I wasn’t going to discuss Topher Field’s 50-to-1 project as the premise is rather ridiculous and I don’t really want to give it any undue publicity. However, it sometimes seems better to at least try and address such things so that those who are uncertain can get an alternative view. I also thought I might add to what Sou – who has recommended that Topher takes the money and runs – has already said.
The basic argument that Topher Fields is making is that it is 50 times more expensive to stop climate change than to simply do nothing now and to then adapt as and when it become necessary. Let me make it clear that this is a ridiculous claim and I will do my best to explain why below. Topher claims that everything is based on published work and is fully referenced. I don’t dispute that one can find sources for all the numbers that he uses. The problem is how they’re combined to give the answer that he is presenting. I should make it clear that the initial calculation was done by Christopher Monckton and not by Topher Fields.
The basic calculation is as follows. It is based on the Australian carbon tax (which I think has now changed). This carbon tax was estimated to reduce Australia’s CO2 emissions by 5%. Australia only emits 1.2% of the world’s carbon and so this would only reduce the world’s emissions by 0.06%. One can then estimate how much this would reduce the adjusted forcing associated with CO2 and then estimate how much this would reduce the warming over the next decade. The revenue associated with this Australian carbon tax was estimated to be $13 billion per year. That allows one to determine the cost per degree of warming per decade. The calculation then goes on to say that if we wish to prevent 0.17oC of warming over the next decade it would cost $420 trillion, or 80% of world GDP per year. He then claims (using the Stern report) that adapting to climate change (or the future cost) is 1.5% of world GDP and hence it is 50 times more expensive to mitigate than to adapt. I haven’t actually read the Stern review but, according to the Wikipedia entry
the overall costs of climate change will be equivalent to losing at least 5% of global gross domestic product (GDP) each year, now and forever. Including a wider range of risks and impacts could increase this to 20% of GDP or more, also indefinitely.
Hmm, that seems somewhat more severe than Topher seems to be suggesting.
So, what are the issues with this calculation? They are numerous, so it is actually quite difficult to know where to begin. A few basic ones to being with. As someone pointed out in a comment on an earlier post, the Australian carbon tax was intended to be revenue neutral. It was simply moving the tax burden from something else, onto carbon. If implemented properly, there would be no net increase in tax revenue. If it did indeed reduce carbon emissions by 5%, it would essentially be for free. Another immediate issue is that it is intended to reduce carbon emissions. It’s not explicitly aimed at a particular reduction in future surface warming. Of course they’re related, but the immediate goal is to limit the atmospheric CO2 concentrations. Switching from how much the tax will reduce CO2 emissions to what effect that will have on surface temperatures is misleading. The attempt to calculate how much it will cost to prevent 0.17oC of warming in the next decade is also a little ridiculous. We’ve already locked in about 1oC of warming over the next 50 to 100 years (maybe longer). Even if we completely stopped emitting CO2 today, surface temperatures would still continue to rise (on average) at 0.1 to 0.2oC per decade for the next few decades (maybe longer). Apart from actually removing CO2 from the atmosphere or artificially reflecting more incoming sunlight, there’s virtually nothing we can do about this.
As far as the actual calculation goes, it’s also just completely wrong. The Australian carbon tax was associated with revenues of about $13 billion and was expected to reduce carbon emissions by 5%. $13 billion is about 1% of Australian GDP. If one wants to expand this to the entire globe, then it would seem reasonable to assume that a carbon tax that would have revenues of 1% of world GDP would reduce CO2 emissions by 5%. If the effect is linear, then the maximum would presumably be 20% of world GDP per year, not 80%. There’s a further issue though. If 1% reduces emissions by 5%, then (if it’s linear) increasing the tax by a factor of 10 would reduce carbon emissions by 50%. However, this wouldn’t increase the associated revenue by a factor of 10 because you only pay for the CO2 that’s emitted. Since a 10 times increase has reduced emissions by a factor of 2, the revenue would only increase by a factor of 5. If you increase the tax even further, the revenue would actually decrease (at least based on the assumptions used by Monckton and Topher). A factor of 20 increase would reduce the carbon emissions to essentially zero, and so the revenues would be zero, not 20 times greater (I’m, of course, assuming here that an increase produces a certain absolute decrease, rather than a relative decrease).
So, in a simple sense, it seems that using the Australian carbon tax as a benchmark implies that the maximum global impact would be 5% of GDP per year, nowhere near the 80% per year suggested by Topher. At worst it is (according to Topher’s own numbers) 3.33 times more expensive to mitigate than to adapt. I imagine, also that the effect of a carbon tax is non-linear. If it’s very low, noone will bother. If it increases somewhat, there’ll be some incentive to invest in alternatives. As it increases, the incentive increases and the reduction in CO2 emissions will probably scale non-linearly with the increase in carbon tax. Now, I’m not suggesting that one should immediately implement a very high carbon tax, as it will take time for the development of realistic alternatives. Starting low to incentivise a change of behaviour without risking too much “damage” to existing business models seems sensible. As alternatives become more and more viable, the tax could be ramped up to “punish” those who are not modifying their behaviour.
I thought I would address a few things actually said in the 50-to-1 video. Joanne Nova says
So many millions of dollars are wasted. People have worked hard to pay their taxes and to see the government just pouring them down the sink…
Seriously? This is what you think will happen with this money? It won’t be used to create jobs, pay teachers, doctors, nurses, invest in infrastructure? It will just be poured down the sink? Just in case Joanne really is confused about this, the answer is that it will not be poured down the sink. It will be spent on all sorts of different things. It doesn’t simply get wasted. Just because it is a tax doesn’t mean that it can’t contribute to the growth of an economy.
Topher himself says
Predicted global warming for the next decade is 0.17 of a degree. Just to stop that 0.17, we would need to spend $540 trillion. …. It’s 80% of the entire planet’s GDP. That means effectively we would need to cut average economic activity, and therefore the average standard of living, to one-fifth of what it is worldwide just to ensure that it doesn’t get a little bit warmer this decade.
Firstly, we can’t stop the warming that will happen this decade. Most of it is already locked in. The goal of the carbon tax is to reduce long-term carbon emissions to try and reduce the overall future warming. Secondly, what does Topher think would happen to this money? Does he think, like Joanne, that it would simply be poured down the sink? Even if what he suggested was actually possible (it’s not) the money raised would be being used to develop, invest in, and maintain alternatives and would be spent on all sorts of other economic activities. It might not be being spent how people like Joanne Nova and Topher Field would like, but it would still exist, create jobs and, potentially, create wealth. This is also ignoring, as I mentioned earlier, that the carbon tax is intended to be revenue neutral so the net tax revenues shouldn’t change. It’s just being used to incentivise a change to a reduced carbon economy.
Someone called David Evans says
We could have improved our lives. We could have improved the lives of others in countless ways with that same money and effort and here we are wasting it
Here’s the point, David. We still can. If anything, taking money away from selfish climate change skeptics and spending it on mitigating against climate change is much more likely – in my opinion – to help people than leaving it in the pockets of those who don’t seem to care about others.
Donna Laframboise says
We’re smart. We’re ingenious. We’re creative, and we will solve the problems that come our way and so will our children.
Indeed, Donna is quite right. We are smart and ingenious and we can solve these problems. It is, however, very difficult to do so when people keep saying that there isn’t a problem or that we shouldn’t do anything yet. Yes, we can solve these problems, but only if we actually try to do so.
Topher then finishes with a claim that all of these various carbon tax/carbon trading schemes
all suffer the same basic flaw. If they are expensive enough to be effective, they aren’t going to be affordable, and if they’re affordable, they aren’t going to be effective.
A nice turn of phrase, but largely nonsense. I agree with the latter part of his comment, but if they’re expensive enough to be effective, then they’ll reduce carbon emissions and the actual cost will be low (you only pay if you continue to emit carbon). This is a ridiculous argument. It can’t both be effective and expensive. Also, it again ignores that the carbon tax schemes are intended to be revenue neutral. They shift the burden from something else onto carbon so as to incentivise a change in behaviour. They aren’t, as far as I’m aware, intended to increase total tax revenue.
Anyway, I’ll stop there. As usual, happy to be corrected by those who know more than me but, ideally, through a reasoned and sensible argument and not through a simple statement that I’m wrong.