The Cost of an Exogenous Variable: Sooner than We Think?

As reported in the WashingtonPost, scientists have calculated the cost of stabilizing greenhouse gas emissions.

The price tag for this exogenous variable just went up: $100 for every ton of CO2 dumped into the atmosphere, not exactly chump change.

The most ambitious option, aimed at stabilizing the level of greenhouse gases from fossil fuels by 2030, would require measures that would add $100 to the costs associated with each ton of carbon dioxide pumped into the atmosphere.

And this is the price tag just to avoid the worst effects of global warming!

Of course, the U.S. and China, now #1 and #2—or is it #2 and #1—in emissions vehemently objected to the report.

China literally has bet the farm on its industrialization plans, as I pointed out in a prior thread: “China: Now to 2100”. And China is not about to call in its bets. Nor is the U.S. about to risk that kind of inflationary pressure. What would the Fed do? It is worried about wages being inflationary; now this?

You know, I have a hard time getting my head around what is going to happen. Clearly, we are quickly, more quickly than people would have guessed two years ago, approaching a crisis. We are going to have to make a choice, roll the dice, take a chance, hedge our bets…whatever.

Two years ago, everyone was fat and happy. Global warming was potentially a problem in 2100; even then, we would not see the seas rise that much. Plenty of time. Yet, every time we turn around, the situation seems worse.

Perhaps it is just that collectively we are beginning to grasp the full range of the effects of global warming: species extinction, droughts, storms, sea rise, glacial water sources disappearing, desertification…. Or maybe it’s that global warming is appearing sooner and faster than we thought, that indeed it is worse….

I keep thinking about Tyler Cowen’s remark at the at the Marginal Revolution:

I have yet to see a real plan which recognizes three points: a) without continued economic growth the world will probably fall apart, b) the problem is real and significant, c) any good preventive solution would require an enormous amount of concerted action across both time and across nations.

While Tyler was comforted with the thought that global warming was sufficiently distant as to not be a problem, I think, nonetheless, he has expressed our present dilemma perfectly: Will the world fall apart without continued growth? Certainly, a carbon tax of that dimension would put a serious crimp in growth. Even then, it might not be enough. Secondly, does the world have to will to act collectively, especially when the two largest offenders are dragging their feet. And finally, is there enough time?

Remember when you worried about 2100. Well, now you have to worry about 2035. We seem to be running out of time.

Suggestion for those who are interested in following global warming news: Do a Google alert entitled: Effects Global Warming. In the past six months, country after country is starting to evaluate the future and present effects in its own backyard. Devastating future effects occur well before 2050. Present effects are already evident.

Today’s alert links to articles discussing:

• Kasmir’s wetlands having shrunk over 70% and forest cover too has drastically reduced.
• Spy agencies looking at the security implications.
• Birds and fish across Europe facing a struggle for food over the next fifty years as global warming wipes out millions of aquatic animals.