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Posts Tagged ‘William Nordhaus’

Doug Casey on the Nobel Prize in Economics – Casey Research

Posted by M. C. on August 4, 2019

A combination of hysteria, ignorance of science, and where the money is coming from. Almost all the money for research comes from grants. If you want a grant you have to display the right political attitude. The whole idea of global warming is completely corrupting the science community. If you deny AGW, it’s like denying the Jewish Holocaust in Europe. They won’t even talk to you. You’re certainly not going to get a government grant. Government and foundation grants are what drive science today.

By  October 26, 2018

Justin’s note: Two Americans just won this year’s Nobel Prize in Economics.

William Nordhaus, one of the recipients, was awarded the prize for his work on climate change. Paul Romer, the other recipient, won for research on how regulations and policies can encourage new ideas and long-term prosperity.

The Royal Swedish Academy of Sciences, which selects the recipients, called these the “basic and pressing” economic issues of our time. And I believe many people would agree with that statement.

But Doug Casey isn’t one of them. I know because I recently spoke with Doug about this topic. And, as usual, he had some interesting things to say. See for yourself in today’s Conversations With Casey.

Justin: Doug, what do you think of the latest Nobel Prize in Economics winners? Do they deserve the award?

Doug: The Nobel Prize in Economics should be abolished, along with those for Literature and Peace. All three are passed out arbitrarily, to whomever is currently in fashion, or has the best political connections.

It’s all about Cultural Marxist and socialist intellectuals patting each other on the back. The prestige associated with everything from favorable book reviews to the Nobel Prize legitimizes these people in the eyes of the public. There have been exceptions—but very few, and only enough to keep the Nobels from being total laughing stocks. Left-wing intellectuals talking to left-wing intellectuals about topics of interest to nobody but left-wing intellectuals. All reported on glowingly by their minions in the lickspittle media.

These prizes have about zero relationship to those for Chemistry, Physics, or Medicine—where the achievement is quantifiable, and of objective benefit to humanity.

This year’s winners of the Economics Prize, Romer and Nordhaus, are typical. Neither is a real economist. An economist is someone who describes the way the world works, how men go about producing and consuming in a voluntary marketplace.

These guys aren’t economists. They’re political apologists, who prescribe the way they think the world ought to work, and try to enforce their notions on society. The whole study of economics is quite degraded. It’s now viewed as a subdivision of mathematics, with all kinds of arcane and irrelevant formulae. In fact, economics is a division of philosophy.

Romer, the son of a former Colorado governor, basically puts forward the notion that governments should encourage, or direct, spending to speed up progress. It’s a ridiculous notion, assuming bureaucrats are wiser and smarter than the people who actually created the wealth. It’s an idiotic and destructive view that underlies all socialist and fascist systems. The USSR was an archetype of this thinking. I’m genuinely surprised people don’t laugh and roll their eyes when they encounter these nostrums.

Justin: How about Nordhaus?

Doug: Well, his hobbyhorse is anthropogenic global warming [AGW], and what governments should do about it. This opens up several cans of worms. Number one, does AGW exist? And if it does, should the government do something about it?

Despite everything said in the popular press and in some scientific papers, my belief is that AGW is completely trivial. And what is there is going to drop as improvements in technology make all industrial and consumer processes vastly more efficient. The current hysteria has very little to do with physics, and almost all to do with aberrant psychology.

Can humans change the environment? Of course they can. We do it all the time. Humans have wiped out various species over time—everything from the dodo bird to the passenger pigeon to almost all of the North American buffalo. Humans can have a huge effect on the environment. But does that mean humans are causing AGW?

Contrary to what you hear in the popular media, the proposition is completely unproven. The temperature of the earth has varied radically throughout history, going back 4.5 billion years. This includes an epoch about 500 million years ago when the whole earth was a snowball for as much as 200 million years. Although the earth will wind up fried to a crisp in a few billion years when the sun turns into a red giant, cold is probably a bigger risk than heat. The sun is all that keeps us from approaching the absolute zero of interstellar space.

CO2 is the main focus of the current hysteria. Carbon dioxide levels have varied radically over the eons. In the days of dinosaurs, carbon dioxide levels were many times what they are today, and they’ve basically been going down since Day One.

CO2 is plant food; it is to plants what oxygen is to animals. At about 400 parts per million in the atmosphere it’s really just a trace gas. The vast majority of the so-called Greenhouse Effect is actually caused by potentially much more deadly dihydrogen oxide vapor. When the man in the street is told about this danger, about 10% of them want the government to illegalize it.

Atmospheric CO2 levels are dictated by volcanism and absorption of the gas in seawater. There are thousands of active volcanoes on the planet, spewing CO2, SO2, CH4, and numerous other greenhouse gases in massive quantity. A lot is absorbed by seawater, which has a vastly larger effect on the climate than the atmosphere.

Over the long run, however, CO2 levels are driven by rocks. What happened to all the CO2 when it was, say, 20% of the atmosphere—that’s 200,000 parts per million? It’s now the carbonate part of limestone-calcium carbonate—and other rocks.

But it’s foolish to get hung up on CO2. Many, many things drive the temperature of the earth. Part of it is cosmic rays. They have a huge influence on the amount of cloud cover, which can change temperature immensely. Part of it is the changing tilt in the earth’s axis. Part is the gradual, and cyclical, change in the earth’s orbit around the sun. Part of it may well be the solar system’s orbit around the galaxy, believe it or not.

People have completely forgotten that in the 1970s national magazines were showing images of glaciers knocking over the skyscrapers in New York because they were afraid of a new ice age. People have also forgotten that from about the 1500s through the 1800s, we actually had a little ice age. Before that was the medieval warm period, 700-1400 AD, and before that another cold snap that coincided with the Dark Ages. From roughly 200 BC to 200 AD—coinciding with the rise of the Roman empire—the world was warmer than it is today. They weren’t big CO2 emitters…

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What Universities Won’t Teach College Students About the Economics of Climate Change | Mises Wire

Posted by M. C. on June 10, 2019

projects that if governments “did nothing,” total global warming would reach about 4.1 degrees Celsius. In contrast, if governments implemented the “optimal carbon tax,” as Nordhaus would recommend in a perfect world, then total warming would be about 3.5 degrees Celsius.

And yet, Nordhaus’ own work—not shown in the figure above, but I spell it out here—clearly concludes that such an aggressive target would cause far more damage to humans in the form of reduced economic output, that it would be better for governments to “do nothing” about climate change at all.

I recently gave a talk to a student group at Connecticut College on the economics of climate change. (The video is broken up into three parts on my YouTube channel: onetwo, and three.) In this post I’ll summarize three of my main points: (1) There is a huge disconnect between what the published economics research actually says about government policies to limit global warming, and how the media is reporting it. (2) President Trump taking the U.S. out of the Paris Agreement doesn’t really affect anything on the margin, even if we stipulate the alarmist position on climate change. And (3) If I’m wrong, and human-caused climate change really does pose a dire threat to humanity in the next few decades, then scientists are currently working on several lines of research of practical ways to actually deal with the problem.

The “Consensus Research” Does Not Justify Radical Political Intervention

I first clarified to the students that throughout my talk, I wasn’t going to grab results from right-wing think tanks, or from “fringe” scientists who were considered cranks by their peers. On the contrary, I would be relaying results from sources such as the work of a Nobel laureate William Nordhaus (whose model on climate change policy had been one of three used by the Obama Administration) and from the UN’s own periodic report summarizing the latest research on climate change science and policy.

To demonstrate just how wide the chasm is between the actual economics research and the media treatment of these issues, I described to the students the spectacle I observed back in the fall of 2018, when on the same weekend news came out that William Nordhaus had won the Nobel Prize for his pioneering work on the economics of climate change and that the UN released a “Special Report” advising governments to try to limit global warming to 1.5 degrees Celsius.

The media treatment (sometimes in the same story) presented these events with no sense of conflict or irony, leading regular citizens to assume that Nordhaus’ Nobel-winning work supported the UN’s goals for policymakers.

But that is not true at all. Here’s a graph from a 2017 Nordhaus publication that I included in my presentation:


As the figure shows, Nordhaus’ model—and again, this isn’t cooked up by the Heritage Foundation, but instead was one selected by the Obama Administration’s EPA and was the reason he won the Nobel Prize—projects that if governments “did nothing,” total global warming would reach about 4.1 degrees Celsius. In contrast, if governments implemented the “optimal carbon tax,” as Nordhaus would recommend in a perfect world, then total warming would be about 3.5 degrees Celsius.

Anyone remotely familiar with the climate change policy debate knows that such an amount of warming would terrify the prominent activists and groups advocating for a political solution. They would quite confidently tell the public that warming of this amount would spell absolute catastrophe for future generations.

My point here isn’t to endorse Nordhaus’ model. My point is simply that Americans never heard anything about this when the media simultaneously covered Nordhaus’ award and the UN’s document calling for a 1.5°C limit. And yet, Nordhaus’ own work—not shown in the figure above, but I spell it out here—clearly concludes that such an aggressive target would cause far more damage to humans in the form of reduced economic output, that it would be better for governments to “do nothing” about climate change at all.

With or Without the United States, the Paris Agreement Was Going to “Fail”

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Economists Have Been “Useful Idiots” for the Green Socialists | Mises Wire

Posted by M. C. on June 1, 2019

In the old Soviet Union, the Communists allegedly used1 the term “useful idiot” to describe Westerners whose naïve political views furthered the Soviet agenda, even though these Westerners didn’t realize that they were being exploited in such fashion. It is in this context that I confidently declare that American economists have been useful idiotsfor the green socialists pushing extreme climate change policies. The radical environmentalists were quite happy to embrace the economic concepts of “Pigovian negative externalities” and a carbon tax in the past, but now that it is impossible for economic science to endorse their desired agenda, the activists have discarded the entire field as hopelessly out of touch. Economists who still support a carbon tax and other climate “mitigation policies” should be aware of the bigger picture.

Using the UN’s Own Document to Defeat the Climate Change Agenda

I have been making this case for years. For example, back in 2014 I used the latest (and still most recent) UN Intergovernmental Panel on Climate Change (IPCC) report to show that the then-popular climate change target of 2 degrees Celsius of warming could not be justified by the research summarized in the report. In other words, I used the UN’s own report to show that the popular climate change “cures” would be worse than the disease.

Yet even though they had spent years berating the critics of government action as “climate deniers” who rejected the “consensus science,” in this case — once they realized that the economic models of climate change wouldn’t support aggressive intervention—the environmental activists all of a sudden began pointing out all the things that the UN-endorsed studies left out. Rather than summarizing the cutting edge knowledge on climate science and mitigation policies, the IPCC document turned into a bunch of misleading nonsense that would give ammunition to deniers.

Nobel Laureate Inconveniently Blows Up the Paris Agreement

Last fall, we had another demonstration of the chasm between the actual research and the media/political treatment: William Nordhaus won the Nobel Prize for his pioneering work on climate change, on the same weekend that the UN released a “special report” advising governments on how to try to limit global warming to as little as 1.5 degrees Celsius.

There was just one little problem: Nordhaus’ Nobel-winning work clearly showed that the UN’s goal was insane. According to his model, it would literally be better for governments around the world to do nothing about climate change, rather than enact policies limiting warming to 1.5°C. Rather than aiming for a 1.5°C target, Nordhaus’ most recent model runs indicated that the “optimal” amount of warming to allow was closer to 3.5°C. (To an outsider this might not seem like a huge discrepancy, but it is absolutely gigantic in the context of the climate change policy debate. Many activists would confidently predict that even 2.5°C of warming would spell disaster for our grandchildren.)

The Guardian’s Slam Dunk

Ah, but I got the best confirmation of my quixotic position just this month, when the Guardian ran an editorial with this subtitle (my highlighting):


Does everybody see that? The people at the Guardian already know what the policy answers are, without needing any help from the economists.


My economist colleagues who continue to urge for a “carbon tax swap deal” in order to get rid of “onerous top-down regulations” and enact a simple “price on carbon” are fooling themselves. Whether it’s in a ballot initiative in Washington State—literally designed by an environmental economist, or in the wonky columns of Vox’s climate expert, in the political calculus of Nobel laureate Paul Krugman, or in the FAQ on the Green New Deal itself, the environmental activists in US politics are making it quite clear that they will not settle for such half-measures.

Market-friendly economists chiming in on the American political scene should stop being useful idiots for the green socialists. Whatever the possible merits of a theoretical carbon tax package—in which a regressive hike in energy prices is matched dollar-for-dollar with corporate income tax cuts, and decades of special-interest favoring regulations are thrown out the window in the zeal for efficiency—this is all a moot point. If market-friendly economists succeed in getting their readers to hold their noses and support a carbon tax, they will all learn quite quickly that the deal has been altered.

Originally published at the Institute for Energy Research

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