Economic Impact of Global Worming is more of a Hoax

The temperature on New Year’s Day in Chicago was a balmy 50 degrees F. More evidence of global
warming? Hardly.

The five New Year’s Days with the highest temperatures occurred in 1876, 1897, 1892, 1890, and
1891, all long before human greenhouse gas emissions could have played a role in changing climate.
The one thing we know for sure about the weather is that it is always changing.

But the warm weather will fuel more hot rhetoric about global warming, a public policy issue that
could have a major effect on our freedoms and our pocketbooks in the coming years.

Why it Matters

Global warming is the biggest environmental issue of our time. Its political and economic impacts
will be larger than those associated with any other environmental issue.

Government power: Public policies being proposed at the international, national, and state levels in
the name of “stopping global warming” would result in a massive increase in the size and power of
the state. To reduce emissions, governments must raise energy costs directly, with taxes, or
indirectly, with mandates and subsidies.

Either way, hundreds of billions of dollars a year in wealth or economic activity will be sucked up
and redistributed by governments. For advocates of limited government, the debate over global
warming is one of the pre-eminent issues of our time.

Economic harm: Energy is the “master resource,” used in the creation of nearly all other goods and
services. Making energy artificially scarce therefore imposes enormous economic costs. Global
warming legislation being considered by Congress would more than cancel out the beneficial effects
of the Bush tax cuts.

Reducing greenhouse gas emissions even modestly is estimated to cost the average household in the
U.S. a cool $3,372 per year and would destroy 2.4 million jobs. Electricity prices would double, and
manufacturers would move their factories to places such as China and India that have cheaper
energy and fewer environmental regulations.

Social movements: In 2004, the leftist leaders of the environmental movement in US decided to
make global warming the “global crisis” that would save their reputations, create an excuse for a full
assault on businesses and capitalism, increase their influence over the Democrat Party, and fund their
organizations in perpetuity. The movement’s leaders recognize that losing on this issue would
further discredit a movement that has already squandered the public good will earned during the
1960s and 1970s.

On this aspect of the global warming debate, the leading environmentalists are correct. If they win
this issue, billions of dollars in government funds will flow into the coffers of radical environmental
groups, giving them the resources and stature to implement other parts of their anti-technology, anti-
business agenda.
A funny thing happened on the way to saving the world’s poor from the ravages of global warming.
The poor told the warming alarmists to get lost.

This spring, the Geneva-based Global Humanitarian Forum, led by former U.N. General Secretary
Kofi Annan, issued a report warning that “mass starvation, mass migration, and mass sickness”
would ensue if the world did not agree to “the most ambitious international agreement ever
negotiated” on global warming at a forthcoming conference in Copenhagen.

According to Mr. Annan’s report, climate change-induced disasters now account for 315,000 deaths
each year and $125 billion in damages, numbers set to rise to 500,000 deaths and $340 billion in
damages by 2030. The numbers are hotly contested by University of Colorado disaster-trends expert
Roger Pielke Jr., who calls them a “poster child for how to lie with statistics.”

But never mind about that. The more interesting kiss-off took place in New Delhi late last month,
when Indian Environment Minister Jairam Ramesh told visiting Secretary of State Hillary Clinton
that there was no way India would sign on to any global scheme to cap carbon emissions.

“There is simply no case for the pressure that we, who have among the lowest emissions per capita,
face to actually reduce emissions,” Mr. Ramesh told Mrs. Clinton. “And as if this pressure was not
enough, we also face the threat of carbon tariffs on our exports to countries such as yours.” The
Chinese—the world’s largest emitter of CO2—have told the Obama administration essentially the
same thing.

Roughly 75% of Indians—some 800 million people—live on $2 a day or less, adjusted for
purchasing power parity. In China, it’s about 36%, or about 480 million. That means the two
governments alone are responsible for one in every two people living at that income level.

If climate change is the threat Mr. Annan claims it is, India and China ought to be eagerly beating
the path to Copenhagen. So why aren’t they?

To listen to the climate alarmists, it’s all America’s fault. “What the Chinese are chiefly guilty of is
emulating the American economic model,” wrote environmental writer Jacques Leslie last year in
the Christian Science Monitor. “The United States passed up the opportunity it had at the beginning
of China’s economic transformation to guide it toward sustainability, and the loss is already
incalculable.”

Facts tell a different story. When Deng Xiaoping began introducing elements of a market economy
in 1980, Chinese life expectancy at birth was 65.3 years. Today it is about 73 years. The numbers are
probably a bit inflated, as most numbers are in the People’s Republic, but the trend line is
undeniable. In India, life expectancy rose from 52.5 years in 1980 to about 67 years today. If this is
the consequence of following the “American economic model” then poor countries need more of it.

But what about all the pollution in India and particularly China? In Mr. Leslie’s telling, CO2
emissions are part-and-parcel with common pollutants such as particulate matter, toxic waste, and
everything else typically associated with a degraded environment. They’re not. The U.S. and China
produce equivalent quantities of carbon dioxide. But try naming a U.S. city whose air quality is even
remotely as bad as Beijing’s, or an American river as polluted as the Han: You can’t. America, the
richer and more industrialized country, is also by far the cleaner one.
People who live in Third-World countries—like Mexico, —tend to understand this, even if First-
World environmentalists do not. People who live in oppressive Third World countries, like China,
also understand that it isn’t just greater wealth that leads to a better environment, but greater
freedom, too.

To return to Mr. Leslie, his complaint with China is that it has become too much of a consumer
society, again in the American mold. Again he is ridiculous: China has one of the world’s highest
personal savings rates—50% versus the U.S.’s 2.7%. The real source of China’s pollution problem is
a state-led industrial policy geared toward production, and state-owned enterprises (especially in
“dirty” sectors like coal and steel) that strive to meet production quotas, and state-appointed
managers who don’t mind cutting corners in matters of safety or environmental responsibility, and
typically have the political clout to insulate themselves from any public fallout.

In other words, China’s pollution problems are not a function of laissez-faire policies and rampant
consumerism, but of the regime’s excessive lingering control of the economy. A freer China means a
cleaner China.

There’s a lesson in this for those who believe that the world’s environmental problems call for a new
era of dirigisme. And there ought to be a lesson for those who claim to understand the problems of
the poor better than the poor themselves. If global warming really is the catastrophe the alarmists
claim, the least they can do for its victims is not to patronize them while impoverishing them in the
bargain.

Global warming isn’t just a scientific issue. Economists are more likely than meteorologists to know
what future emission levels will be, and they say the computer models used to predict future
warming use flawed data, resulting in “garbage in, garbage out.”

Global warming is also a political issue. Each of us, as citizens and voters, must decide how much
power to surrender to governments and environmental advocacy groups in exchange for vague
promises of reducing a small and hypothetical risk that wouldn’t emerge until a century from now.

It’s our freedom and money that hang in the balance. It should be our choice.

Eight Reasons Why ‘Global Warming’ Is a Scam

1. Most scientists do not believe human activities threaten to disrupt the Earth’s climate. More
than 17,000 scientists have signed a petition circulated by the Oregon Institute of Science and
Medicine saying, in part, “there is no convincing scientific evidence that human release of carbon
dioxide, methane, or other greenhouse gases is causing or will, in the foreseeable future, cause
catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate.” (Go to
www.oism.org for the complete petition and names of signers.) Surveys of climatologists show
similar skepticism.

2. Our most reliable sources of temperature data show no global warming trend. Satellite
readings of temperatures in the lower troposphere (an area scientists predict would immediately
reflect any global warming) show no warming since readings began 23 years ago. These readings are
accurate to within 0.01ºC, and are consistent with data from weather balloons. Only land-based
temperature stations show a warming trend, and these stations do not cover the entire globe, are
often contaminated by heat generated by nearby urban development, and are subject to human error.

3. Global climate computer models are too crude to predict future climate changes. All
predictions of global warming are based on computer models, not historical data. In order to get their
models to produce predictions that are close to their designers’ expectations, modelers resort to “flux
adjustments” that can be 25 times larger than the effect of doubling carbon dioxide concentrations,
the supposed trigger for global warming. Richard A. Kerr, a writer for Science, says “climate
modelers have been ‘cheating’ for so long it’s almost become respectable.”

4. The IPCC did not prove that human activities are causing global warming. Alarmists
frequently quote the executive summaries of reports from the Intergovernmental Panel on Climate
Change (IPCC), a United Nations organization, to support their predictions. But here is what the
IPCC’s latest report, Climate Change 2001, actually says about predicting the future climate: “The
Earth’s atmosphere-ocean dynamics is chaotic: its evolution is sensitive to small perturbations in
initial conditions. This sensitivity limits our ability to predict the detailed evolution of weather;
inevitable errors and uncertainties in the starting conditions of a weather forecast amplify through
the forecast. As well as uncertainty in initial conditions, such predictions are also degraded by errors
and uncertainties in our ability to represent accurately the significant climate processes.”

5. A modest amount of global warming, should it occur, would be beneficial to the natural
world and to human civilization. Temperatures during the Medieval Warm Period (roughly 800 to
1200 AD), which allowed the Vikings to settle presently inhospitable Greenland, were higher than
even the worst-case scenario reported by the IPCC. The period from about 5000-3000 BC, known as
the “climatic optimum,” was even warmer and marked “a time when mankind began to build its first
civilizations,” observe James Plummer and Frances B. Smith in a study for Consumer Alert. “There
is good reason to believe that a warmer climate would have a similar effect on the health and welfare
of our own far more advanced and adaptable civilization today.”

6. Efforts to quickly reduce human greenhouse gas emissions would be costly and would not
stop Earth’s climate from changing. Reducing U.S. carbon dioxide emissions to 7 percent below
1990’s levels by the year 2012–the target set by the Kyoto Protocol–would require higher energy
taxes and regulations causing the nation to lose 2.4 million jobs and $300 billion in annual economic
output. Average household income nationwide would fall by $2,700, and state tax revenues would
decline by $93.1 billion due to less taxable earned income and sales, and lower property values. Full
implementation of the Kyoto Protocol by all participating nations would reduce global temperature
in the year 2100 by a mere 0.14 degrees Celsius.

7. Efforts by state governments to reduce greenhouse gas emissions are even more expensive
and threaten to bust state budgets. After raising their spending with reckless abandon during the
1990s, states now face a cumulative projected deficit of more than $90 billion. Incredibly, most
states nevertheless persist in backing unnecessary and expensive greenhouse gas reduction programs.
New Jersey, for example, collects $358 million a year in utility taxes to fund greenhouse gas
reduction programs. Such programs will have no impact on global greenhouse gas emissions. All
they do is destroy jobs and waste money.

8. The best strategy to pursue is “no regrets.” The alternative to demands for immediate action to
“stop global warming” is not to do nothing. The best strategy is to invest in atmospheric research
now and in reducing emissions sometime in the future if the science becomes more compelling. In
the meantime, investments should be made to reduce emissions only when such investments make
economic sense in their own right.

This strategy is called “no regrets,” and it is roughly what the Bush administration has been doing.
The U.S. spends more on global warming research each year than the entire rest of the world
combined, and American businesses are leading the way in demonstrating new technologies for
reducing and sequestering greenhouse gas emissions.
Time for Common Sense

The global warming scare has enabled environmental advocacy groups to raise billions of dollars in
contributions and government grants. It has given politicians (from Al Gore down) opportunities to
pose as prophets of doom and slayers of evil corporations. And it has given bureaucrats at all levels
of government, from the United Nations to city councils, powers that threaten our jobs and
individual liberty.

It is time for common sense to return to the debate over protecting the environment. An excellent
first step would be to end the “global warming” scam.