Comments on The Skeptical Environmentalist

Statement on Bjørn Lomborg's The Skeptical Environmentalist

March 21, 2007

The Author:  Bjørn Lomborg is a former associate professor in the Department of Political Science, University of Aarhus, Denmark, and currently an Adjunct Professor at Copenhagen Business School.  As a former member of Greenpeace, Lomborg states that his environmental skepticism emerged in 1997 after reading the work of University of Maryland economist Julian Simon.  Simon’s writings offer an economic perspective on environmental pollution/degradation, suggesting that continued global economic development and quality of life improvements are evidence that environmental pollution is not a threat to human society.  Further, future improvements in environmental quality are dependent upon continued economic growth and accumulation of wealth.

The Book: The Skeptical Environmentalist essentially expands Simon’s ideas regarding pollution to address the global environmental movement in general.  The central theme is a discussion of the opportunity costs associated with investment in environmental quality improvements.  In pursuance of this theme, Lomborg places environmentalism at odds with economic development:  the capital invested in improving environmental quality will realize only marginal benefits with respect to human welfare.  As such, a greater return on investment could be realized if capital was directly targeted toward stimulating economic growth and quality of life in developing countries (e.g., education, health care, drinking water, sanitation).  Although there is certainly a correlation between wealth and investment in environmental quality, Lomborg’s book generally overlooks two key issues.  First, many of the current and future obstacles to economic development in developing countries are environmental in nature.  Second, the hypothetical availability of alternative investment does not necessarily mean that such alternatives will be pursued.  

On Global Warming:  In his chapter on Global Warming, Lomborg follows a clear line of reasoning.  He argues that autonomous substitution of energy production (namely solar) will occur by 2100, thereby limiting greenhouse gas emissions to a level corresponding to global warming (by 2100) on the order of 2-3 degrees Celsius.  Lomborg does describe this as significant warming which will cause substantial environmental damage.  Mitigating greenhouse gas emissions will reduce a fraction of the damages.  However, given the perceived high marginal costs of mitigation, Lomborg argues that the “optimal” policy decision is to invest in mitigation only up to the point at which the marginal cost of emissions reduction equals the benefit gained in reduced environmental damage.  This level of mitigation will reduce the total costs associated with global warming (i.e., damages plus costs of mitigation) from $4,850 billion (if no action is taken) to $4,575 billion (saving $245 billion) by 2100.  In comparison, Lomborg estimates that stabilizing CO2 at a doubling would cost $8,500 billion over the same time period and implementation of a Kyoto-like policy (with global trading) would cost $4,759 billion and notes that neither of these two strategies would have significantly greater effects on slowing warming versus his “optimal” policy. Subsequently, the $245 billion saved through Lomborg’s “optimal” policy could then be invested in economic development projects in the developing world.  Meanwhile, the $4,575 billion in climate change damages would have to be paid (either through direct losses or investment in adaptation to prevent losses), but these damages will be readily affordable in a wealthier world of the future.

Lomborg generally supports his arguments with numerous references to published scientific and economic studies, and he presents some valid (but well known) criticisms of uncertainties in the science of climate change.  He acknowledges that the existence of an anthropogenic greenhouse effect is “uncontroversial,” and that the impacts of even the climate change he projects will be costly.  However, the “optimal” policy described above is based upon a series of assumptions that are highly uncertain and/or arguable.  To make his case, Lomborg must downplay the magnitude of future warming (by exploiting scientific uncertainties), downplay the consequences of climate change (by criticizing alarmist projections of impacts), play up the costs of mitigation (using traditional cost-benefit analysis), and play up the affordability and availability of adaptation measures (based upon estimates of future economic growth).  As a result, he essentially presents one possible policy solution to one possible future climate change scenario.  However, the likelihood of the scenario he presents is unknown, but seems as plausible or implausible as other scenarios presented by IPCC.

It is notable that since The Skeptical Environmentalist was published in 2001, the science of climate change has progressed dramatically. Among the advances is the realization that the climate system is more responsive to warming than previously realized. It is consequently unlikely that the damages from continued warming will be as limited as Lomborg assumes. For instance, unlike in 2001, scientists now realize that the great polar ice sheets are losing ice, contributing more than previously assumed to sea level rise. Also, many more impacts of climate change, such as increased drought in the subtropics and increased heavy rainfall events in many regions, have been observed in the intervening years. Reduced ice and snow cover has also been observed globally, and it is clear that many mountain glaciers that provide water for millions of people will be gone before 2100. It appears likely that Lomborg underestimated the rate of climate change, as even climate scientists did, and the amount of damage that would accrue from climate change in the coming century.

Some of the obvious omissions or arguable assumptions in Lomborg’s discussion are listed below:

Science & Impacts

  • Lomborg assumes that future warming will be less than 2.5 degrees C by 2100 and not increase beyond 2100 (assuming the IPCC’s SRES B1 is the likely future emissions trajectory).   However, it is well established that warming will continue for decades after emissions are stabilized, regardless of the stabilization level. It is physically incorrect to assume that climate change stops when greenhouse gas concentrations are stabilized.
  • Lomborg downplays the magnitude of observed climate change by commenting on natural climate variability, but ignores the rate at which the observed warming has occurred. Also, since his book was published, the scientific community has become much more certain of the effect of man-made greenhouse gases on global warming.
  • Lomborg assumes positive climate forcings are overestimated and negative forcings are underestimated in climate models. Work on these factors in the intervening years has shown that positive forcings have not been overestimated, whereas negative forcings have become more certain and are in the range previously assumed.
  • Lomborg assumes climate change will not alter severe weather events, human health, food security or flooding (mostly because of human adaptation). However, there are already examples where observed climate change is increasing challenges for societies with low adaptive potential, such as in Sub-Saharan Africa.
  • Lomborg assumes catastrophic environmental impacts will not occur. As illustrated by Hurricane Katrina in 2005, climatic catastrophes can occur and are very expensive – Katrina was the first natural disaster in human history to exceed $100 billion in damages to physical capital alone. Scientists cannot link Hurriane Katrina’s destructiveness directly to global warming, but its occurrence illustrates how weak Lomborg’s premise is for assessing the potential cost of climate change damages.

Economics

  • Lomborg assumes autonomous technological innovation will lead to decarbonization of energy production by 2100. Yet it is unclear what price signal will stimulate the adoption of new technology while inexpensive fossil fuels, such as coal, remain available.
  • Lomborg’s cost-benefit analysis ignores nonmonetizable damages and secondary benefits of mitigation. However, damages resulting from non-market impacts to human health, ecosystems, and environmental quality, could represent a large portion of the total damage associated with climate change.
  • Lomborg assumes Kyoto is a final rather than initial policy. But The Kyoto Protocol has always been seen as a first policy step. Today, many countries and several U.S. States have committed to significant effort greater than that required by Kyoto and with long-term binding emissions targets. 
  •    Lomborg argues that global carbon emissions trading is not likely to be implemented. Today, however, global carbon trading is a reality. More than 168 countries representing more than 80% of the world’s population now have the ability to trade carbon credits as envisioned by the Kyoto protocol.  The World Bank estimated that the total value of this market in 2005 represented over $2.7 billion U.S. dollars. It is likely that this value will be significantly higher when the commitment period for Kyoto gets underway in 2008.
  • Lomborg argues that consideration of catastrophic events does not alter the results of cost-benefit analysis. This would only be true if the probability of occurrence was so remote as to be almost impossible and/or the resulting damage was very small. While probability estimates of extreme events are currently lacking, this does not mean it is safe to assume they are inconsequential.  
  • Lomborg ignores the positive feedback of economic development in developing countries on greenhouse gas emissions. Today the fastest growing greenhouse gas emitter is China, which is expected to surpass U.S. greenhouse gas emissions in the next few years. Hence, economic improvement in the developing world actually accelerates climate change, changing the equation of impact vs. cost of mitigation.
  • Lomborg ignores the potential of induced technological change to reduce mitigation costs, arguing instead that mitigation costs will increase indefinitely into the future. Yet, on the flip side, he argues that autonomous technological innovation will reduce costs of adaptation.

Therefore, Lomborg presents an analysis that is valid only for a very limited set of criteria and assumptions. His analysis leads him to conclude there are more pressing problems in the world than global climate change, and as a result, global welfare would benefit from diverting attention from climate change to increasing global economic development (particularly in developing countries).   Increasing wealth will subsequently allow climate change damages to be better absorbed by society.  However, interestingly, Lomborg also acknowledges that although mitigation would be costly, significant mitigation could be pursued without substantial adverse impacts on future global wealth.  Furthermore, the world is currently sufficiently wealthy to engage in both mitigation and assist the developing world without dire economic consequences.  This acknowledgement suggests that even if there were some veracity to Lomborg’s skeptical scenario of future climate change, the long-term consequences of having invested in mitigation will be negligible. In contrast, should Lomborg’s scenario underestimate the true damages to the environment (or overestimate the costs of mitigation), the consequences associated with inaction could be dire. Given what scientists have learned about the likely magnitude of future warming and the observed and projected impacts of climate change, Lomborg likely has underestimated the future damages.