David Henderson
Westminster Business School
Dr. David Henderson is currently a Visiting Professor at the Westminster Business School. He is a former chief economist of the Organization for Economic Co-operation and Development (OECD). Before this he had worked both as an academic and as a national and international civil servant, and since leaving the OECD he has been an independent author and consultant and has held visiting appointments in several countries.
In 2003, Prof. Henderson, with co-author Ian Castles, issued a scathing critique of the future emissions scenarios propogated by the United Nations’ Intergovernmental Panel on Climate Change (IPCC). His book on so-called “corporate social responsibility,” The Role of Business in the Modern World, was recently published in America by the Competitive Enterprise Institute.
The chat will begin at 2pm EST on Thursday, January 7. You can send your questions now to chat@globalwarming.org . Questions and answers will be posted as Dr. Henderson answers, beginning at 2pm. Refresh your screen regularly to see questions and answers.
Moderator: Welcome, everyone, and please keep the questions coming. We’re having a slight technical delay getting started.
Moderator: Thanks so much for joining us, Dr. Henderson. I’d like to start things off with a kind of general question. Could you tell us how you came to be interested in greenhouse emissions; and what, in a nutshell, you found to be the primary problem with the IPCC emissions scenarios?
Henderson: I became involved with IPCC-related issues through an Australian friend Ian Castles, formerly Head of the Australian Bureau of Statistics. We became joint authors of a critique of the IPCCs treatment of economic issues. Our critique focused on, though it went beyond, the Special Report on Emissions Scenarios (SRES), prepared for the IPCC, and published in 2000.
Two aspects of our critique of the SRES are:
For the base year of 1990 it compares output across countries on the basis of market exchange rates (MERs). These comparisons greatly overstate the differences in GDP per head between developing regions and OECD member countries.
It builds in, for reasons that are open to question, rapid convergence in GDP per head between developing regions and OECD member countries. By thus assuming the substantial closure of a greatly overstated initial gap, it arrives at projections of output and GDP per head for developing regions which are higher than they would have been if the 1990 starting point had been correct, and high by comparison with other projections
Our critique covers not only the results of the exercise, in the form of specific projections of emissions, but also the approach, the analytical basis of parts of the Report.
Moderator: Tom in Texas has a series of detailed questions:
Has the panel actually modeled the impacts of 5%, 10% and 20% industrial and utility greenhouse gas emission reductions by developed countries on the perceived problem? This would imply for each 2 separate cases; one where developing countries’ emissions are held constant and one where they increase at at least the rate of the last 5 years. If so, what are the impacts and how much time is likely to elapse before the impacts
become observable, if at all?
Henderson: Sorry, but I don’t know the answer.
Moderator: Fred in DC wants to know:
Do you expect the UK Conference that PM Blair will hold this February to address economic issues?
Henderson: I have not seen any agenda, but I would be surprised. The conference is dealing with scientific issues, and I think this does not include economics.
Moderator: Barb in Maryland:
I have read that even some financial institutions such as Citibank and HSBC are “reducing” their CO2 emissions by supporting projects that reduce greenhouse gases. Who benefits from those projects? Are they connected to environmental groups that pressure companies to give money or are they generally independent projects?
Henderson: Your information is correct. The benefits that are counted on are to the environment – through reducing CO2 emissions, which are viewed as a pollutant, preserving rain forests, etc. I think the banks are in part responding to pressure from NGOs, but I believe that they genuinely believe that they will be doing good (as well as earning a reputation for doing good, while keeping out of trouble).
Moderator: Kevin wants to know:
Do you think the crtiques put forth by yourself and other economists have had or will have an impact on the way IPCC draws its scenarios? Why or why not?
Henderson: Along with our critique, our suggestions for change have been rejected by the IPCC. The main proposals that we have made are three:
That the SRES, because it is open to serious criticisms, should not be taken as the basis and starting point of AR4: an alternative and firmer basis should be sought, through less elaborate and more short-cut procedures than those of the SRES.
That in assessing possible future developments in the world economy, and ways of projecting them, the involvement of economic historians and historically-minded economists should now be ensured for the first time.
That more generally, and going well beyond scenario-building, the IPCC process should be broadened, in particular through the active involvement, first, of national statistical offices in member countries, and second, of ministries of finance and economics.
The IPCC has not accepted these suggestions.
It has determined that the SRES scenarios provide a credible and sound set of projections, appropriate for use in the AR4.
It and its member governments appear as fully content with the present established procedures and arrangements for participation. An IPCC official statement that you might be interested to see says of the Panel, in its opening paragraph,that
It mobilises the best experts from all over the world, who work diligently on bringing out the various reports The Third Assessment Review of the IPCC was released in 2001 through the collective efforts of around 2000 experts from a diverse range of countries and disciplines. All of IPCCs reports go through a careful two stage review process by governments and experts and acceptance by the member governments composing the Panel.
Moderator: John wants some data:
Until last year, the DOE furnished in October the list of the emissions from the United States for the previous year. I did not find any such list last year which would have covered the year 2003. Is this information available anywhere?
Henderson: Emissions data are prepared and published by the CDIAC, based in the US. You can get the numbers from their website. However, the last published data that I have seen don’t go beyond 2000.
Moderator: I’d like to follow up on the reader’s earlier question about Citibank et al. myself. Where do you see “global warming” issues headed vis-a-vis “corporate social responsibilty”? Will US-based multinationals succumb to NGO and EU pressure and “voluntarily” reduce or “trade” emissions, passing costs on to consumers?
Henderson: The pressures are on all companies, especially the big multinationals, and not just on American corporations. They come from a variety of sources, official and unoffcial, not just from NGOs. It is true that the EU has embraced the cause of emissions reductions more wholeheartedly than other governments, but there are no climate-sceptical governments. Don’t forget that the US (and Australia) signed up to the UNFCCC, along with all the rest (including developing countries). Both of them are taking action accordingly.
Moderator: We’re up on the end of the hour, here. So this should be the last question… Christina in DC wants to know:
Has the IPCC done a thorough economic analysis of what the economic and social costs would be of reducing CO2 to a level that would make a real temperature impact according to their climate models? (My understanding is that the Kyoto protocol levels wouldn’t have much of an effect on the temperature)
Henderson: You are right about the effects of Kyoto. I don’t think the IPCC has done work of the kind you refer to, but various people and government agencies have. Best to ask the Energy Information Administration (in DC)?
Moderator: Thanks so much for joining us, Dr. Henderson. Any final remarks? Where is this all heading?
Henderson: What should now be done? Here is my answer.
A way forward
The economic content of AR4 can be strengthened only if new participants are brought into the process, and this can be achieved only if and in so far as member governments act accordingly: the IPCC milieu appears impervious to unofficial criticism. In this context, it is the central economic departments of state treasuries, ministries of finance or economics, and organisations such as the US Council of Economic Advisers that have a potentially key role. Up to now, and despite the large amounts that are at stake, they have been content to leave the handling of economic issues within the IPCC process to the departments and agencies directly concerned. The questionable treatment of these issues by the IPCC and its sponsoring organisations, which Castles and I have drawn attention to as independent outsiders, has apparently not been noticed by a single official in a single finance or economics ministry in a single country. It is high time for this situation to change, and for these latter departments to become involved.
Fortunately, a straightforward route to their participation exists for the taking. For the economic departments and agencies in OECD member countries, an instrument is to hand for their prompt collective involvement: it is the OECD itself. They should act now to ensure that IPCC-related economic issues are placed on the agenda of the OECDs Economic Policy Committee.
PS The IPCC press release dismissing our work makes a good read: it’s on their website
Moderator: Very interesting. Thanks again, Prof.
Henderson: Over and out… Regards to all.
Moderator: And our apologies to anyone who’s question didn’t get through. Keep checking GlobalWarming.org for our next live chat with the experts.
We begin, as is our want, with the bare annual mean temperature track for the region 64N-90N. We use this particular dataset since the Arctic Circle describes a line of latitude near but south of the north pole marking the northernmost point at which the sun is visible on the northern winter solstice and the southernmost point at which the midnight sun can be seen on the northern summer solstice – roughly the parallel of latitude approximately 6633′ north and we are thus confident of having captured the boundary between the North Temperate and North Frigid zones.
Of course, some people want (and others need) rather more aggressive highlighting of apparent trends and so we present the same data with shading and trend lines added. This next graphic shows the very same data with split trends and shading to highlight the warming trend 1880 through 1938 (the warmest year in the series). Had the pre-1938 trend continued there would certainly be some Arctic warming to talk about. Just as well we are not staunch advocates of post hoc, ergo propter hoc or we’d be claiming that increasing the rate of atmospheric CO2 increment stops Arctic warming.
We would be remiss if we did not point out the most significant warming in the series.
And now, trends 1918-1938 and 1966-2003 compared (yes, we know data is available in the series to include 2004 but the region’s annual mean temperature fell two-thirds of one degree C from the partial series maximum value of 2003).
Finally, let’s look at the low-high trend values for the warming periods before and after the cooling demonstrated 1938 – 1966.
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