Another of many alarming reports about environmental damage that may be linked to climate change. In this case, the result is the emergence of dead zones in the ocean, the immediate cause being changes in currents.

Examples like this emphasise the point that uncertainty about global warming is not a reason for doing less, but a reason for doing more. The known (but uncertain) possible consequences of doing nothing add a lot more to the expected costs than do the known (but uncertain) possibilities of adaptation and so on producing lower-than-expected costs. Even more important, the ‘unknown unknowns’, that is, the possible consequences of which we are not yet aware, are dominated by nasty surprises that await us if we continue changing the climate rapidly.

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I’ve been struck, if not surprised by the eagerness of the usual crowd to jump on the latest story casting doubt on the reality of anthropogenic global warming, in this case the cosmic ray story being pushed by Svensmark and Calder. You would think after so many previous hopes (urban heat islands, satellite data, the adaptive iris, attacks on the hockey stick and so on) have come to nothing, and with the public debate lost beyond any real hope of salvage, that sensible rightwingers would at least wait and see before running their usual boilerplate on stories like this.

At the very least, in this age of Google, you’d think they might check whether the story is actually a new one. In fact, like most such claims, the cosmic ray idea has been around for quite a while. It’s been taken to pieces many times (William Connolley covers the story as Revenge of the killer cosmic rays from hell). It even got batted about on Oz blogs a few years back. Of course, the cosmic ray theory might pan out, but looking at the mountain of evidence pointing the other way, and the failure of so many previous efforts in this direction, you wouldn’t want to bet your credibility on it, assuming you had any.

At this point, I can’t help but be reminded of the running joke in Peanuts where Lucy promises to hold the football so Charlie Brown can kick it. Every time, she tells him, it will be different from all the previous times. Every time, Charlie falls for it. And every time, she pulls the ball away at the last minute.

(Corrected thanks to Paul G Brown).

The much-leaked report of the Intergovernmental Panel on Climate Change will be released today (this evening our time). As everyone knows, it will conclude that it is very likely (more than 90 per cent) that human activity is the main cause of observed global warming. The IPCC best estimate of the impact of business as usual is an increase of around 3 degrees C relative to preindustrial levels by 2100.

There’s still room for debate over the central estimate, particularly regarding the projections of CO2 emissions. For example, the population growth projections used in the estimate are probably too high. On the other hand, I doubt that some feedback effects like bushfires have been fully taken into account. And the climate models themselves are still being refined. Still, it doesn’t seem likely that the estimates are going to be changed much by another 5 years of data and improved modelling, so we can probably take this estimate as settled for the moment.

In many ways, though, the real interest now is in the tails of the distribution. Most of the attention so far has been focused on the lower tail, representing the possibility that global warming will turn out to be modest or non-existent. Denialist arguments that the whole idea of anthropogenic global warming is wrong have received a lot of attention but have been thoroughly refuted by now. On the other hand, if all the questions now in doubt turned out the right way for us (forcings at the low end of estimates, feedbacks from water vapour and so on less positive, historical trends at the low end of the margin of error) and some factors we haven’t yet considered turned out to reduce warming, we could see lower numbers, small enough to make adaption rather than large-scale mitigation the best response (in hindsight).

But all these arguments are symmetrical. If warming could be slower than the best projections, it could also be faster. According to the ABC, the report says gains of up to 6.3 degrees can’t be ruled out, though this figure is from only one model, and does’t fit well with other data.

Although the probability distribution of possible outcomes is essentially symmetrical, however, this doesn’t mean that we can ignore the tails. This is because the costs of climate change grow much more than linearly with the rate of change. Let’s say, for illustrative purposes, that 3 degrees of warming would impose costs equivalent to a 5 per cent reduction in income. Taking account of a small probability (less than 10 per cent) that warming will be very modest, so that costs are zero, doesn’t change the analysis much. By contrast, 6 degrees of warming would be catastrophic – it’s equal to the change since the last Ice Age. Even a small probability of 6 degrees of warming (say 5 per cent)** would greatly increase the expected cost of warming. For plausible levels of risk aversion, the expected cost could be as much as 10 per cent of GDP. So the cost of warming is greatly affected by the probability of these extreme events, and this is an issue that is still unresolved.

The general point here has made a number of times already,notably by Tyler Cowen and Brad DeLong . Uncertainty about the impact of climate change strengthens the case for action to mitigate it.

** This number isn’t really crucial to the argument, but the lower the number the greater the relative importance of the low-probability tail events. A lot of published estimates, like those of Nordhaus and Tol are lower than this, but (as noted in the previous posts) these estimates impute trivial costs to the severe ecological damage that would inevitably arise with 3 degrees of warming.

Suppose that someone proposed using nuclear explosions to melt the Arctic ice cap*, with the aim of opening the Northwest passage and reducing shipping costs, and that this proposal was supported by an analysis showing that world GDP could be permanently increased by 1 per cent, or maybe 3 per cent, as a result.

On the face of it, this seems (to me, anyway) like a crazy idea. Should such a proposal be dismissed out of hand or taken seriously and subjected to benefit-cost analysis or ? And, if we did do a benefit-cost analysis, what would be the result?
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I’ve been reading the PM’s Water Plan announced last week. While the Plan gets the scale of the problem about right, the near-exclusive emphasis on engineering repeats the mistakes of the past on a larger scale.

The big problem is the primary focus on engineering solutions such as lining and piping of channels. No benefit-cost analysis is presented and the aggregate numbers are worrying. The proposal is to spend $6 billion on efficiency improvements that are

aim to achieve efficiency gains of around 25 per cent of total irrigation water use. This programme will generate water savings of over 3,000 GL per year, with over 2,500 GL per year saved in the MDB. Water savings will be shared 50 per cent with irrigators to help meet the challenge of declining water availability, and 50 per cent to address over-allocation and sustain river health.

On the good side, if I read it correctly, the implied return of water to the Murray-Darling Basin is around 1250 GL, which is close to the 1500 GL recommended by the Living Murray program as the minimum needed for sustainability.

But the average cost of $2 million per GL saved ($2000 a megalitre) is very high. While the drought and evidence suggesting a long-term decline in inflows have raised the market price of irrigation water entitlements, it is still below this value in most markets as far as I can observe. Here’s some recent data from the MIA .

By contrast, market purchases of entitlements continue to be treated as a last resort. This is bad policy. Proposed engineering schemes should be tested for cost-effectiveness with a water price set by the value of water to irrigators, as indicated by the price at which they are willing to sell (or buy).
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