When Idiot Savants Do Climate Economics

The Intergovernmental Panel on Climate Change has assumed Nordhaus is to be trusted. The integrated assessment models used at the IPCC are based on Nordhausian visions of adaptation to warming that only marginally reduces global gross domestic product. If future GDP is barely affected by rising temperatures, there’s less incentive for world governments to act now to reduce emissions.

Nordhaus’s models tell us that at a temperature rise somewhere between 2.7 and 3.5 degrees Celsius (˚C), the global economy reaches “optimal” adaptation. What’s optimal in this scenario is that fossil fuels can continue to be burned late into the 21st century, powering economic growth, jobs, and innovation. Humanity, asserts Nordhaus, can adapt to such warming with modest infrastructure investments, gradual social change, and, in wealthy developed countries, little sacrifice. All the while, the world economy expands with the spewing of more carbon.

His models, it turns out, are fatally flawed, and a growing number of Nordhaus’s colleagues are repudiating his work. Joseph Stiglitz, former World Bank chief economist and professor of economics at Columbia University, told me recently that Nordhaus’s projections are “wildly wrong.” Stiglitz singled out as especially bizarre the idea that optimization of the world economy would occur at 3.5˚C warming, which physical scientists say would produce global chaos and a kind of climate genocide in the poorest and most vulnerable nations.

A journal article published last year declared that Nordhausian integrated assessment models are “inadequate to capture deep uncertainty and extreme risk.” They fail to incorporate “potential loss of lives and livelihoods on immense scale and fundamental transformation and destruction of our natural environment.”

Nordhaus’s work doesn’t appropriately take into account either extreme risk or deep uncertainty.”

In other words, the economist who has been embraced as a guiding light by the global institution tasked with shepherding humanity through the climate crisis, who has been awarded a Nobel for climate costing, who is widely feted as the doyen of his field, doesn’t know what he’s talking about.

Among most scientists, it’s lunacy to discuss optimization of anything anywhere when the globe hits even 2˚C warming. Climate researchers Yangyang Xu and Veerabhadran Ramanathan, in a widely cited 2017 paper, defined 1.5˚C warming as “dangerous” and 3˚C or greater as “catastrophic,” while above 5˚C was “beyond catastrophic,” with consequences that include “existential threats.” The late Will Steffen, a pioneering Earth systems thinker, warned alongside many of his colleagues that 2˚C was a critical marker. At 2˚C warming, we could “activate other tipping elements in a domino-like cascade that could take the Earth system to even higher temperatures.” Such “tipping cascades” could lead quickly to “conditions that would be inhospitable to current human societies,” a scenario known as hothouse Earth.

Drought and heat have already reduced global cereal production by as much as 10% in recent years, according to Steffen. “Food shocks are likely to get much worse,” he wrote in a 2019 piece co-authored with Aled Jones, director of the Global Sustainability Institute at Anglia Ruskin University. “The risk of multi-breadbasket failure is increasing, and rises much faster beyond 1.5˚C of global heating. … Such shocks pose grave threats — rocketing food prices, civil unrest, major financial losses, starvation, and death.” 

Climate change could exacerbate vulnerabilities and cause multiple, indirect stresses (such as economic damage, loss of land, and water and food insecurity) that coalesce into system-wide synchronous failures. … It is plausible that a sudden shift in climate could trigger systems failures that unravel societies across the globe.

2022 report titled “Climate Endgame: Exploring Catastrophic Climate Change Scenarios

What these scientists are describing is global civilizational collapse, possibly in the lifetime of a young or even middle-aged reader of this article.

According to the “Climate Endgame” report, the current trajectory of carbon emissions puts the world on track for a temperature rise between 2.1˚C and 3.9˚C by 2100. This is a horrific prospect. Earth systems analysts tell us that habitable and cultivable land in a 3˚C to 4˚C warming regime would be so reduced and ecosystem services so battered that the deaths of billions of people could occur in the next eight decades or less.

Kevin Anderson, professor of energy and climate change at the University of Manchester in the U.K. and Uppsala University in Sweden, asserts that “something like 10% of the planet’s population — around half a billion people — will survive if global temperatures rise by 4˚C.”

Johan Rockström, director of the Potsdam Institute for Climate Impact Research in Germany and a leading researcher on climate tipping points and “safe boundaries” for humanity, projects that in a 4˚C warmer world, “it’s difficult to see how we could accommodate a billion people or even half of that.”

By contrast, when Nordhaus looked at the effects of 6˚C warming, he did not forecast horror. Instead, we should expect “damages” of between 8.5 percent and 12.5 percent of world GDP over the course of the 21st century.

A 2016 study by economists David Anthoff, Francisco Estrada and Richard Tol of the University of Sussex offers one of the more egregious examples of Nordhausian nonsense. (Tol is one of Nordhaus’s protégés, and Nordhaus is listed as a reviewer.) The three academics boldly assert that shutdown of the Atlantic meridional overturning circulation, or AMOC — a pivotally important Earth system that loops warm equatorial water toward the Arctic and cold water back south — could have beneficial effects on the European economy.

Over the last several thousand years, the AMOC has functioned to keep Europe relatively warm in winter because of the warm water it draws northward from the equator. The slowing and eventual shutdown of this system could plunge Europe and broad parts of the Northern Hemisphere into extreme cold. Such a shutdown is a growing likelihood as glacial melt pours into the North Atlantic and alters the delicate balance of salt water and fresh water that drives the looping current. 

For Tol, Anthoff, and Estrada, however, collapse of one of the Earth systems that undergirds the climatic stability of the Holocene might be a good thing. “If the [AMOC] slows down a little, the global impact is a positive 0.2-0.3% of income,” they concluded. “This goes up to 1.3% for a more pronounced slowdown.” They argued that while climate heating cooks the rest of the world, European countries will benefit from a cooling effect of the current’s collapse.

This sunny assessment comes as a surprise to James Hansen, father of climate science, who has calculated that a massive temperature differential between the poles and the equator would occur with an AMOC shutdown, producing superstorms of immense fury across the Atlantic Ocean. According to Hansen, the last time Earth experienced those kinds of temperature differentials, during the interglacial Eemian era roughly 120,000 years ago, raging tempests deposited house-sized boulders on coastlines in Europe and the Caribbean. Waves from the storms were estimated to have surged inland to 40 meters (131′) above sea level.

Under these extreme conditions, what would happen to shipping lanes, coastal cities and ports, and trans-Atlantic traffic of all kinds? For the climate simpletons Tol, Anthoff, and Estrada, the question doesn’t come up. “It will be a helluva lot stormier on the North Atlantic, especially for Europeans,” Hansen told me in an email. His study team concluded that shutdown of AMOC “is in the cards this century, possibly by mid-century, with continued high emissions.”

It gets worse. Simon Dietz and his fellow economists James Rising, Thomas Stoerk, and Gernot Wagner have offered some of the most ignorant visions of our climate future, using Nordhausian math models. They examined the consequences to GDP of hitting eight Earth system tipping points that climate scientists have identified as existential threats to industrial civilization. The tipping points are as familiar as a funeral litany to anybody schooled in climate literature: loss of Arctic summer ice; loss of the Amazon rainforest; loss of the Greenland and West Antarctic ice sheets; release of ocean methane hydrates; release of carbon in permafrost; collapse of the AMOC; and collapse of the Indian monsoon.

Dietz and friends came to the astounding conclusion that if all eight were tipped, the economic cost by 2100 would amount to an additional 1.4% of lost GDP on top of the roughly 8 to 12% that Nordhaus projected.

Think of this projection in commonsense terms: A negligible effect on world affairs when the Arctic during summer is deep blue rather than white; when the jungle of the Amazon is no longer green but brown savannah or desert; when in Greenland and the West Antarctic, white ice is barren rock. A transformation of immense proportions on the Earth’s surface, in the atmosphere, and in terrestrial biotic communities. Ocean methane hydrates have an energy content that exceeds that of all other fossil fuel deposits. Permafrost holds an amount of carbon roughly twice the current carbon content of the atmosphere. With the weakening or collapse of the AMOC, Europe could be plunged into conditions akin to the Little Ice Age, with drastic reduction of the land area suitable for wheat and corn farming. Increased variability of the Indian monsoon would jeopardize the lives of over a billion people.

“The claim that these changes would have effectively zero impact upon the human economy is extraordinary,” wrote Keen. The reality is that if all eight Earth system tipping points were reached, humanity would be in terrible trouble.

Nordhaus estimates that as economic activity heads poleward with warming, the massive reduction in GDP in the tropics will be offset by optimal adaptation in the Global North. “Massive reduction in GDP,” of course, is not explicitly understood by Nordhaus as food system collapse across the equator, followed by social collapse, mass death, wars, and biblical exoduses that produce cascading nonlinear effects drawing the world into a nexus of unknowns.

Andrew Glikson, who teaches at Australian National University in Canberra and advises the IPCC, has written about the coming era of mass human death, what he calls the Plutocene, the natural successor to the Anthropocene. Global governments, he charges, are “criminals” for ushering in the Plutocene in pursuit of short-term political and economic gain. I first reached out to him during the black summer of bushfires that raged across Australia in 2020. Glikson’s mood was foul then, and it has not gotten better since.

“The governing classes have given up on the survival of numerous species and future generations,” he told me, “and their inaction constitutes the ultimate crime against life on Earth.” Part of the reason for inaction is the false cheer that Nordhaus has spread with his math-genius, climate-idiot models.