Why should we subsidise tomorrow’s rich in the name of the climate?

FREEDOM, LAW & ECONOMICS, Sanjeev Sabhlok / Sunday, July 28th, 2019

From: Sanjeev Sabhlok first appeared in TOI on July 28, 2019, 3:46 PM IST  Permalink : Why should we subsidise tomorrow’s rich in the name of the climate?

As a liberal party, our default position is to reject any government intervention in the lives of people unless it is thoroughly justified. In particular, we reject the wishy-washy precautionary principle. Real harm must be proven before even the thought of government intervention is entertained.

It is a matter of concern to us that Indian governments have been dumping scarce taxpayer resources into renewable energy and other inefficient technologies in the name of “climate change”. Instead of acting as the voice of reason, governments world-wide are having a picnic, feasting on our panic. When people are scared, it is much easier to raid their pockets. 

We are the only party in India (and possibly in the world) that stands for reason. We believe that everything must be questioned. In this case, IPCC’s own analysis shows there is no harm from climate change. 

Yes, you’ve read correctly: the IPCC itself has said that there is no harm from climate change. Of course, you won’t be told about this unless you dig deep. 

The IPCC’s 2014 AR5 report (see the chart at p.690 of Chapter 10 of the Working Group II’s contribution) makes note of 20 studies by economists about the welfare impacts of climate change. Three of these conclude that doing nothing may improve things. Most of the remaining 17 studies suggest a very modest loss of future income, of less than three per cent. The IPCC summarises: estimates of global annual economic losses for an additional temperature increase of 2°C are between 0.2 and 2.0 per cent of income. These are its precise words. Check them out for yourself. 

Thus, the IPCC is telling us that if global temperature increases by 2 degrees, future generations would lose a pitiable 2 per cent of their (hugely greater) income. 

Let’s pause to digest this further. The IPCC is saying that instead of being 6 times richer by the end of the century (the historic performance of economies for the past 200 years) our future generations will be only 5.6 times richer. I am sure tears are starting to roll down your cheeks by now. 

Policy makers hide this fact very carefully from us. Instead, they drum up panic and ask us to price carbon and subsidise renewable energy so we can make the rich future generations even richer. 

This 2014 IPCC conclusion was confirmed by a 2018 study in Nature by Marshall Burke, Matthew Davis and Noah Diffenbaugh which found that future generations could lose a cumulative $20 trillion worth of income (at a low 3 per cent discount rate) if the temperature rose by 2 degrees. So these super-rich people would have a mere $380 trillion in global income instead of the $400 trillion they would have had otherwise. How truly sad!

The study also suggests that if the temperature went up further, to say 3 degrees, these future rich have up to 25 per cent less income than they would otherwise have. And if it went to 4 degrees, they would have 30 per cent less income than they would, otherwise. In all cases they would be insanely richer than us. 

In contrast to CO2, though, socialism causes real harm – but don’t expect Nature or grant-sucking scientists and economists to tell us that. India could easily become $125 trillion economy by 2100 if it dumps socialism. Instead, if India continues with Mr Modi’s socialism, it will struggle to become even a $20 trillion economy. But Nature won’t ever publish my article that spells this out for India and the world. These anti-poor communists would rather peddle the Green New Deal.

In brief, economists and scientists have comprehensively failed to prove that CO2 causes any harm. No case has been made whatsoever for any government intervention.

Moreover, the economic models currently used are deeply flawed. I’ll touch upon some technical matters separately. But we should note here that these models greatly exaggerate the (miniscule) harm from CO2. They contain strong but dangerous hidden assumptions, such as: (a) the current temperature is optimal, and (b) CO2 causes a significant increase in temperature. 

I have refuted the second assumption in previous articles, so let me make some observations about the first of these two assumptions – regarding the current temperature being optimal.

There is no basis to suggest that today’s temperature or sea level is optimal for life on earth. The climate has constantly changed, sometimes massively. A few degrees up and down, a few tens of metres of sea level up and down, is par for the course for life on Earth. 

Just a thousand years ago, the global temperature was very warm. The IPCC’s first report had a chart that showed temperatures far in excess of current temperatures during the Medieval Warming (MW) period. But the IPCC soon realised that people wouldn’t cough up their money unless the MW was erased. Since then, these “scientists” have been making strenuous efforts to get rid of it. 

A recent study published in Nature rejects MW. But I’d be reluctant to embrace it, at least not so fast. It needs to be thoroughly scrutinised by scientists whose hundreds of previous studies confirmed the MW. The weight of evidence is still with the MW. And then the temperatures cooled, leading to a Little Ice Age from which we emerged around two hundred years ago. All this variation occurred without man-made CO2 emissions.

Likewise, sea levels change all the time. The peak ice extent of the Ice Age occurred around 20,000 years ago. Since then the sea has risen by 130 metres – almost two Qutub Minars stacked on top of each other. Mankind was present during this period and happily adapted. When India’s Dwarka city went under water thousands of year ago, its residents moved inland. A few stone buildings were lost, but no one lost their life. 

Even under RCP8.5, the IPCC’s worst case scenario, the sea level is projected to rise by a mere one meter by 2100. Mankind adjusted to a 130-metre increase over the past 20,000 years. So how is adjusting to a one metre increase a problem? And the fact is that this projected one metre increase simply won’t happen. Despite the rapid increase in CO2 levels from 1950, the sea level has been rising at the steady and rather slow rate of eight inches per century. 

There is therefore nothing to suggest that the current temperature or sea level is optimal. And we also know that life is very resilient and adapts to climate change without any problem. In my next article I will show how a rigorous cost-benefit approach can stop this man-made panic in its tracks.

From: Sanjeev Sabhlok first appeared in TOI on July 28, 2019, 3:46 PM IST  Permalink : Why should we subsidise tomorrow’s rich in the name of the climate?

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