I submitted the following to the Climate Spectator on Nov 13, after several attempts to get in contact with the editor.

On October 3 and again on October 23, the Business Spectator published articles by Mr Robert E.T. Ward BSc criticizing my work. Mr Ward is a public relations professional in the employ of Lord Stern of Brentford. He is without formal qualifications in economics, the subject matter of his criticism. Although Mr Ward has been invited to publish his concerns in the academic literature, he has chosen the popular media instead.

Mr Ward raises many trivia. I here focus on the two points of contention. First, Mr Ward disputes that climate change might have positive impacts. Such impacts are well documented and straightforward. Warmer winters imply lower heating costs and reduced cold-related illness. More carbon dioxide in the atmosphere means that crops grow better, particularly in dry areas. A number of studies have concluded that these positive impacts are larger than the negative impacts, at least for modest climate change. Mr Ward has not disputed these studies – instead he has targeted my work which merely summarizes earlier findings. In my latest synthesis, I reckon that incremental impacts will turn net negative in the near future. Indeed, that paper concludes that greenhouse gas emissions should be taxed.

Second, Mr Ward disputes that the impacts of climate change on human welfare are not large. The Stern Review estimates that climate change would make the average person feel as if she had lost five to twenty percent of her income. Other studies find lower numbers. Twenty per cent may seem like a lot, but it is the impact of a century of climate change. Put in context, a century of climate change is about as bad as losing a decade of economic growth – or as bad as lowering the economic growth rate from 2.0% to 1.8% per year. That is by no means trivial – but it is not very large either compared to, say, the economic crisis in Greece. Similar estimates of the welfare impact of climate change have been reported in the last four reports of the Intergovernmental Panel on Climate Change and are shared by other economists, including Mr Ward’s colleagues Professors Fankhauser and Stern. This basic finding is supported by a large technical literature, but it is also in line with casual observations. If we compare hot and rich Singapore to the hot and poor Congo, cold and rich Sweden to cold and poor Mongolia, then we realize that climate is not a fundamental driver of economic well-being. Climate change is a problem, but we should not lose perspective.

Mr Ward’s concerns are without merit.


On Nov 24, Tristan Edis announced the discontinuation of this publication.

Mr Robert E.T. Ward BSc, Policy and Communications Director of the Grantham Research Institute on Climate Change and the Environment, recently published a piece about my work under the title “Flawed analysis of the impacts of climate change”. Mr Ward raises two main objections, first, to the conclusion that “the overall impacts of unmitigated climate change this century could be positive, even if global average temperature rises by more than 2°C above its pre-industrial level” and, second, to the conclusion that “the welfare change caused by climate change is equivalent to the welfare change caused by an income change of a few percent”.

Let us consider Mr Ward’s objections in turn. Climate change will have many, diverse impacts and it will affect different people in different ways. Some of these impacts are negative, some may be negative or positive, and some are positive. The three key positive impacts are a reduction in the costs of winter heating – a particular boon to the poor in temperate and cold climates – a reduction in cold-related mortality and morbidity – a particular boon to the old and frail in temperate and cold climate change – and an increase of carbon dioxide fertilization – a particular boon to those dependent on water-stressed agriculture. The last effect is more immediate because it depends on the atmospheric concentration of carbon dioxide rather than the consequent climate change.

Twenty-two studies of the total impact of climate change on human welfare have been published and four of these – by the late Professor Ralph d’Arge, Professor Robert Mendelsohn, myself, and Professor David Maddison – show that the net impact of modest global warming may be beneficial. Mr Ward’s protestations notwithstanding, this finding is well accepted in the academic literature – and indeed Mr Ward fails to cite a single dissenting paper.

Mr Ward's focus on the total impact betrays his lack of formal education in economics. What matters is not whether the total impact is positive or negative, but rather when the incremental impacts turn negative. My latest estimate puts that at 1.1°C global warming relative to pre-industrial times, or some 0.3°C warming from today. That cannot be avoided – unless we believe that the climate sensitivity is much lower than commonly found, and we believe that governments are secretly plotting much more drastic emission cuts than those announced. The initial benefits are thus sunk. The corresponding policy intervention is a Pigou tax*, rather than a Pigou subsidy. Greenhouse gas emissions should be reduced.

Mr Ward’s second objection is equally unfounded, and again he does not cite any study that contradicts what I wrote. The twenty-two studies cited above all agree that the impact of climate change is small relative to economic growth. This was found in studies by Professor William Nordhaus and Professor Samuel Fankhauser. It was confirmed by the Intergovernmental Panel on Climate Change from its Second Assessment Report, in a chapter led by the late Professor David Pearce, to its Fifth Assessment Report, in a chapter led by me. Even the highest estimate, the 20% upper bound by Lord Professor Nicholas Stern of Brentford, has that a century of climate change is not worse than losing a decade of economic growth.

Over the years, many people have objected to these estimates. Tellingly, not a single one of these people have published an estimate that strongly deviates from existing estimates. On the contrary, a number of people have set out to prove Nordhaus and Fankhauser wrong, only to find estimates of a similar magnitude.

In sum, climate change is a problem but not the biggest problem in the world. It is good to keep perspective. At the heart of the current problems at Volkswagen lies a system of regulations that prioritizes one problem – carbon dioxide emissions – at the expense of another – particulate emissions. Environmentalists’ relentless focus on a single simple message may be an excellent strategy for fund-raising, but it makes for poor public policy. Incomplete and imperfect as our understanding of climate change and its impacts may be, Mr Ward’s dismissal of the evidence is not the best way forward. Academic inspiration, it gave me none.

*unless you want to argue that climate change is the mother of all externalities, in which case we need a Lees Tax, after Pigou's mother.