Is Kyoto a Walk in the Park?
A new “study” of the costs of the Kyoto Protocol is getting attention even before its publication. Written by Christian Azar, a professor of sustainable industrial metabolism with the Department of Physical Resource Theory at Goteborg University, and Stephen Schneider of the Department of Biological Sciences at Stanford University, the analysis will appear in a forthcoming issue of Ecological Economics.
The article is an amazing bit of linguistic jujitsu. Recall that Bjorn Lomborg, author of the Skeptical Environmentalist, argued in his book that the tremendous costs of implementing Kyoto would result in no benefit. It would only delay the advent of predicted global warming from 2100 to 2106, so that the costs of global warming wouldnt be prevented, but delayed.
Azar and Schneider turn that argument on its head. They argue that without action to stop global warming the world will be ten times richer in 2100 than it is now and people on average will be five times richer. Implementing Kyoto, however, would only delay that date by two years. “To be 10 times as rich by 2100 versus 2102 would hardly be noticed,” Schneider told the New Scientist (June 15, 2002). And meeting the Kyoto target would mean that industrialized countries “get 20 percent richer by June 2010 rather than by January 2010.”
The argument is absurd on its face. It isnt the people who will be alive in 2100 that will be harmed by Kyoto, but the people who are alive today. Indeed, it makes no sense for those who are alive now to distribute income to increase the welfare of relatively more wealthy people who will be living 100 years from now. Moreover, if one takes seriously the Energy Information Administrations cost estimates, the Kyoto Protocols affect on GDP will be three times as large as the loss to GDP experienced during the Great Depression.
Ironically, Lomborg was chastised for doing work outside his area of expertise, yet neither Schneider nor Azar are economists and are obviously over their heads when it comes to doing economic analysis. One may ask how they managed to get a paper published in a peer reviewed economic journal if it isnt any good. It turns out that Ecological Economics is a bottom-rung economics journal that is largely a vehicle for leftist economic analysis. Oh, and by the way, Azar is on the journals editorial board.
Warm Winter was Good for the Economy
This last winter was unusually warm in the United States, something that Kyoto advocates have pointed out frequently. It turns out, however, that rather than a gloomy portent, the warmer weather was a godsend, according to a study by Stanley Changnon, chief emeritus of the Illinois State Water Survey, and his son David Changnon, a professor of geography at the University of Illinois at Urbana-Champaign.
“The unseasonably warm, dry and sunny winter led to profound effects on the nations economy at critical times,” said the senior Changnon. “Several economists reported that the weather was a major factor in keeping the United States from falling into a major recession.”
The study, commissioned by the National Oceanic and Atmospheric Administration, asked the Changnons to assess the economic impacts of the warm winter. What they found was that it leads to an estimated $21 billion in benefits due to lower heating costs, lower snow-removal costs, and increased construction. Makers of snow-removal equipment and winter clothing and segments of the tourism industry lost about $0.5 billion, however.
“The warm and dry weather allowed record-setting levels of home construction,” said Changnon. “Housing starts jumped 6.3 percent in January to a seasonally adjusted rate of 1.68 million units the highest level in two years and in February, housing starts reached their highest level since 1949.” This added “an additional $2.1 billion income to the industry.”
“The lack of severe storms also reduced property losses by $3.8 billion, which was a boon to homeowners and the insurance industry,” Changnon said. “Only one weather related catastrophe occurred a major ice storm from Oklahoma to Ohio which caused losses of $265 million. Reduced losses from a lack of snowmelt floods amounted to an additional savings of $1.3 billion for the industry and the government.”
“The more direct impacts of last winter include the costs of heating, reductions in transportation delays, lower highway maintenance costs, and reduced insurance losses,” Changnon said. “The more indirect impacts include retail sales, home sales and tourism.”