate with the insurance companies.

  39. 39 39 Eric

    @Steve Landsburg @35:

    Exactly. Here’s a chart dividing the number of people in the city in 1990 by the maximum between 1910 and 1990. I’ve not included those cities for which 1990 was the maximum. Again, adding 2000 and 2010 will only increase things. Apparently, St. Louis, Cleveland, Pittsburgh and Detroit were significantly evacuated within 80 years. I assume it was in a cost-effective fashion since it was done through the voluntary choices of millions of individuals, each of whom thought it was in his or her best interest to relocate (and, as far as I can tell, was not climate related in any of those cases). Market prices will move people out of Miami and New York slowly over years and decades if it becomes necessary. As for abandoned cities, I care about people not places.

  40. 40 40 Eric

    Oops, chart now included:

    St. Louis 0.463243874
    Pittsburgh 0.546528804
    Cleveland 0.553005464
    Detroit 0.555675676
    Buffalo 0.565517241
    Newark 0.622171946
    Minneapolis 0.704980843
    Boston 0.716604245
    Cincinnati 0.722222222
    Washington 0.756857855
    Philadelphia 0.765444015
    Chicago 0.768848384
    Baltimore 0.774736842
    New Orleans 0.791401274
    Atlanta 0.795959596
    Milwaukee 0.847503374
    Kansas City (MO) 0.857988166
    Denver 0.908737864
    Seattle 0.926391382
    New York 0.927431611
    San Francisco 0.934193548
    Memphis 0.956656347
    Oakland 0.966233766
    Omaha 0.988472622
    Indianpolis 0.991858887

  41. 41 41 Ken Arromdee

    While coastal cities like Miami may only be a tiny percentage of the world’s land area, they are a larger percentage of the world’s population, since people tend to build near water.

    Furthermore, even if you’re only concerned about land area flooded and not population flooded, it’s not *just* coastal cities that would be flooded; it’s coastal cities and a whole strip of thinly inhabited land at the same elevation as the coastal cities. It goes unmentioned because most people are concerned about population, but if you’re concerned about land area, you have to count it rather than compute only the land area of the cities and point out that it’s a small percentage of the total land area of the world.

  42. 42 42 Harold

    #38 How about if I re-phrase it as if it will be most efficient to have New York relocated in 100 years time? The point is that correct action cannot be taken without correct information. Steve said “But it wouldn’t be nearly as costly as *staying* in New York, continuing to add the infrastructure, and then sticking around while the oceans wash you and all your belongings away.” If there is going to be sea level rise but people do not believe it then they will stay in New York and continue to add to the infrastructure for much longer than they should, then the oceans will wash it all away, which will be much more costly than it could be.

    Looking a bit more at discount rates. One problem with market rates is that they do not reflect people actual behaviour. Most will prefer $100 now than $103 in a years time, so we could say the discount rate is more than 3%. But they also prefer £103 in 21 years time rather than $100 in 20. This leads to parabolic discounting, where there is no fixed discount rate. However, this assumes we will change in the future – in 20 years time we will be more patient than we are today. This suggests that we should spend as much to save our great grandchildren as our children, but it also suggests that we should put off doing anything until a bit later, when we are more patient than we are now. None of the discounting methods is entirely satisfactory.

  43. 43 43 nobody.really

    What relationship does the destruction of buildings have to the destruction of the value of real estate — especially Miami real estate? And what relationship do people’s lifespans have to the destruction of this value?

    If I put up a billboard across the street from your house saying “In 100 years I will destroy any building accross the street from me, kill anyone living there, and pretty much eliminate any value in land short of oil drilling” I suspect it might depress the resale value of your property. If government were to announce that it was converting all fee simple real estate into life estates — that is, the government would claim title upon the death of the curent occupants — I suspect it would have an even greater effect. Would Landsburg be equally sanquine? If not, why should it make a difference if the agent causing private parties to lose the value of her real estate is a private individual, a government, or society?

    This discussion seems to be premised on an idea that some poeple find controvercial. No, I don’t mean climate change; I mean property rights.

    Some people seem to regard property rights as absolute and inviolate — and real estate as providing archtypical example of property rights. Yet this discussion seems to be premised on the idea that society can choose to redress the damage it causes to privately-owned real estate … or not.

  44. 44 44 Brian

    Harold (#24 and 25),

    Thanks for your responses. I would like to respond to some of the things you said that in my view are inaccurate.

    “the climate sensitivity stuff you are quoting is an example of misinformation designed to minimise the perceived effects.”

    No, nothing I’ve said is intended to misinform. If you think I’ve made inaccurate or irrelevant statements, please point out the specific statements. Nor have I said anything for the purpose of minimizing “perceived effects.” My statements about climate sensitivity are scientific judgments (yes, by me) base on the data. I’m just trying to get the science right, not minimize or downplay anything. Please don’t attribute intention without clear evidence.

    You say “The possible beneficial effects of a 2°C rise are a bit of a red herring, because it will be impossible to stop the rise at this point. If we wanted to stop at 2°C we need to cut back on current emissions. Without this further future rises are “baked in”. A bit like the chap jumping off the building as saying “All right so far” half way down.”

    No, this is inaccurate. Suppose we determine the equilibrium climate sensitivity to be 2 C for a doubling of CO2. This means that even if we keep increasing CO2 levels all the way up to 560 ppm and then stop, Earth’s temperature (over hundreds of years) would eventually rise 2 C and no more. We would never leave the beneficial range. I know that this long, slow rise is what you mean by “baked in,” but we don’t need to do anything to keep Earth’s temps in the beneficial range. We are still very far from 560 ppm and have a lot of time for the global energy economy to evolve on its own. What matters is not our current rate of emissions but the ultimate level at which CO2 stabilizes.

    With regard to the blog link I gave, you quote me “Here is a blog link that summarizes recent work” and then say: “This is not really correct. The blog post makes it clear that this only uses information already considered by the IPCC in the AR5 report. So this is not newer research that provides new information, but an alternative interpretation of the same evidence. You have to ask yourself why you prefer to believe this one rather than the IPCC one.”

    You obviously paid very little attention to what I actually said, which was “My provision of the link does not imply endorsement of the blog views; merely that it provides a handy summary.” In other words, I like the graphic and it nicely summarizes all recent work (since 2011). Yes, it is using only recent peer-reviewed papers that were used in AR5. Do you object to that? Nor does the specific interpretation of the GWPF matter. Why? Because AR5 says the same thing in more obscure language.

    If you look at AR5, you will see that the IPCC gave a larger range for the equilibrium climate sensitivity (ECS) than in previous reports, 1.5 – 4.5 C. More importantly, THEY REFRAINED FROM GIVING A CENTRAL ESTIMATE. Why? Because the overall data is not internally consistent. AR5 says that they chose not to give a central estimate for the ECS because of “a lack of agreement on values across assessed lines of evidence.” What this means is that estimates of the ECS based primarily on CMIP models give numbers around 3 C (just like the Sherwood paper you mention) while estimates based primarily on global temps are much lower (< 2 C). Because of these systematic disagreements, the IPCC was no longer comfortable giving a central estimate. But note that they gave a central estimate of 3 C in all other previous reports. This means that the studies done since AR4, which have favored using experimental data over modeling, have been pointing at a lower ECS. And yes, this is partly due to the apparent warming "hiatus" of the last 15 years.

    Let me suggest simply that if the IPCC is not comfortable giving a central estimate in a relatively unimportant publication, we really have no rational basis in the science for altering our economy.

    Finally, your attack on the GWPF, while irrelevant to my points, is misguided. You say "The Global Warming Policy Foundation is a secretly funded charity set up to challenge global warming. It has faced accustaions of repeatedly misrepresenting climate science."

    It is by all accounts neither an alarmist nor a skeptic/denier organization, but one that is made up of "lukewarmers." As such, it gets criticism from all sides and, given the usual tenor of climate debate, has faced many false accusations. Please note, if you care to read your own link, that a single person was accusing the founder of the GWPF of making political statements–these were not statements by the GWPF itself. Little wonder then that this transparent attempt at muzzling a voice they didn't like has ended up going nowhere. A year later the GWPF still has its tax-exempt status. Much ado about nothing. In any case, I think you can help your own side more by refraining from ad hominem attacks and sticking to the climate evidence.

  45. 45 45 nobody.really

    No doubt Landsburg will dismiss this latest US report as alarmist, too.

  46. 46 46 GabbyD

    “But it wouldn’t be nearly as costly as *staying* in New York, continuing to add the infrastructure, and then sticking around while the oceans wash you and all your belongings away.”

    but why is that the comparator? why arent we comparing costs and benefits of:
    A) abandoning NY (or wherever)
    VS.
    B) spending X amount to keep NY existing

    now, the rolling stone article, which you quoted above, can also be interpretated as comparing costs and benefits of (A) vs (B).

    by saying “South Florida is uniquely screwed, in part because about 75 percent of the 5.5 million people…”, the writer is saying that the net benefit of mitigating climate change (and staying put), is *greater* than abandoning South Florida.

    they are NOT comparing it to living in an underwater South Florida.

  47. 47 47 Al V.

    Given that Miami’s population was 0 in 1902, it doesn’t stretch the imagination to think that it could be 0 again in 2126.

  48. 48 48 Al V.

    I live in NYC, 30 feet above sea level. I’m not worried, I don’t expect rising sea levels to affect me in my lifetime. I am advising my children to move to Canada, though. I hope Canada will have them.

  49. 49 49 Harold

    Brian, “Nothing I’ve said is intended to misinform”. I did not say you intended to misinform, but nonetheless I think the information is misleading. For example “Note that although the IPCC still expects Earth to warm by 3°C with a doubling of CO2, the most recent estimates in the literature predict warming at 2°C or less.” In fact, what you mean is that an analysis of the same information used by the IPCC to estimate 3°C has been used by some others and they think it is 2°C or less. It turns out that the reason they think it is 2°C is at least in part because they only considered part of the information and processed it in a slightly controversial way. The people who originated the method themselves say it is not necessarily any more reliable than other methods. Uncertainty cuts both ways. If you want to get the science right you must examine all the relevant papers and come to a judgement based on all the evidence. The Rolling Stone article is equally guilty of using the other end of the scale, the predictions of Hansen which are far greater than mainstream. We should not accept those either.

  50. 50 50 Rodrigo Castalan

    Steve is right, here.

    GabbyD, that comparison is not a rational one, considering the circumstances. Part of Steve’s point is that the notion of the cities ceasing to exist is completely wrongheaded. Perspective on the time scale is perhaps not easy, but absolutely necessary to making accurate judgments on this issue.

  51. 51 51 iceman

    43 – “should it make a difference if the agent causing private parties to lose the value of their real estate is a private individual, a government, or society?”

    Not entirely sure I’m following you, but interesting framing…
    I would say the difficulties of dealing with externalities in terms of property rights IS the argument for government involvement in environmental issues.
    To me the whole purpose of acknowledging such rights — where possible — is so we can talk about specific actions involving specific people, like your examples of murder and vandalism (or threats thereof), or a bureaucratic land grab, as exactly opposed to throwing around charges of what an amorphous “society” does to itself.
    E.g. even if you could somehow credibly identify damages in the (extended) future to your property due to emissions by other identifiable parties (to which you made zero contribution yourself?), your case would seem weakened to the extent your prescience provides its own remedy (i.e. prices do not currently reflect those future losses, as suggested by the debate taking place on this thread).

    Perhaps this is another argument for renting? 

  52. 52 52 Brian

    Harold (#49),

    You say “In fact, what you mean is that an analysis of the same information used by the IPCC to estimate 3°C has been used by some others and they think it is 2°C or less.”

    No, that’s not quite what I said. Please note that the IPCC DID NOT ESTIMATE ANY VALUE for the ECS in AR5; they only gave a range because the various approaches do not agree. Earlier estimates by the IPCC were largely based on computer models, paleo-data, etc. The newer work, since 2011, has tended to focus on the current global data with a minimum of modeling because there are concerns that the models have large systematic errors. The GWPF made its estimate based on this newer data alone. The IPCC likely would have made the same estimate about the newer data had they chosen to make any estimate. They chose not to, of course, so the GWPF did it for them. To put it simply, the IPCC and GWPF are saying the same thing, just in different ways.

    Are the newer empirically-based estimates more reliable? It’s hard to say at this point. The IPCC was probably wise to give just a range. But what we can say for sure is the following.

    1) Current models clearly overestimate the warming we are currently seeing. They have significant systematic errors that need to be identified. We have no reason trust their long-range scenarios until those errors are fixed.

    2) A low ECS, while not guaranteed, is certainly plausible. The no-feedback result for doubling CO2, 1.2 C, is uncontroversial, freshman-level physics. Low or modest positive water-vapor feedback would give an ECS in the 1 – 2 C range, exactly what we see from the empirically-based estimates. The models can only be correct if the water-vapor feedback is high.

    3) Even if the ECS is 3 C or higher, only a portion if that will be observed by 2100, since equilibrium happens over centuries or even millennia. It follows, then, that global temperatures are likely to stay in the beneficial range (<2 C) for the duration of the 21st century. In the absence of further evidence, any other scenario is implausible.

    The bottom line is that the climate catastrophism observed in some circles is not currently supported by the scientific evidence. That some scientists have refrained from saying this publically is more reflective of their own inertia and turf-protecting than it is of the actual science.

  53. 53 53 Daniel

    @ Brian,

    “No, that’s not quite what I said. Please note that the IPCC DID NOT ESTIMATE ANY VALUE for the ECS in AR5; they only gave a range because the various approaches do not agree”

    So then we have a rational reason for increasing the price of carbon emissions. Because of substantial uncertainty about the affects that doubling carbon in the atmosphere will have on warming the planet we should price carbon to reflect this uncertainty. It should not be as high a price as if we had a more certain central estimate around 3 degrees, but it should still not be $0 additional tax to price the in the possible externality. There is very substantial upside risk if we are undershooting our estimates, and not so substantial benefits if we are overshooting on our estimates.

  54. 54 54 nobody.really

    If I put up a billboard across the street from your house saying “In 100 years I will destroy any building across the street from me, kill anyone living there, and pretty much eliminate any value in land short of oil drilling” I suspect it might depress the resale value of your property. If government were to announce that it was converting all fee simple real estate into life estates — that is, the government would claim title upon the death of the current occupants — I suspect it would have an even greater effect. Would Landsburg be equally sanguine? If not, why should it make a difference if the agent causing private parties to lose the value of her real estate is a private individual, a government, or society?

    [E]ven if you could somehow credibly identify damages in the (extended) future to your property due to emissions by other identifiable parties (to which you made zero contribution yourself?), your case would seem weakened to the extent your prescience provides its own remedy (i.e. prices do not currently reflect those future losses, as suggested by the debate taking place on this thread).

    1. So what I contribute to the damage to my own property? Generally speaking, I have the right to damage my own property; you don’t.

    2. It is true that climate change has not affected the cost of real estate? For example, have you tried buying homeowner’s insurance lately?

  55. 55 55 Harold

    Brian: “To put it simply, the IPCC and GWPF are saying the same thing, just in different ways.” No, no, no. They are not saying the same thing. IPCC says ECS may be between 1.5 and 4.5°C. GWPF says it an only be a the lower end of that. However you cannot reduce uncertainty by selecting only those results that give a certain answer, which is what Lewis and Crok have done. The IPCC used all the available data. Crok and Lewis then find reasons to dismiss all those methods that give a high ECS, and do not discuss the shortcomings of the method they use.

    In the earlier Lewis paper (2013) the ECS is completely changed by the addition of an extra 6 years of data. Since ECS is a stable over these time periods, then this is suspicious. The method Lewis uses is based on transient measurements of a system that is not in equilibrium. To obtain equiibrium estimate requires significant assumptions. There is no reason to reject all other methods in favour of this one, which is why the IPCC did not do that.

    If ECS is believed to be lower than it actually is, then there will be too little effort put into emission reductions AND adaptations. if I have a choice to put my next building in Manhattan or somewhere else, I may make a different choice if I think there is no chance of temperature rise over 2°C or if I believe there is a significant chance of higher temperature rises.

  56. 56 56 Brian

    Harold (#55),

    You say “No, no, no. They are not saying the same thing. IPCC says ECS may be between 1.5 and 4.5°C. GWPF says it an only be a the lower end of that.”

    Let me be more explicit. The IPCC and the GWPF are saying the same thing ABOUT THE NEWER, EMPIRICALLY-BASED RESULTS. The IPCC’s comment on those newer results was implicit; the GWPF’s comment was explicit. The GWPF, to the best of my knowledge, is not ignoring the other results. They chose, however, to focus on the newer data in part because some of their people (like Lewis) contributed to it (that could be seen as their bias) but also in part because the IPCC chose not to highlight it explicitly. I’ll note that the IPCC’s choice likely carries its own bias.

    But apart from the issue that both organizations have an issue with bias, I think the IPCC took the right approach in not making a central estimate and in broadening the range. It would not be correct to say that the ECS is definitely or even very likely in the low range. You seem to think the GWPF has claimed this; I don’t agree. Rather, I think they chose to highlight data that the IPCC should have addressed explicitly but did not.

    That said, it IS correct to say, as I did above, that the methods that give high estimates of the ECS clearly have systematic errors that need to be addressed. That makes them of limited use for decision making at this time. The lower estimates are not known to have systematic errors and so can be used with greater confidence.

    One last comment. You say ” if I have a choice to put my next building in Manhattan or somewhere else, I may make a different choice if I think there is no chance of temperature rise over 2°C or if I believe there is a significant chance of higher temperature rises.” What you say is true, of course, but it is of no interest to anyone but you as a builder. You are the one who is making the investment. You stand to lose if you choose wrongly. Your choice as builder, whatever it might be, is of no consequence to public policy nor does it involve any need for carbon taxes and all the rest. And of course, Steve’s original point is still germane. Whatever you do choose is probably inconsequential to you as a builder, because regardless of the scenario, you will be long gone by the time anything happens. And long before such decisions WILL matter to the builder/designer, scientists will have a much better estimate of the ECS. We’re just not at that point yet. So sit back and relax about it until we do! :)

  57. 57 57 Brian

    Daniel (#53),

    You say “So then we have a rational reason for increasing the price of carbon emissions. Because of substantial uncertainty about the affects that doubling carbon in the atmosphere will have on warming the planet we should price carbon to reflect this uncertainty.”

    It depends on what you mean by increasing the price of carbon. In principle the price of carbon in rational markets should be based on cost/benefit analysis performed over the full range of possible outcomes. But the CARBON MARKET SHOULD ALREADY BE DOING THIS, and it should be especially noticeable in the market for future carbon offsets.

    Now, if by “increasing the price of carbon” you mean some kind of government action to artificially increase the price of carbon, the answer is no. Why? Because such action requires political agreement, which requires cooperation, and cooperative action is necessarily reduced under uncertainty.

    The simplest way to see this from a game-theory perspective. Rational players only move to a new strategy if they can unilaterally do better. That’s the basis of the Nash equilibrium, in which all players stay where they are unless they can do better. But uncertainty in the payoff makes it harder to meet the criterion for the equilibrium to break down. Why? Because even if the central estimate suggests a net benefit in going to the new strategy, a wide uncertainty increases the likelihood that the lower tail of the distribution goes below your current payoff, reducing the probability that you make the switch.

    If you didn’t follow the above argument, not to worry. The bottom line is that for rational players to agree on a carbon tax (or something like it) implies that the no-tax equilibrium has broken down and that the carbon tax is the new Nash equilibrium. The likelihood of such a switch occurring is reduced when the payoff uncertainty is large. Uncertainty, in other words, reduces the likelihood of action (= strategy change) for rational players.

  58. 58 58 Harold

    Brian. OK, I say the lower estimate also has problems – there is no reason to reject the higher estimates, so the IPCC range is still the most valid to use, but I think we can leave it there.

    On the other point, if all builders make an inefficient choice it is of concern to the economy, and hence to everyone.

  59. 59 59 Brian

    Harold (#58),

    Fair enough. The lower estimates may have problems, though I’m not aware of what they are. I’d open to hearing what you think the problems are. Also, I agree that the IPCC range is the most valid to use.

  60. 60 60 RJ

    So then we have a rational reason for increasing the price of carbon emissions. Because of substantial uncertainty about the affects that doubling carbon in the atmosphere will have on warming the planet we should price carbon to reflect this uncertainty.

    It depends on what you mean by increasing the price of carbon. In principle the price of carbon in rational markets should be based on cost/benefit analysis performed over the full range of possible outcomes. But the CARBON MARKET SHOULD ALREADY BE DOING THIS, and it should be especially noticeable in the market for future carbon offsets.

    Not necessarily, not even in principle. There’s no reason not to suppose that private benefits are greater than social benefits or private costs are less than social costs or both. In either case, the market price is terribly undervalued.

    That’s the basis of the Nash equilibrium, in which all players stay where they are unless they can do better. But uncertainty in the payoff makes it harder to meet the criterion for the equilibrium to break down. Why? Because even if the central estimate suggests a net benefit in going to the new strategy, a wide uncertainty increases the likelihood that the lower tail of the distribution goes below your current payoff, reducing the probability that you make the switch.

    This isn’t correct either. In a Nash Equilibrium, players stay where they are given the decisions of other players because if they move to another strategy the other players can react and punish the deviating player. Thus, in carbon markets, if a firm can price its carbon produced goods at a low price that benefits the firm while hurting its competitorsand knows that its competitors cannot react, it will do so.

  61. 61 61 iceman

    54 – surely you see the (minor) point that it’s even harder to try to quantify and assign these speculative damages to someone else if you engaged in similar behavior. At best you sue me for my alleged contribution to your property damage, and I file a countersuit against you. At which point we might wisely agree to drop the whole thing. The main point was this is hardly a damning critique of (definable) property rights. The externality involved makes pollution thornier than theft, vandalism or murder. When you find yourself saying things like “the damage society causes to itself” it’s a good sign that you’re playing in a different ballpark.

    BTW your link didn’t mention climate issues, only that insurers did not experience any hurricanes “again” last year. Anecdotally I know some insurers have left FL over regulatory issues (like not being allowed to raise rates after previous loss experiences) which can’t be helping matters now.

  62. 62 62 Floccina

    Some AGW alarmist completely forget about depreciation. When I bring it up to them they deny its relevance who are the deniers now?

  63. 63 63 Daniel

    @Brian,

    I didn’t follow your argument because it’s essentially goblidigook disguised as intelligence as 60 rightly pointed out.

  64. 64 64 Brian

    “I didn’t follow your argument because it’s essentially goblidigook disguised as intelligence as 60 rightly pointed out.

    Daniel (#62),

    Well, at least I’m glad it’s disguised as INTELLIGENCE. It could have been disguised as worse. ;)

    By the way, if you didn’t follow the argument, how do you know it’s gobbledygook?

  65. 65 65 Brian

    RJ (#60),

    You say “In a Nash Equilibrium, players stay where they are given the decisions of other players because if they move to another strategy the other players can react and punish the deviating player.”

    Nope. You need to review the Nash equilibrium again. A Nash equilibrium is a strategy where no player can unilaterally do better. It has nothing to do with whether other players can punish you or not. Think about the Prisoner’s Dilemma. Rational players choose to defect because they can unilaterally do better than with the cooperative strategy. Yet, it’s called a dilemma because they end up getting “punished” by their rational opponent, who also defects on them. According to your version, cooperation would be the Nash equilibrium to avoid punishment.

    You also say “There’s no reason not to suppose that private benefits are greater than social benefits or private costs are less than social costs or both. In either case, the market price is terribly undervalued. ”

    Even if we assume that private benefits > social benefits, I’m not sure how you jump to the conclusion that the price is “terribly” undervalued? It could just be a little undervalued, or not undervalued at all. In fact, under some circumstances, your logic is exactly backwards. Suppose my private benefit > social benefit, but the social benefit still outweighs the social costs. I will be willing to pay some amount approaching my net benefit, which EXCEEDS the social net benefit. Under those circumstances, from the perspective of society as a whole, wouldn’t the market then be overvalued?

  66. 66 66 RJ

    Brian,

    I’m quite aware of what a Nash equilibrium is. There are a few things wrong with your understanding of the concept.

    Here’s a technical definition of Nash equilibrium, as given by Osborne’s “An Introduction to Game Theory” textbook.

    A Nash equilibrium is an action profile a* with the property that no player i can do better by choosing an action different from a*i, given that every other player j adheres to a*j.

    First off, your understanding of why prisoners will ‘snitch’ isn’t correct. They do it because each player has an incentive to ‘free ride’ off what the other player does, even though both prefer the other to keep their trap shut because that’s a better payoff than if they both snitch. Secondly, what the definition I gave above essentially means is the strategy that a player chooses and sticks to is optimal for him/her given their perfect knowledge of the other player’s strategies.

    What you initially described as Nash equilibria above only applies to a very basic and trivial form of the prisoner’s dilemma game. However, in reality, games don’t operate with this perfect level of information nor are they one shot games. In the case of carbon producing firms, they’re playing a repeated game with grim-trigger strategies.

    If you remodel the prisoner’s dilemma in such a way, there are two Nash equilibriums; both prisoners cooperate or both prisoners defect. They cooperate because they get a better payoff than by not cooperating each subsequent game. If one decides to defect at any point for a short-term gain, then they lose in subsequent periods because the other player will always retaliate by defecting and your new Nash equilibrium is both players defect. This is more akin to how carbon producing firms behave.

    So yes, in this case, it has VERY MUCH to do with players punishing defectors.

    In fact, under some circumstances, your logic is exactly backwards. Suppose my private benefit > social benefit, but the social benefit still outweighs the social costs. I will be willing to pay some amount approaching my net benefit, which EXCEEDS the social net benefit. Under those circumstances, from the perspective of society as a whole, wouldn’t the market then be overvalued?

    Yes, this is correct when private benefits > social benefits, I spoke to quickly. Undervaluing occurs when social costs > private costs. However, this detail aside, there is overproduction in either case and resources are misallocated, as is what happens with polluting industries, and society isn’t better off. Private individuals may be acting rational, but that doesn’t mean there is an optimal outcome.

  67. 67 67 Robert

    Actually, real world evidence suggests that despite rising sea levels over the past several hundred years, land mass is GROWING, not shrinking. New York City, Hong Kong, Amsterdam, Tokyo. All of these have significantly more land mass than they did 200 years ago when sea levels were lower. My prediction is that the land mass of southern Florida will be LARGER in 100 years, as the rising value of land incentivizes land reclamation and far overwhelms the tiny predicted increase in sea level.

  68. 68 68 Daniel

    @ Brian 64,

    “By the way, if you didn’t follow the argument, how do you know it’s gobbledygook?”

    Okay let me try to point to where I’m confused by your argument rather than make a condescending statement (sorry about that I was probably mentally tired from work when I posted).

    “In principle the price of carbon in rational markets should be based on cost/benefit analysis performed over the full range of possible outcomes. But the CARBON MARKET SHOULD ALREADY BE DOING THIS, and it should be especially noticeable in the market for future carbon offsets”

    Why should the carbon market already be internalizing the cost of global warming? By what mechanism? It seems like a classic case of externality to me, but I could be mistaken. Bringing up futures for carbon offsets is somewhat unrelated. Again, companies buying these carbon offsets would have to be internalizing the cost of global warming, and this seems like a classic case of tragedy of the commons. One company might think that their actions in internalizing costs will be a good investment down the road, but unless they can get everyone else to agree to it others can increase their carbon consumption in response to their decrease. Taxing carbon emissions provides a convenient way to internalize these externalities to the market for carbon in a way that is enforceable.

    “Now, if by “increasing the price of carbon” you mean some kind of government action to artificially increase the price of carbon, the answer is no. Why? Because such action requires political agreement, which requires cooperation, and cooperative action is necessarily reduced under uncertainty.

    The simplest way to see this from a game-theory perspective. Rational players only move to a new strategy if they can unilaterally do better. That’s the basis of the Nash equilibrium, in which all players stay where they are unless they can do better. But uncertainty in the payoff makes it harder to meet the criterion for the equilibrium to break down. Why? Because even if the central estimate suggests a net benefit in going to the new strategy, a wide uncertainty increases the likelihood that the lower tail of the distribution goes below your current payoff, reducing the probability that you make the switch”

    Which actors are you talking about here? If what you mean is that you don’t think you can get politicians to cooperate in passing the tax, then I think you probably have a case here, but if you’re saying that post taxation you wouldn’t get people to cooperate in reducing carbon emissions than I have no idea what you’re talking about. Are you suggesting that increasing taxes on carbon emissions will somehow not decrease consumption? Again, I need more clarity here to understand what exactly you’re talking about.

  69. 69 69 Daniel

    @ Brian,

    Here’s a pretty fair assessment on the costs to reducing carbon emissions proposed by Obama:

    https://www.uschamber.com/press-release/energy-institute-report-finds-potential-new-epa-carbon-regulations-will-damage-us

    Weighing this against the possible very large net negative costs if we do reach the very dangerous levels of 4 degrees Celsius multiplied by the probability that this will occur, I think it’s not hard to see why a cost/benefit analysis might fall on the side of increasing the price of carbon.

    You’re right that we might not get China and India to go along with us, but once you have the well-oiled machine of our much superior market economy behind reducing emissions in a way that is financially advantageous to market participants(through raising the price of carbon emissions), we’d more quickly develop technologies that China will either steal from us or we can sell to them.

  1. 1 Some Links
  2. 2 A Rising Tide Lifts All Interventionists
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