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CBO, Media in Need of Remedial Science Classes

October 17th, 2009 · 3 Comments

The incisive Natasha Chart of Campaign for America’s Future has a must read discussion of the standard economist’s failures when considering large scale, complex social and environmental issues like climate change.

It’s remarkable how often economists ignore physical reality. Whether they’re suggesting that economies can act as perpetual motion machines or suggesting that resource availability is meaningless to economic growth, I’m always prompted to think they should make science classes a mandatory part of the economics curriculum.

Brad Johnson of the Wonkroom sparked Natasha to return to this subject with his calling out of Congressional Budget Office (CBO) Director Doug Elmendorf for his testimony which placed economic implications of 6+ degree warming in the range of just a few percent of the overall GDP. As Natasha put it,

Elmendorf, testified that the US economy would barely notice changing environmental conditions such that we should be more worried about potential economic damages and job losses caused by climate mitigation.

The already desertifying American Southwest has cost the agricultural sector billions of dollars every year, just in California, and wildfires are expected to increase as a result. Increased floods in the Midwest have cost farmers and municipalities dearly, as well as costing the federal government aid dollars sent to clean up disaster areas. Those are just two projected impacts of climate disruption, drought and flooding, that have been happening at a minor scale compared with what will occur during projected changes.

In fact, the Midwest is also expected to get heat waves within our lifetimes that would prevent corn crops from setting seed. Does Elmendorf live in a cave that this prospect means nothing to him?

Elmendorf really doesn’t see the US economy being much affected by such events increasing in magnitude, spread across the entire globe? The killer heat waves, coastal inundation, environmental refugees, reduced water supplies, none of that will put a dent in the smoothly purring economic engine we’ve got going here?

Preposterous.

Indeed, “preposterus”.

What is astounding is that other than a few blog posts like Brad’s, Natasha’s, and here at GESN, Elmendorf’s (and CBO’s) utter disconnect with any common sense (and scientifically sound) understanding of the risks of catastrophic climate change seems to have been missed in public discussion and, well, entirely glossed over by traditional media: science, environmental, energy, or any traditional media journalists.

The CBO analysis utterly misses massively important system-of-system benefits from moving toward a carbon-free economy (such as reduced cancers due to ending fossil fuel pollution). And, while CBO has been explicit about not including the values of mitigating climate change in their analysis, what has not been highlighted before Brad’s work is how their utter disconnect from any sensible valuing of the benefits of reducing catastrophic climate change justified their decision to exclude that ‘insurance policy’ and risk reduction from their work.

Too many people have celebrated the CBO’s work as showing that ‘it will only cost a postage stamp a day’ to mitigate climate change, the reality is that a real calculation of the value of that mitigation combined with a valuing of positive benefits (such as improved educational performance) would show that CBO’s economists have the sign wrong in front of the number: aggressive action to mitigate climate change won’t carry  a minus sign (cost) but a plus sign  (benefit).

As Natasha concludes

If the CBO and the media are incapable of looking at the facts and recognizing the truth of the situation, they need to go back to school.

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Tags: analysis · climate change · climate legislation · Congress · financial policy · Global Warming

3 responses so far ↓

  • 1 Super Freaks of the Economics Profession // Oct 20, 2009 at 9:15 am

    […] to this, Natasha Chart’s recent comment: It’s remarkable how often economists ignore physical reality. Whether they’re suggesting that […]

  • 2 McKinsey’s Systematic Under Valuing of Efficiency | CleanTechies Blog - CleanTechies.com // Jan 19, 2010 at 5:02 am

    […] CBO, Media in Need of Remedial Science Classes highlighting how CBO work significantly understates potential costs from unchecked climate chaos. […]

  • 3 “All costs, no benefits …” // Jun 16, 2010 at 6:05 am

    […] action to mitigate climate change is affordable.  Sadly, however, the EPA has continued the strong economic tradition of robust analysis of costs of action with dramatic understating of the be… in the domain of climate mitigation.  As Michael Livermore put it, “all costs, no benefits […]