Real Climate Economics Economics in an era of climate change: designing just solutions to crisis Tue, 10 Sep 2013 21:09:52 +0000 en-US hourly 1 Beyond Reasonable Debate Thu, 29 Nov 2012 19:56:45 +0000 It appears that scare tactics, slander, and intimidation are no longer exclusively the domain of climate denialists seeking to discredit climate science research. According to the actions of Richard Tol, an economist at the University of Sussex, it would seem that these are now acceptable forms of academic debate in economics.

Tol has waged a campaign to damage the reputation of economist Frank Ackerman. Ackerman’s crime? He published a peer-reviewed technical article in a highly reputable journal (“Climate Damages in the FUND Model: A Disaggregated Analysis,” Ecological Economics, 2012.) that critiques Tol’s signature contribution to the climate economics literature – the FUND model. Since then, Tol has written to Ackerman’s employer and publishers accusing him of libel.

As a well published academic, Tol understands that disagreement is not only common, but encouraged by the academy. When you publish your work, you expect others to critique it. Sometimes you agree with the criticisms; other times you do not. But as an academic, you understand that this is how a body of knowledge evolves. It is an expected part of the process. And no academic, no matter how well accomplished, is immune to critique.

It appears that all of the proper channels to facilitate a healthy and productive academic debate have been pursued – and then some. The article was subject to peer-review prior to publication. Ecological Economics then published a commentary by Tol and Anthoff and a reply by Ackerman and Munitz. It even published an editor’s letter on the controversy. Why then, is Tol still trying to silence a legitimate academic debate?

A statement of support has been signed by Terry Barker, Stephen DeCanio, Paul Ekins, Duncan Foley, Michael Hanemann, Julie Nelson, William Nordhaus, Robert Pollin, J. Barkley Rosser, Juliet Schor, and dozens of other economists. It affirms that the Ackerman-Munitz article is a legitimate, peer-reviewed publication making a valuable contribution to the economics of climate change, and urges scholars to pursue criticisms of each other’s work through normal channels of academic debate. If you are an economist who agrees with this statement, Ackerman invites you to add your signature (e-mail frankackerman12 at

In the interest of full disclosure, Ackerman is a founding member of E3 Network. He blogged about the FUND model on Real Climate Economics back in 2011 We also published Tol’s response to that blog post.


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Geoengineering: Don’t Ignore Economics and Governance Thu, 01 Nov 2012 19:47:19 +0000 By Gernot Wagner Ph.D. Economist, Environmental Defense Fund

How serious is global warming? Here’s one indication: the first rogue entrepreneurs have begun testing the waters on geoengineering, as Naomi Klein laments in her must-read New York Times op-ed.

Sadly, Klein misses two important points.

First, it’s not a question of if but when humanity will be compelled to use geoengineering, unless we change course on our climate policies (or lack thereof). Second, all of this calls for more research and a clear, comprehensive governance effort on the part of governments and serious scientists – not a ban of geoengineering that we cannot and will not adhere to. (See point number one.)

Saying that we ought not to tinker with the planet on a grand scale – by attempting to create an artificial sun shield, for example – won’t make it so. Humanity got into this mess thanks to what economists call the “free rider” effect. All seven billion of us are free riders on the planet, contributing to global warming in various ways but paying nothing toward the damage it causes. No wonder it’s so hard to pass a sensible cap or tax on carbon pollution. Who wants to pay for something that they’re used to doing for free – never mind that it comes at great cost to those around them?

It gets worse: Turns out the same economic forces pushing us to do too little on the pollution front are pushing us toward a quick, cheap fix – a plan B.

Enter the Strangelovian world of geoengineering – tinkering with the whole planet. It comes in two distinct flavors:

  • Sucking carbon out of the atmosphere;
  • Creating an artificial sun shield for the planet.

The first involves reversing some of the same processes that cause global warming in the first place. Instead of taking fossil fuels out of the ground and burning them, we would now take carbon dioxide out of the atmosphere and bury it under ground. That sounds expensive, and it is. Estimates range from $40 to $200 and more per ton of carbon dioxide – trillions of dollars to solve the problem.

That brings us to the second, scary flavor, which David Keith, a leading thinker on geoengineering, calls “chemotherapy” for the planet. The direct price tag to create an artificial sun shield: pennies per ton of carbon dioxide. It’s the kind of intervention an island nation, or a billionaire greenfinger, could pay for.

You can see where economics enters the picture. The first form of geoengineering won’t happen unless we place a serious price on carbon pollution. The second may be too cheap to resist.

In a recent Foreign Policy essay, Harvard’s Martin Weitzman and I called the forces pushing us toward quick and dirty climate modification “free driving.” Crude attempts to, say, inject sulfur particles into the atmosphere to counter carbon dioxide already there would be so cheap it might as well be free. We are talking tens or hundreds of millions of dollars a year. That’s orders of magnitude cheaper than tackling the root cause of the problem.

Given the climate path we are on, it’s only a matter of time before this “free driver” effect takes hold. Imagine a country badly hit by adverse climate changes: India’s crops are wilting; China’s rivers are drying up. Millions of people are suffering. What government, under such circumstances, would not feel justified in taking drastic action, even in defiance of world opinion?

Once we reach that tipping point, there won’t be time to reverse warming by pursuing collective strategies to move the world onto a more sustainable growth path. Instead, speed will be of the essence, which will mean trying untested and largely hypothetical techniques like mimicking volcanoes and putting sulfur particles in the stratosphere to create an artificial shield from the sun.

That artificial sunscreen may well cool the earth. But what else might it do? Floods somewhere, droughts in other places, and a host of unknown and largely unknowable effects in between. That’s the scary prospect. And we’d be experimenting on a planetary scale, in warp speed.

That all leads to the second key point: we ought to do research in geoengineering, and do so guided by sensible governance principles adhered to be all. We cannot let research get ahead of public opinion and government oversight. The geoengineering governance initiative convened by the British Royal Society, the Academy of Sciences for the Developing World, and the Environmental Defense Fund is a necessary first step in the right direction.

Is there any hope in this doomsday scenario? Absolutely. Country after country is following the trend set by the European Union to institute a cap or price on carbon pollution. Australia, New Zealand, South Korea, and also California are already – or will soon be – limiting their carbon pollution. India has a dollar-a-ton coal tax. China is experimenting with seven regional cap-and-trade systems.

None of these is sufficient by itself. But let’s hope this trend expands –fast – to include the really big emitters like the whole of China and the U.S., Brazil, Indonesia, and others. Remember, the question is not if the “free driver” effect will kick in as the world warms. It’s when.

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Cleaning the Air While Cooling the Planet Fri, 28 Sep 2012 19:27:23 +0000 By James Boyce and Manuel Pastor. Cross-posted on Triple Crisis.

There is good news and bad news about the clean energy transition. The good news is that half the new electric generating capacity installed worldwide in 2008-2010 was renewable. The bad news is that half wasn’t.

To avoid rapid global warming and its attendant human and economic risks, we need to accelerate the transition. We need to do more than slower growth in the use of fossil fuels: we need to cut their use substantially. This will require significantly ramped up investments worldwide in energy efficiency and clean energy.

One way to encourage this investment is to base public policies on the full range of benefits from reduced burning of fossil fuels – not only global benefits from reduced greenhouse gas emissions, but also local benefits from reduced emissions of particulates, nitrogen oxides, sulfur dioxide, carbon monoxide, mercury, benzene, and other toxic pollutants.

In the European Union, research has shown that the clean air benefits alone are sufficient to justify investments in energy efficiency and renewables. “The welfare effects of climate policy seem to be positive,” a 2006 report for the Netherlands Environmental Agency concluded, “even when the long-term benefits of avoided climate impacts are not taken into account.”

The clean air co-benefits of climate policy may be even greater elsewhere, in countries with less stringent air pollution controls than Europe. In a recent study we cite World Bank data indicating that in the United States the human health damages from particulate emissions are six times higher per ton of carbon dioxide than the average for Germany, France and the United Kingdom. In China, the ratio is more than ten times higher.

It would be ironic if energy policies designed to internalize the external costs of greenhouse gas emissions were to ignore the external costs of co-pollutants. But there is an important difference between two. The benefits of reduced greenhouse gas emissions are global, whereas air quality benefits of reduced co-pollutant emissions are local.

The difference matters for three reasons:

  • Efficiency: From a climate change standpoint, it doesn’t matter where emission reductions occur. From an air quality standpoint, it can matter a lot. Co-pollutant damages vary depending on the type of fossil fuel, pollution control technologies, and the population density of the surrounding area. Efficient policy design would aim for greater emission reductions where the public health benefits are greater.
  • Equity: Low-income and minority communities often bear disproportionate pollution burdens. In the United States, for example, blacks, Latinos and other minorities account for 50% of the human health impacts from air toxics emissions from petroleum refineries, considerably more than their 31% share in the national population. Air quality benefits are in the sweet spot where equity and efficiency intersect.
  • Political salience: Last but not least, the air quality benefits of reduced use of fossil fuels are immediate as well as local. For both reasons, they may be critical in building public support for clean energy policies. Neglecting these benefits in policy design would not only be tantamount leaving health care dollars lying on the ground – or floating in the air – it would also mean foregoing crucial allies in the battle to curb the use of fossil fuels.

In our study, Cooling the Planet, Clearing the Air, we outline a variety of ways to bring air quality benefits to bear on climate policy. Specific locations can be designated as priority zones under a carbon pricing system, whether a tax or cap-and-permit system. Similarly, specific industrial facilities and sectors can be assigned priority for emission reductions. Community benefit funds can be established to channel some of the rent generated by carbon pricing into environmental and public health investments in overburdened communities.

In the 20th century, environmentalists urged us to “think globally, act locally.” As we embark on the clean energy transition of the 21st century, we also need to think locally when acting globally.

James K. Boyce teaches at the University of Massachusetts, Amherst, where he directs the program on development, peacebuilding and the environment at the Political Economy Research Institute. Manuel Pastor teaches at the University of Southern California, where he directs the Program for Environmental and Regional Equity. They are the authors of ”Cooling the Planet, Clearing the Air,” a study commissioned by E3: Economics for Equity and the Environment and co-published with the Joint Center for Political and Economic Studies.


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