MWQ Part III – Solow

MWQ suggests

Professor Quiggin may want to give at least some indication to his readers of what other economists oppose the fixed-proportions models and give at least one cite to one prominent economist who believes some modification of the model structure solves the problems. For example, has Professor Quiggin consulted with, or researched the views of, Robert Solow on this point?

Solow was one of the six Nobel Prize winners who (along with 2000 others) signed the Nobel economists’ statement on global warming on which the Australian economists’ statement was modelled. Lomborg’s preferred source of economic wisdom, William Nordhaus, also signed, so the statement is broad enough to encompass views opposed to Kyoto, but favoring alternative policy responses. But this doesn’t help Lomborg much, since he wants to do nothing at all.

There’s a brief statement of Solow’s view here Federal Reserve Bank of Minneapolis-The Region- Robert Solow Interview (September 2002), in which he refers to both the Club of Rome and to the global warming problem. I’ll quote a couple of paras.

iI you go back to what I wrote about the Club of Rome and “The Limits to Growth,” that reveals where I really live. The one thing that really annoys me is amateurs making absurd statements about economics, and I thought that the Club of Rome was nonsense. Not because natural resources or environmental necessities might not at some time pose a limit, not on growth, but on the level of economic activity—I didn’t think that was a nonsensical idea—but because the Club of Rome was doing amateur dynamics without a license, without a proper qualification. And they were doing it badly, so I got steamed up about that.

The major practical problem in connection with global warming is how do we deal with the poorer parts of the world? How do we intelligently and equitably deal with the part of the world that is now preindustrial or primitive industrial and is “uppity” enough to think it has every right to live as well as Americans or Europeans? How are we going to tell them we developed economically by burning fossil fuels at a tremendous rate, by partially depleting reserves and by polluting the atmosphere, but then tell them not to?

The Club of Rome ‘Limits to Growth’ model was, of course, the most famous example of a fixed-coefficient model producing glaringly wrong conclusions. It was roundly condemned by economists of all stripes. It represents the mirror-image of Lomborg’s position on global warming. The Club assumed that pollution and energy use were in fixed proportions to economic output and concluded that a drastic reduction in economic growth was vital.
Lomborg implicitly assumes that energy use is proportional to income and hence that a reduction in CO2 emissions sufficient to have any real impact on global warming must bring the economy to a grinding halt. Since Kyoto is only a first step in this process, he suggests not even starting.

As Solow observes, economists tend to get pretty steamed about this kind of thing, especially when it’s done ‘without a license’. Of course, economists are not alone, and Lomborg got this reaction from the real experts in most of the fields in which he claimed to have disproved the conventional wisdom.