Are technological fixes often far simpler and cheaper than doomsayers imagine?

Pilita Clark provides an excellent review of a recent new book by Gernot Wagner and Martin Weitzman. The first line of the review will make you continue.

‘Climate Shock: The Economic Consequences of a Hotter Planet’, by Gernot Wagner and Martin Weitzman

When economists think about climate change, some think a lot about horse manure. Specifically, they consider the great manure crisis of the late 1800s, when the world’s cities relied on horses for transport to such an extent that a public sanitation disaster loomed. Fine minds set to work on a crisis that The Times of London estimated in 1894 was so dire that in 50 years every street in the city would be buried 9ft deep in horse droppings.

As it turned out, a simple solution was at hand: not new laws or policies but the motor car, a technical innovation so successful that the equine pollution problem was swiftly overcome.

The lesson is obvious for anyone worried about climate change, say economists such as Steven Levitt. In 2009’s SuperFreakonomics he and co-author Stephen Dubner used the tale to argue that technological fixes are often far simpler and cheaper than doomsayers imagine; and global warming could be addressed by so-called geoengineering, or manipulating the environment to halt rising temperatures.

The dangerous allure of such thinking is a central theme tackled by two other economists: Gernot Wagner, an academic who works for the US Environmental Defense Fund, and Harvard professor Martin Weitzman in Climate Shock: The Economic Consequences of a Hotter Planet.

They are right to do so. Interest in geoengineering is mounting as warming carbon dioxide emissions have continued to rise despite decades of UN climate negotiations, billions of dollars worth of renewable energy subsidies and sporadic attempts to price carbon. The failure of those efforts underlines the fact that climate change is, as the authors point out, the ultimate “free rider” problem. It is hard to get people to limit their own pollution when they bear the costs and the benefits are global.

Geoengineering, on the other hand, is so cheap that one country alone could conceivably carry out a plan discussed by Levitt and many others: mimic the 1991 eruption of the Mt Pinatubo volcano in the Philippines, which cooled global temperatures by about 0.5C the following year, by shooting sulphur dioxide into the stratosphere to create a giant sunshade.

The cost could be lower than that of cutting emissions, say Wagner and Weitzman, while the impact could be huge — which, they argue, means geoengineering turns the standard economics idea of climate change on its head, from a “free rider” to “free driver” problem.

But the risks of such geoengineering are myriad — from ozone depletion to fast-rising temperatures should Mt Pinatubo-style techniques ever stop — because the underlying emissions causing warming would continue.

A further obstacle to reducing emissions is the lack of certainty about precisely how much warming they will cause. This is another theme of Climate Shock, a title chosen to highlight one widely misunderstood aspect of climate change: it is not enough merely to stabilise annual emissions. They have to be slashed to near zero to bring down C02 concentrations, which in 2013 rose to 400 parts per million, well above the 280 ppm of pre-industrial times.

Dissecting the latest scientific findings about how much global temperatures are likely to rise as C02 in the atmosphere doubles, the authors conclude there is about a 10 per cent chance of temperatures eventually exceeding a catastrophic 6C. Homeowners take out insurance policies against devastating fires that are almost always less likely than this.

The correct economic solution has been well understood for years, they argue: stop subsidising fossil fuels by about $15 a ton of C02 globally, and create a price of at least $40 a ton. But Climate Shock advises economists to stop demanding a global carbon price and start working on more politically possible solutions, such as fuel economy standards. That sounds dull compared with geoengineering. But it is also infinitely safer.

This is not a book for people deeply versed in climate policy, few of whom will find its contents remotely shocking. For the intelligent lay reader wanting a lively, lucid assessment of the economic consequences of global warming, however, it is well worth reading.