My column in today’s Fin (subscription) is on Lomborg and foreign aid. Having tried out the full frontal assault in the blog and found my readers generally unconvinced, I decided to take Lomborg and his backers at face value, at least to begin with.
Lomborg argues that, rather than incur the costs of Kyoto, which he estimates at around $US 200 billion per year, the money should be spent on aid to poor countries such as improvements in health and drinking water. This is more than 1 per cent of the GDP of the developed countries as a group, compared to current aid levels ranging from 0.1 per cent of GDP for the United States to 1 per cent for Denmark, Lomborgâs home country.
If Australia adopted Lomborgâs proposal, foreign aid would need to be quadrupled at least. The cost to the budget would be somewhere between $5 billion and $10 billion per year.
Itâs not surprising that the conservative commentariat has endorsed Lomborgâs opposition to Kyoto – they were against long before anyone had ever heard of Lomborg. Whatâs striking is that, without exception, they have either explicitly endorsed or tacitly accepted the second part of Lomborgâs argument, calling for a massive increase in foreign aid.
The position of the Institute of Public Affairs is particularly interesting …
Regardless of whether Lomborgâs argument is put forward in good faith, or merely as a debating point, it is worth taking seriously. There is no investment the rich countries of the world could make that would yield higher returns, even in terms of our self-interest in a less chaotic world, than $100 billion per year allocated to improved health and sanitation in the worldâs poorest countries.
Fortunately, we do not need to choose between Kyoto and aid. As Lomborg and others, both critics and supporters of Kyoto, have pointed out, implementing Kyoto through global emissions trading would amount to a massive foreign aid program as well as being an important first step towards resolving the problem of climate change.
John Quiggin 
That’s very encouraging Prof Q to see you (at last)properly taking Lomborg at face value, instead of ducking the issues by bluster that Bjorn conned you. The key issues I think he raised (after documenting massive missinformation by “environmentalist” lobby groups and pundits) is
(i)the importance in prioritising environmental problems – eg immediate real current issues like water versus conjectural, debateable long term possibilities such as climate change.
(ii)the value of wealth and affluence as providing resources to solve these problems. I feel you have a lot to offer in discussing these two.
John,
Try this argument on for size. Essentially, you believe the right is being dishonest by claiming that it is better to spend tax dollars on foreign aid rather than Kyoto, when in fact, the right doesn’t want foreign aid either.
However, I don’t see anything inconsistent with these two positions. One can argue that the government shouldn’t be spending money on either, but if it is going to spend the money, it should at least spend it wisely and efficiently. Thus, if the goal is to benefit the welfare of humans (rather than non-human benefits to the environment), then foreign aid is a better deal than Kyoto.
I use similar arguments all the time. While I maintain that the government shouldn’t force people to give charity, if it is going to do so, it should do so through negative income taxes rather than through minimum wage laws.
What is wrong with this line of argument?
And of course it still doesn’t settle the hoary old question of what form the aid should take- eg Iraq, Bosnia, Afghanistan, Timor, Solomons, Liberia, etc
And articles such as this from the New Scientist, don’t help the environmentalist cause one little bit.
http://www.newscientist.com/news/news.jsp?id=ns99994216
You’ve made the same argument, but this time you’ve backed it up much better. Well done.
Misha, I don’t reject the kind of argument you suggest, but it is one that easily slides into the kind of ‘bait and switch’ used by Lomborg. I think it’s reasonable to say in response to proposal A, something of the following form “A is dominated by B, and B is dominated by doing nothing, therefore we should not do A”
What is not reasonable is to argue in one forum that B beats than A on the basis of one criterion (e.g. doing good for the poor) and in another forum that B should not/cannot be done on the basis of another criterion (e.g. political practicability).
My objection to Lomborg is precisely that he plays the kind of ‘bait and switch’ game implicit in the second paragraph, pretending that he sincerely favours aid to the poor when it suits him, then forgetting about it when he doesn’t. By contrast, with overt anti-environmentalists, it;s clear that they don’t want to do anything for the poor and are just using an argument of the form in the first para.
Clever column John.
Maybe you should read that article again, Tipper.
Prof Q
Your FIN REV article is clear in revealing that the alleged “low” costs of Kyoto are dependent on carbon credit trading, but Lomborg also made this point clearly in his Melbourne talk.
However there are lots of uncertainties about this trading, even now Russia is seemingly stalling on them and on Kyoto. If it eventually transpires that Kyoto don’t achieve much impact on CO2 levels are they carbon credits likely to take place for long, or even take place at all?
Second, as the earlier posts showed; wouldn’t specific targeting of aid to particular well defined real issues (like water) be more effective than a more massive handover of funds for general purposes as in the credits you (Prof Q) mention. Further, how longer will (western) taxpayers assent to these transfers when the spending of them will be not directly accountable to the people who pay.It’s this possibility that makes me agree with Lomborg, in that dont seem to be politically sustainable.
Sounds like a massive black hole of waste and corruption looming up as far as I can see.
To end, I have just checked with CUP and Lomborgs book was peer reviewed by 3 scientists and one pure economist, so chalk up the recent claim by Paul Erhlich in The Australian (and by several others) that it wasn’t peer reviewed as yet one more example of fact-free comment by a green pundit.
John
Your AFR article tries to make too much out of Lomborgâs preference for spending money on aid for health and sanitation in developing countries instead of implementing the Kyoto Protocol.
First, you make much of the respective views of the IPA and Lomborg on foreign aid. However, I presume that the IPA was sponsoring Lomborg because of his views on the environment and not on foreign aid. I would not expect the IPA to agree with everything he says on every issue, just as I would be surprised if Lomborg agreed with every viewpoint of the IPA.
But that is not the real issue. You continue to avoid the crux of Lomborgâs core argument that Kyoto fails any reasonable cost benefit analysis (a big cost to implement and no significant effect on global warming). Forget about what alternatives there might be, the real question is: are we better of doing Kyoto or doing nothing at all? On the basis of the cost benefit analysis, Lomborg suggests that the answer is a resounding ãnothing at allä.
Having taken Kyoto out of the picture, then we can consider whether there is anything else that rich countries could do to help poor countries. In your article you state ãthere is no investment the rich countries of the world can make that will yield higher returns,…, than the $US100billion a year to improved health and sanitation in the worldâs poorest countriesä. On that issue, you and and Lomborg seem to be in full agreement.
Mark, I responded to Lomborg’s claims and benefits last year in the Fin.
His claim that Kyoto fails any reasonable cost benefit analysis is simply not true.
John, I don’t think your Fin article last year addresses the fact that the general consensus is that the impact on global warming of the Kyoto Protocol is minimal when compared with the IPCC estimates of potential global warming of 1.4 to 5.8 degrees C over the next 100 years. All that Kyoto appears to buy us is an extra few years before that increase is achieved. If that is the case, then I think you would have to use a very, very low discount rate before you would gain a favourable benefit-cost ratio.
What is not reasonable is to argue in one forum that B beats than A on the basis of one criterion (e.g. doing good for the poor) and in another forum that B should not/cannot be done on the basis of another criterion (e.g. political practicability).
I’m still not clear on why you consider this an unreasonable ‘bait and switch,’ given that you grant the reasonableness of the argument “A is dominated by B, and B is dominated by doing nothing, therefore we should not do A.”
Consider the following possibility: Lomborg believes that both A and B are politically impractical, but even if that were not the case, B would dominate A because B is better for the poor than A.
Again, what is the problem with this argument?
Putting the cost of Kyoto in the same way, Mark, you find that the effect is to delay the achievement of the living standard that would have been achieved on New Years Day 2100 until somewhere 10 January and 15 February 2100 (assuming cost between 0.1 and 0.5 per cent of GDP and growth rate of 4 per cent). This is not really a very helpful way of looking at things for most purposes.
But as I’ve pointed out many times, Kyoto is not a solution to global warming, but a low-cost first step towards a solution. A policy to stabilise global climate at something like the current situation (some warming is already inevitable) would probably cost around 5 per cent of world GDP, that is, about the cost of an average recession.
Misha, reread my argument. Lomborg compares A (give money to the poor) to C (Kyoto with no emissions trading) and says A is better. He rules out B (Kyoto + global trading) because it’s politically infeasible.
If you buy the conclusion that A and B are both politically infeasible, then you can’t argue that A should be preferred to C.
Ah, I think I understand your argument now. So would Lomborg agree that Kyoto with emissions trading is a better investment than giving money to the poor, even if both are politically infeasible? If so, I would agree that Lomborg is being inconsistent.
Have you contacted Lomborg to see how he responds to this criticism?
Suppose the rankings are:
A. Money for health and sanitation
B. Do nothing
C. Kyoto plus emissions trading
D. Kyoto without emissions trading
Then you would rule out C and D regardless of political feasibility, but could still argue that A is the best policy.
Now change the rankings slightly:
A. Money for health and sanitation
B. Kyoto plus emission trading
C. Do nothing
D. Kyoto without emissions trading
Then you can argue that A is the best option (albiet politically infeasible), B is OK (but politically infeasible), but you still shouldn’t do D.
I think Lomborg’s case rests on one of these two cases being his assessment of the rankings, wheras John’s case seems to be based on D being better than C.
I was shocked to learn from the IPA in the letters of the Fin today that John is “taxpayer-funded”. apparently this means that he or anybody else in his position should have absolutely no opinion whatsoever if it doesn’t agree with the IPA.
Of course given the tax-deductible status of donations to the IPA by corporates you could indeed argue that the IPA is heavily government funded. Just not directly.
Mark, given your assumptions, Lomborg should be arguing that “Do nothing” is better than “Kyoto without trading”. He doesn’t do this, which is why I say that he is engaged in “bait and switch”.
John
As a newcomer to these issues, I am having difficulty in what are very complex arguments, which are often clouded by emotional responses from both sides. To me the key question is, what are the economic and social costs and benefits and rankings of various options?
Listening to Lomborg at UQ last week, I got the impression that he was arguing that “do nothing” was better than Kyoto. An admittedly selective quote from his book (p.312): “As the Kyoto Protocol is unlikely to be implemented with global trading, simply because of the staggering amounts involved in distributing the initial emission rights and the consequent redistribution, Kyoto represents a waste of global resources.” That is, he seems to be working on the basis of my second set of rankings (in my earlier post).
Given your mistrust of Lomborg can you point me to reputable work which has analysed the costs and benefits of Kyoto and concluded that the benefits outweigh the costs? How does McKibbin’s work fit in to all this?
Andrew’s insightful point is reminiscent of the recent bunfight over the ABC’s putative ‘anti-GW2’ and ‘anti-American’ (oh, dear!) reporting bias. The flavour was a mixture of ‘unpatriotic attitude’ and ‘biting the hand that feeds it’. A bit further back, the issue of the conservatives’ (neoliberals’?) position on freedom of speech was being discussed at this blog.
My understanding is that Australian governments have traditionally interpreted part of their role in maintaining a healthy democratic tradition to be that they should ensure the electorate is exposed to a range of political opinion. Only a scary loss of generality of this understanding in the modern age can account for such issues being raised. Let me re-state my understanding of it. Since I don’t pretend to know everything, I invite correction.
Just as it’s healthy for governments to contribute reasonably to the funding of private schools, it’s also sound policy for them to fund a range of sound political and economic viewpoints, some of which may very well be caustically critical of ‘the hand that feeds them’.
A democratic government is not an analogue of a 1950’s household. And although some of the micro-management principles may well be cross-applicable, it is in no critical sense a ‘corporation’. People like PrQ substantially represent the viewpoints of a large section of the electorate and therefore don’t merely deserve to be heard, their voices must absolutely be heard in this democracy.
Such a position would prescribe neither repealing the IPA’s tax-deductibility nor withdrawing PrQ’s funding. Is the alternative to such a balance conscionable in Australian society?
I had already posted one possible denial at http://www.acutor.be/silt/index.php?id=264
” 1. Thatâs silly. In fact there are reserves of methane in suboceanic floors in more than enough quantity.
A better explanation at :
http://marine.usgs.gov/fact-sheets/gas-hydrates/title.html
”
DSW
My previous post is in response to Tipper one on October 9.
DSW
Mark, one of the big difficulties in this is that, while it’s possible to make reasonably good estimates of the costs of implementing Kyoto and of going on to stabilise CO2 emissions, there are no good estimates of the cost of doing nothing. The only numerical estimate I’ve seen is from Nordhaus and it is both arbitrary (literally plucked out of nowhere) and absurdly low. This is the number that Lomborg is relying on when he says things like “all studies show costs exceed benefits”. A more correct statement would be “Nordhaus’ guess says that costs exceed benefits”.
Most economists who’ve looked at this get numbers less than 0.5 per cent of GDP. Supporters of Kyoto argue that, even if they are hard to estimate, the costs of species extinction etc associated with climate change are going to be much greater than this.
Two points…
1 Whether or not Kyoto is cost-effective, it is likely to cost considerably less than estimated, once there are powerful commercial incentives to innovate. After all, clearing horse manure from the streets of London now costs far less than anyone would have estimated 120 years ago. The real value of Kyoto may lie not in the emissions it saves directly but in the innovation it promotes.
2 Whether Lomborg was promoting particular priorities in the past I can’t say, but he isn’t now. Denmark’s Environmental Assessment Institute, which Lomborg heads, has initiated a prioritisation study, the Copenhagen Consensus, http://www.economist.com/finance/displayStory.cfm?story_id=2478902
“The Economist”, which is a sponsor of the initiative, has always been a strong Lomborg supporter so those whom Lomborg infuriates may suspect it of bias. The article gives the URL for the initiative’s own web site, so you can follow its evolution and make up your own mind.
A BBC report is at http://news.bbc.co.uk/2/hi/science/nature/3534373.stm and quotes Lomborg as saying, “I don’t think I’ve mellowed since I wrote The Skeptical Environmentalist. What I’ve learnt is not to aggravate people over things they think I’m saying, only over what I’m really saying.”
Argumentative readers may wish to now debate whether leaving prioritisation to nine economists (“a tribe,” says “The Economist”, “renowned… for its desiccated view of human welfare”) is an improvement over taking the opinion of one statistician.
And it will be interesting to see if the editor of “Scientific American” feels that it must defend science against the economists as well.