[tt] Freeman Dyson: The Question of Global Warming

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Freeman Dyson: The Question of Global Warming
http://www.nybooks.com/articles/21494
[Linked by Arts and Letters Daily.]
Volume 55, Number 10 =B7 June 12, 2008

A Question of Balance: Weighing the Options on Global Warming Policies
by William Nordhaus
Yale University Press, 234 pp., $28.00

Global Warming: Looking Beyond Kyoto
edited by Ernesto Zedillo
Yale Center for the Study of Globalization/Brookings Institution
Press, 237 pp., $26.95 (paper)

I begin this review with a prologue, describing the measurements
that transformed global warming from a vague theoretical speculation
into a precise observational science.

There is a famous graph showing the fraction of carbon dioxide in
the atmosphere as it varies month by month and year by year (see the
graph). It gives us our firmest and most accurate evidence of
effects of human activities on our global environment. The graph is
generally known as the Keeling graph because it summarizes the
lifework of Charles David Keeling, a professor at the Scripps
Institution of Oceanography in La Jolla, California. Keeling
measured the carbon dioxide abundance in the atmosphere for
forty-seven years, from 1958 until his death in 2005. He designed
and built the instruments that made accurate measurements possible.
He began making his measurements near the summit of the dormant
volcano Mauna Loa on the big island of Hawaii.

Concentration of Carbon Dioxide in the Atmosphere

He chose this place for his observatory because the ambient air is
far from any continent and is uncontaminated by local human
activities or vegetation. The measurements have continued after
Keeling's death, and show an unbroken record of rising carbon
dioxide abundance extending over fifty years. The graph has two
obvious and conspicuous features. First, a steady increase of carbon
dioxide with time, beginning at 315 parts per million in 1958 and
reaching 385 parts per million in 2008. Second, a regular wiggle
showing a yearly cycle of growth and decline of carbon dioxide
levels. The maximum happens each year in the Northern Hemisphere
spring, the minimum in the Northern Hemisphere fall. The difference
between maximum and minimum each year is about six parts per
million.

Keeling was a meticulous observer. The accuracy of his measurements
has never been challenged, and many other observers have confirmed
his results. In the 1970s he extended his observations from Mauna
Loa, at latitude 20 north, to eight other stations at various
latitudes, from the South Pole at latitude 90 south to Point Barrow
on the Arctic coast of Alaska at latitude 71 north. At every
latitude there is the same steady growth of carbon dioxide levels,
but the size of the annual wiggle varies strongly with latitude. The
wiggle is largest at Point Barrow where the difference between
maximum and minimum is about fifteen parts per million. At
Kerguelen, a Pacific island at latitude 29 south, the wiggle
vanishes. At the South Pole the difference between maximum and
minimum is about two parts per million, with the maximum in Southern
Hemisphere spring.

The only plausible explanation of the annual wiggle and its
variation with latitude is that it is due to the seasonal growth and
decay of annual vegetation, especially deciduous forests, in
temperate latitudes north and south. The asymmetry of the wiggle
between north and south is caused by the fact that the Northern
Hemisphere has most of the land area and most of the deciduous
forests. The wiggle is giving us a direct measurement of the
quantity of carbon that is absorbed from the atmosphere each summer
north and south by growing vegetation, and returned each winter to
the atmosphere by dying and decaying vegetation.

The quantity is large, as we see directly from the Point Barrow
measurements. The wiggle at Point Barrow shows that the net growth
of vegetation in the Northern Hemisphere summer absorbs about 4
percent of the total carbon dioxide in the high-latitude atmosphere
each year. The total absorption must be larger than the net growth,
because the vegetation continues to respire during the summer, and
the net growth is equal to total absorption minus respiration. The
tropical forests at low latitudes are also absorbing and respiring a
large quantity of carbon dioxide, which does not vary much with the
season and does not contribute much to the annual wiggle.

When we put together the evidence from the wiggles and the
distribution of vegetation over the earth, it turns out that about 8
percent of the carbon dioxide in the atmosphere is absorbed by
vegetation and returned to the atmosphere every year. This means
that the average lifetime of a molecule of carbon dioxide in the
atmosphere, before it is captured by vegetation and afterward
released, is about twelve years. This fact, that the exchange of
carbon between atmosphere and vegetation is rapid, is of fundamental
importance to the long-range future of global warming, as will
become clear in what follows. Neither of the books under review
mentions it.

1.

William Nordhaus is a professional economist, and his book A
Question of Balance: Weighing the Options on Global Warming Policies
describes the global-warming problem as an econ-omist sees it. He is
not concerned with the science of global warming or with the
detailed estimation of the damage that it may do. He assumes that
the science and the damage are specified, and he compares the
effectiveness of various policies for the allocation of economic
resources in response. His conclusions are largely independent of
scientific details. He calculates aggregated expenditures and costs
and gains. Everything is calculated by running a single computer
model which he calls DICE, an acronym for Dynamic Integrated Model
of Climate and the Economy.

Each run of DICE takes as input a particular policy for allocating
expenditures year by year. The allocated resources are spent on
subsidizing costly technologies--for example, deep underground
sequestration of carbon dioxide produced in power stations--that
reduce emissions of carbon dioxide, or placing a tax on activities
that produce carbon emissions. The climate model part of DICE
calculates the effect of the reduced emissions in reducing damage.
The output of DICE then tells us the resulting gains and losses of
the world economy year by year. Each run begins at the year 2005 and
ends either at 2105 or 2205, giving a picture of the effects of a
particular policy over the next one or two hundred years.

The practical unit of economic resources is a trillion
inflation-adjusted dollars. An inflation-adjusted dollar means a sum
of money, at any future time, with the same purchasing power as a
real dollar in 2005. In the following discussion, the word "dollar"
will always mean an inflation-adjusted dollar, with a purchasing
power that does not vary with time. The difference in outcome
between one policy and another is typically several trillion
dollars, comparable with the cost of the war in Iraq. This is a game
played for high stakes.

Nordhaus's book is not for the casual reader. It is full of graphs
and tables of numbers, with an occasional equation to show how the
numbers are related. The graphs and tables show how the world
economy reacts to the various policy options. To understand these
graphs and tables, readers should be familiar with financial
statements and compound interest, but they do not need to be experts
in economic theory. Anyone who knows enough mathematics to balance a
checkbook or complete an income tax return should be able to
understand the numbers.

For the benefit of those who are mathematically illiterate or
uninterested in numerical details, Nordhaus has put a
nonmathematical chapter at the beginning with the title "Summary for
the Concerned Citizen." This first chapter contains an admirably
clear summary of his results and their practical consequences,
digested so as to be read by busy politicians and ordinary people
who may vote the politicians into office. He believes that the most
important concern of any policy that aims to address climate change
should be how to set the most efficient "carbon price," which he
defines as "the market price or penalty that would be paid by those
who use fossil fuels and thereby generate CO[2] emissions." He
writes:

Whether someone is serious about tackling the global-warming
problem can be readily gauged by listening to what he or she says
about the carbon price. Suppose you hear a public figure who
speaks eloquently of the perils of global warming and proposes
that the nation should move urgently to slow climate change.
Suppose that person proposes regulating the fuel efficiency of
cars, or requiring high-efficiency lightbulbs, or subsidizing
ethanol, or providing research support for solar power--but
nowhere does the proposal raise the price of carbon. You should
conclude that the proposal is not really serious and does not
recognize the central economic message about how to slow climate
change. To a first approximation, raising the price of carbon is
a necessary and sufficient step for tackling global warming. The
rest is at best rhetoric and may actually be harmful in inducing
economic inefficiencies.

If this chapter were widely read, the public understanding of global
warming and possible responses to it would be greatly improved.

Nordhaus examines five kinds of global-warming policy, with many
runs of DICE for each kind. The first kind is business-as-usual,
with no restriction of carbon dioxide emissions--in which case, he
estimates damages to the environment amounting to some $23 trillion
in current dollars by the year 2100. The second kind is the "optimal
policy," judged by Nordhaus to be the most cost-effective, with a
worldwide tax on carbon emissions adjusted each year to give the
maximum aggregate economic gain as calculated by DICE. The third
kind is the Kyoto Protocol, in operation since 2005 with 175
participating countries, imposing fixed limits to the emissions of
economically developed countries only. Nordhaus tests various
versions of the Kyoto Protocol, with or without the participation of
the United States.

The fourth kind of policy is labeled "ambitious" proposals, with two
versions which Nordhaus calls "Stern" and "Gore." "Stern" is the
policy advocated by Sir Nicholas Stern in the Stern Review, an
economic analysis of global-warming policy sponsored by the British
government.^[*] "Stern" imposes draconian limits on emissions,
similar to the Kyoto limits but much stronger. "Gore" is a policy
advocated by Al Gore, with emissions reduced drastically but
gradually, the reductions reaching 90 percent of current levels
before the year 2050. The fifth and last kind is called "low-cost
backstop," a policy based on a hypothetical low-cost technology for
removing carbon dioxide from the atmosphere, or for producing energy
without carbon dioxide emission, assuming that such a technology
will become available at some specified future date. According to
Nordhaus, this technology might include "low-cost solar power,
geothermal energy, some nonintrusive climatic engineering, or
genetically engineered carbon-eating trees."

Since each policy put through DICE is allowed to run for one or two
hundred years, its economic effectiveness must be measured by an
aggregated sum of gains and losses over the whole duration of the
run. The most crucial question facing the policymaker is then how to
compare present-day gains and losses with gains and losses a hundred
years in the future. That is why Nordhaus chose "A Question of
Balance" for his title. If we can save M dollars of damage caused by
climate change in the year 2110 by spending one dollar on reducing
emissions in the year 2010, how large must M be to make the spending
worthwhile? Or, as economists might put it, how much can future
losses from climate change be diminished or "discounted" by money
invested in reducing emissions now?

The conventional answer given by economists to this question is to
say that M must be larger than the expected return in 2110 if the
2010 dollar were invested in the world economy for a hundred years
at an average rate of compound interest. For example, the value of
one dollar invested at an average interest rate of 4 percent for a
period of one hundred years would be fifty-four dollars; this would
be the future value of one dollar in one hundred years' time.
Therefore, for every dollar spent now on a particular strategy to
fight global warming, the investment must reduce the damage caused
by warming by an amount that exceeds fifty-four dollars in one
hundred years' time to accrue a positive economic benefit to
society. If a strategy of a tax on carbon emissions results in a
return of only forty-four dollars per dollar invested, the benefits
of adopting the strategy will be outweighed by the costs of paying
for it. But if the strategy produces a return of sixty-four dollars
per dollar invested, the advantages are clear. The question then is
how well different strategies of dealing with global warming succeed
in producing long-term benefits that outweigh their present costs.
The aggregation of gains and losses over time should be calculated
with the remote future heavily discounted.

The choice of discount rate for the future is the most important
decision for anyone making long-range plans. The discount rate is
the assumed annual percentage loss in present value of a future
dollar as it moves further into the future. The DICE program allows
the discount rate to be chosen arbitrarily, but Nordhaus displays
the results only for a discount rate of 4 percent. Here he is
following the conventional wisdom of economists. Four percent is a
conservative number, based on an average of past experience in good
and bad times. Nordhaus is basing his judgment on the assumption
that the next hundred years will bring to the world economy a
mixture of stagnation and prosperity, with overall average growth
continuing at the same rate that we have experienced during the
twentieth century. Future costs are discounted because the future
world will be richer and better able to afford them. Future benefits
are discounted because they will be a diminishing fraction of future
wealth.

When the future costs and benefits are discounted at a rate of 4
percent per year, the aggregated costs and benefits of a climate
policy over the entire future are finite. The costs and benefits
beyond a hundred years make little difference to the calculated
aggregate. Nordhaus therefore takes the aggregate benefit-minus-cost
over the entire future as a measure of the net value of the policy.
He uses this single number, calculated with the DICE model of the
world economy, as a figure of merit to compare one policy with
another. To represent the value of a policy by a single number is a
gross oversimplification of the real world, but it helps to
concentrate our attention on the most important differences between
policies.

Here are the net values of the various policies as calculated by the
DICE model. The values are calculated as differences from the
business-as-usual model, without any emission controls. A plus value
means that the policy is better than business-as-usual, with the
reduction of damage due to climate change exceeding the cost of
controls. A minus value means that the policy is worse than
business-as-usual, with costs exceeding the reduction of damage. The
unit of value is $1 trillion, and the values are specified to the
nearest trillion. The net value of the optimal program, a global
carbon tax increasing gradually with time, is plus three--that is, a
benefit of some $3 trillion. The Kyoto Protocol has a value of plus
one with US participation, zero without US participation. The
"Stern" policy has a value of minus fifteen, the "Gore" policy minus
twenty-one, and "low-cost backstop" plus seventeen.

What do these numbers mean? $1 trillion is a difficult unit to
visualize. It is easier to think of it as $3,000 for every man,
woman, and child in the US population. It is comparable to the
annual gross domestic product of India or Brazil. A gain or loss of
$1 trillion would be a noticeable but not overwhelming perturbation
of the world economy. A gain or loss of $10 trillion would be a
major perturbation with unpredictable consequences.

The main conclusion of the Nordhaus analysis is that the ambitious
proposals, "Stern" and "Gore," are disastrously expensive, the
"low-cost backstop" is enormously advantageous if it can be
achieved, and the other policies including business-as-usual and
Kyoto are only moderately worse than the optimal policy. The
practical consequence for global-warming policy is that we should
pursue the following objectives in order of priority. (1) Avoid the
ambitious proposals. (2) Develop the science and technology for a
low-cost backstop. (3) Negotiate an international treaty coming as
close as possible to the optimal policy, in case the low-cost
backstop fails. (4) Avoid an international treaty making the Kyoto
Protocol policy permanent. These objectives are valid for economic
reasons, independent of the scientific details of global warming.

There is a fundamental difference of philosophy between Nordhaus and
Sir Nicholas Stern. Chapter 9 of Nordhaus's book explains the
difference, and explains why Stern advocates a policy that Nordhaus
considers disastrous. Stern rejects the idea of discounting future
costs and benefits when they are compared with present costs and
benefits. Nordhaus, following the normal practice of economists and
business executives, considers discounting to be necessary for
reaching any reasonable balance between present and future. In
Stern's view, discounting is unethical because it discriminates
between present and future generations. That is, Stern believes that
discounting imposes excessive burdens on future generations. In
Nordhaus's view, discounting is fair because a dollar saved by the
present generation becomes fifty-four dollars to be spent by our
descendants a hundred years later.

The practical consequence of the Stern policy would be to slow down
the economic growth of China now in order to reduce damage from
climate change a hundred years later. Several generations of Chinese
citizens would be impoverished to make their descendants only
slightly richer. According to Nordhaus, the slowing-down of growth
would in the end be far more costly to China than the climatic
damage. About the much-discussed possibility of catastrophic effects
before the end of the century from rising sea levels, he says only
that "climate change is unlikely to be catastrophic in the near
term, but it has the potential for serious damages in the long run."
The Chinese government firmly rejects the Stern philosophy, while
the British government enthusiastically embraces it. The Stern
Review, according to Nordhaus, "takes the lofty vantage point of the
world social planner, perhaps stoking the dying embers of the
British Empire."

2.

The main deficiency of Nordhaus's book is that he does not discuss
the details of the "low-cost backstop" that might provide a climate
policy vastly more profitable than his optimum policy. He avoids
this subject because he is an economist and not a scientist. He does
not wish to question the pronouncements of the Intergovernmental
Panel on Climate Change, a group of hundreds of scientists
officially appointed by the United Nations to give scientific advice
to governments. The Intergovernmental Panel considers the science of
climate change to be settled, and does not believe in low-cost
backstops. Concerning the possible candidates for a low-cost
backstop technology he mentions in the sentence I previously
quoted--for example, "low-cost solar power"--Nordhaus has little to
say. He writes that "no such technology presently exists, and we can
only speculate on it." The "low-cost backstop" policy is displayed
in his tables as an abstract possibility without any details. It is
nowhere emphasized as a practical solution to the problem of climate
change.

At this point I return to the Keeling graph, which demonstrates the
strong coupling between atmosphere and plants. The wiggles in the
graph show us that every carbon dioxide molecule in the atmosphere
is incorporated in a plant within a time of the order of twelve
years. Therefore, if we can control what the plants do with the
carbon, the fate of the carbon in the atmosphere is in our hands.
That is what Nordhaus meant when he mentioned "genetically
engineered carbon-eating trees" as a low-cost backstop to global
warming. The science and technology of genetic engineering are not
yet ripe for large-scale use. We do not understand the language of
the genome well enough to read and write it fluently. But the
science is advancing rapidly, and the technology of reading and
writing genomes is advancing even more rapidly. I consider it likely
that we shall have "genetically engineered carbon-eating trees"
within twenty years, and almost certainly within fifty years.

Carbon-eating trees could convert most of the carbon that they
absorb from the atmosphere into some chemically stable form and bury
it underground. Or they could convert the carbon into liquid fuels
and other useful chemicals. Biotechnology is enormously powerful,
capable of burying or transforming any molecule of carbon dioxide
that comes into its grasp. Keeling's wiggles prove that a big
fraction of the carbon dioxide in the atmosphere comes within the
grasp of biotechnology every decade. If one quarter of the world's
forests were replanted with carbon-eating varieties of the same
species, the forests would be preserved as ecological resources and
as habitats for wildlife, and the carbon dioxide in the atmosphere
would be reduced by half in about fifty years.

It is likely that biotechnology will dominate our lives and our
economic activities during the second half of the twenty-first
century, just as computer technology dominated our lives and our
economy during the second half of the twentieth. Biotechnology could
be a great equalizer, spreading wealth over the world wherever there
is land and air and water and sunlight. This has nothing to do with
the misguided efforts that are now being made to reduce carbon
emissions by growing corn and converting it into ethanol fuel. The
ethanol program fails to reduce emissions and incidentally hurts
poor people all over the world by raising the price of food. After
we have mastered biotechnology, the rules of the climate game will
be radically changed. In a world economy based on biotechnology,
some low-cost and environmentally benign backstop to carbon
emissions is likely to become a reality.

Global Warming: Looking Beyond Kyoto is the record of a conference
held at the Yale Center for the Study of Globalization in 2005. It
is edited by Ernesto Zedillo, the head of the Yale Center, who
served as president of Mexico from 1994 to 2000 and was chairman of
the conference. The book consists of an introduction by Zedillo and
fourteen chapters contributed by speakers at the conference. Among
the speakers was William Nordhaus, contributing "Economic Analyses
of the Kyoto Protocol: Is There Life After Kyoto?," a sharper
criticism of the Kyoto Protocol than we find in his own book.

The Zedillo book covers a much wider range of topics and opinions
than the Nordhaus book, and is addressed to a wider circle of
readers. It includes "Is the Global Warming Alarm Founded on Fact?,"
by Richard Lindzen, professor of atmospheric sciences at MIT,
answering that question with a resounding no. Lindzen does not deny
the existence of global warming, but considers the predictions of
its harmful effects to be grossly exaggerated. He writes,

Actual observations suggest that the sensitivity of the real
climate is much less than that found in computer models whose
sensitivity depends on processes that are clearly misrepresented.

Answering Lindzen in the next chapter, "Anthropogenic Climate
Change: Revisiting the Facts," is Stefan Rahmstorf, professor of
physics of the oceans at Potsdam University in Germany. Rahmstorf
sums up his opinion of Lind-zen's arguments in one sentence: "All
this seems completely out of touch with the world of climate science
as I know it and, to be frank, simply ludicrous." These two chapters
give the reader a sad picture of climate science. Rahmstorf
represents the majority of scientists who believe fervently that
global warming is a grave danger. Lindzen represents the small
minority who are skeptical. Their conversation is a dialogue of the
deaf. The majority responds to the minority with open contempt.

In the history of science it has often happened that the majority
was wrong and refused to listen to a minority that later turned out
to be right. It may--or may not--be that the present is such a time.
The great virtue of Nordhaus's economic analysis is that it remains
valid whether the majority view is right or wrong. Nordhaus's
optimum policy takes both possibilities into account. Zedillo in his
introduction summarizes the arguments of each contributor in turn.
He maintains the neutrality appropriate to a conference chairman,
and gives equal space to Lindzen and to Rahmstorf. He betrays his
own opinion only in a single sentence with a short parenthesis:
"Climate change may not be the world's most pressing problem (as I
am convinced it is not), but it could still prove to be the most
complex challenge the world has ever faced."

The last five chapters of the Zedillo book are by writers from five
of the countries most concerned with the politics of global warming:
Russia, Britain, Canada, India, and China. Each of the five authors
has been responsible for giving technical advice to a government,
and each of them gives us a statement of that government's policy.
Howard Dalton, spokesman for the British government, is the most
dogmatic. His final paragraph begins:

It is the firm view of the United Kingdom that climate change
constitutes a major threat to the environment and human society,
that urgent action is needed now across the world to avert that
threat, and that the developed world needs to show leadership in
tackling climate change.

The United Kingdom has made up its mind and takes the view that any
individuals who disagree with government policy should be ignored.
This dogmatic tone is also adopted by the Royal Society, the British
equivalent of the US National Academy of Sciences. The Royal Society
recently published a pamphlet addressed to the general public with
the title "Climate Change Controversies: A Simple Guide." The
pamphlet says:

This is not intended to provide exhaustive answers to every
contentious argument that has been put forward by those who seek
to distort and undermine the science of climate change and deny
the seriousness of the potential consequences of global warming.

In other words, if you disagree with the majority opinion about
global warming, you are an enemy of science. The authors of the
pamphlet appear to have forgotten the ancient motto of the Royal
Society, Nullius in Verba, which means, "Nobody's word is final."

All the books that I have seen about the science and economics of
global warming, including the two books under review, miss the main
point. The main point is religious rather than scientific. There is
a worldwide secular religion which we may call environmentalism,
holding that we are stewards of the earth, that despoiling the
planet with waste products of our luxurious living is a sin, and
that the path of righteousness is to live as frugally as possible.
The ethics of environmentalism are being taught to children in
kindergartens, schools, and colleges all over the world.

Environmentalism has replaced socialism as the leading secular
religion. And the ethics of environmentalism are fundamentally
sound. Scientists and economists can agree with Buddhist monks and
Christian activists that ruthless destruction of natural habitats is
evil and careful preservation of birds and butterflies is good. The
worldwide community of environmentalists--most of whom are not
scientists--holds the moral high ground, and is guiding human
societies toward a hopeful future. Environmentalism, as a religion
of hope and respect for nature, is here to stay. This is a religion
that we can all share, whether or not we believe that global warming
is harmful.

Unfortunately, some members of the environmental movement have also
adopted as an article of faith the be-lief that global warming is
the greatest threat to the ecology of our planet. That is one reason
why the arguments about global warming have become bitter and
passionate. Much of the public has come to believe that anyone who
is skeptical about the dangers of global warming is an enemy of the
environment. The skeptics now have the difficult task of convincing
the public that the opposite is true. Many of the skeptics are
passionate environmentalists. They are horrified to see the
obsession with global warming distracting public attention from what
they see as more serious and more immediate dangers to the planet,
including problems of nuclear weaponry, environmental degradation,
and social injustice. Whether they turn out to be right or wrong,
their arguments on these issues deserve to be heard.

Notes

^[*] See Nicholas Stern, The Economics of Climate Change: The Stern
Review (Cambridge University Press, 2007).