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A looming policy disaster: a sustained, critical look at climate change economics and science is long overdue.

Article Excerpt
After decades of activism by environmentalists, American policymakers are embracing the notion that climate change is a serious problem and that the United States must take action to lower greenhouse gas emissions. In 2006, California governor Arnold Schwarzenegger signed a vague but ostensibly comprehensive bill that caps his state's greenhouse gas emissions. By last June, 17 states had adopted California's vehicle emission standards for greenhouse gases, which require automobile manufacturers to reduce car and truck emissions by 30 percent by 2016. That same month, the U.S. Senate came close to voting on the Lieberman-Warner Climate Security Act, which would have established an enormously complicated cap-and-trade system for greenhouse gases and instituted a number of subsidies and special interest carve-outs for various carbon-emitting interest groups.

The federal courts have also decided that something must be done about greenhouse gas emissions. In the spring of 2007, the U.S. Supreme Court ruled in Massachusetts v. EPA that the U.S. Environmental Protection Agency must promulgate automobile tailpipe carbon dioxide emission standards under Section 202 of the Clean Air Act (CAA). In the lower federal courts, states and environmental groups have attempted to use the old common law doctrine of public nuisance to create a new, judge-made common law regulation of climate change. While the federal courts have rejected the most obvious attempts to substitute judicial remedies for democratic legislation (see, e.g., Connecticut v. AEP and California v. General Motors Corp.), imaginative plaintiffs' attorneys have now shifted ground by arguing that the public nuisance consisted not in the greenhouse gas emissions of defendants such as ExxonMobil, but rather in those firms' funding of scientific research that created doubt about the effects of global warming (Kivalina v. ExxonMobil).

The recent wave of global warming legislation and litigation represents a triumph for climate change activists. But it is in no way a rational, economically sound response to the problems potentially raised by global warming. Instead, the legislation and litigation seem to be products of an adversarial campaign that has presented a very one-sided and hence misleading story about global warming science, about the likely costs and benefits of global warming on Americans' health and welfare, and about the ability of the United States to act alone to alter possible future paths of global warming. The far-distant future may indeed bring a climate catastrophe, but if we do not now take a sustained and critical look at climate change economics and science, an imminent policy catastrophe is a sure thing.

COSTS AND BENEFITS

As with all policy decisions, the choice between combating climate change or continuing the current greenhouse gas emissions trend is a choice between different sets of risks, costs, and benefits. The costs of a warming climate are commonly discussed, but the debate offers little discussion of the benefits of a warming climate or the costs of trying to slow climate change. Those issues need to be part of the public discussion of greenhouse gas policy, as they will affect efforts to reach a political consensus.

BENEFITS There is abundant empirical economic evidence that an increase in climatic temperature of 2-3[degrees]C may well benefit many regions of the United States in the form of enhanced amenity value, increased agricultural productivity, reduced deaths and disease resulting from cold weather, and increased value from warm weather recreational pursuits.

A warmer climate with milder winters will confer a very large amenity benefit in areas of the United States that now have cold winters. According to the Coupled Ocean Atmosphere General Circulation computer models that constitute the current state of the art in climate change prediction, global warming will not give lots of places California's mild, Mediterranean climate, but it will moderate wintertime cold temperatures. Econometric studies of the amenity value of climate show that the moderating effect of global warming on wintertime temperatures in the cold northern, interior, and northeastern regions of the United States will be a decided benefit to people living in such places, worth billions of dollars a year.

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The models also indicate a warming climate will likely make for warmer summers with extreme heat waves. However, developed nations like the United States are more capable of withstanding extreme hot weather than extreme cold weather; heat-related mortality in the United States has declined steadily since the 1960s. A number of factors seem to account for this trend, including the broad use of air conditioning and improved weather forecasting that enables more advance notice of coming heat waves. A recent study of climate scenarios using two prominent global climate models that predict huge temperature increases in the 2070-2099 period predict that there will be no statistically significant increase in U.S. mortality from such temperature increases. The study finds that if warming turns out to be concentrated most in the coldest months, as climate science suggests would happen, then it would lead to a "substantial" reduction in U.S. mortality.

In the United States, a warmer climate would likely not only bring health benefits, but also quite sizeable recreational benefits. Early studies of the impact of moderate climate warming on recreational benefits focused on skiing and, unsurprisingly, found that a warmer climate would mean a decline in both ski industry profits and skier welfare. But however much skiers may love their sport,...

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