Richard Tol, a European-based academic, is one of the pre-eminent environmental economists of our time, but he is not well known in the U.S. When the politicized “Stern Review” came out from the UK government in 2006 claiming that economic damages from climate change were already substantial, it cited Tols’ work several dozen times, prompting Tol to say that if a first year graduate student had submitted the Stern Review as a paper he would have flunked the student, so shoddy was its economic analysis. The Stern Review seemed to try to sneak Tols’ work in as a way of bolstering its weak claims.
Like Roger Pielke Jr., Tol does not dispute the fundamental account of climate change, and he has participated as an author of the last four IPCC reports. In fact last year Tol wrote this:
“There is no doubt in my mind that the literature on climate change overwhelmingly supports the hypothesis that climate change is caused by humans. I have very little reason to doubt that the consensus is indeed correct.”
But Tol doesn’t bow slavishly to climate orthodoxy, and hence he is savaged as a “climate denier,” etc. Tol has an important article out in the current issue of The American Interest that is worth the entire read, but here are some relevant excerpts:
The precautionary principle thus enjoins that we should work hard, if not do our utmost, to avoid even the slim possibility of catastrophe. This logic works fine for one-sided risks: We ban carcinogenic material in toys because we do not want our kids to get cancer. Safe materials are only slightly more expensive, and there is no likely or even imaginable “upside” to children having cancer. Climate policy, on the other hand, is about balancing risks, and there are risks to climate policies as well as risks caused by climate change. Sharp increases in energy prices have caused devastating economic recessions in the past, for example. Cheap energy fueled the industrial revolution, and lack of access to reliable energy is one factor holding back economic growth in most developing countries. In the short run, we rely on fossil fuels to keep us warm and keep the lights on, to grow our food, and to purify our drinking water. So there is a cost to human well-being in constraining fossil fuel use.
What this means is that, instead of assuming the worst, we should study the impacts of climate change and seek to balance them against the negative effects of climate policy. This is what climatologists and economists actually have done for years, but their efforts have been overshadowed by the hysteria of the Greens and the Left, and the more subtle lobbying of companies yearning for renewables subsidies and other government hand-outs. It is especially important to maintain an objective attitude toward the tradeoff between possible dangers and the costs of policy, because estimating the impacts of climate change has proven to be remarkably hard. Past climate change is not much of a guide. The climate supposedly changed much less over the previous century than it is projected to do over the current one, but global mean surface air temperature has barely moved over the past two decades—and this is the period with the best data, in which almost all climate change impact studies have been done. . .
Understanding what the science of climate does and does not enable us to do readily in a policy vein is hard enough for some people. If one adds to that a requirement to know some basic economics, a good number of deeply concerned people appear to be rendered completely incapable of anything we should wish to bless with the term “thought.” And indeed, many an otherwise intelligent economist has lost his marbles when confronted with global warming.