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Ackerman’s response to Bauman

A short while ago, stand-up economist Yoram Bauman reviewed Frank Ackerman’s ‘Can We Afford the Future?: the Economics of a Warming World’, a layman’s guide to one of the most pressing and complex questions of out time, over on Nature Reports Climate Change.

Ackerman objected to the review and I invited him to respond with a letter to the editor. You can find it in the latest issue, but I’ve also copied it here:

To the Editor – Yoram Bauman has written a hostile and dismissive review of my book, Can We Afford the Future?: The Economics of a Warming World (Zed Books, 2009). With my book, he says, “the bumper-sticker culture of cable TV news has finally reached … the economics of climate change.” I allegedly failed to recognize the virtues of mainstream economics and oversimplified the subject “for the masses”.

Oddly enough, Bauman is best known for performing as a stand-up comedian making fun of mainstream economics. His signature performance offers a flippant ‘translation’ of ten principles of economics from a leading textbook. How could a stand-up comic dislike bumper stickers and communication with “the masses”? I plead guilty to summarizing a complicated subject in four provocative, non-technical statements suitable for printing on bumper stickers. This was an intentional strategy to combat the ‘eyes glazing over’ effect that technical economics has on most people, and to lead the reader into substantive discussion of the big issues about the costs and benefits of climate change mitigation.

Bauman also didn’t like my chapter criticizing Bjørn Lomborg, the self-proclaimed “skeptical environmentalist”. As I demonstrate, Lomborg systematically misrepresents economic and scientific research, announcing unsubstantiated, undocumented opinions as fact. Bauman leaps from one small dispute to the surprising claim that I am operating at the same level of partisan distortion as Lomborg.

He additionally takes me to task for failing to notice how many economists have signed statements about the seriousness of climate change, and for disagreeing with mainstream economists on climate policy. In sections of the book that Bauman seems to have overlooked, I quote recent work by some of the best-known economists writing about climate change, documenting their failure to understand the urgency of the issue. Their models and analyses trivialize the climate crisis, making it seem that tweaking the market with a carbon tax might be all that we need. I’m not opposed to a carbon tax or allowance trading system, but I think much more is needed. I also displeased Bauman by advocating government-funded clean-energy R&D. As Bauman notes, this is a view that I share with the Obama administration.

Details aside, here’s the underlying issue: climate change can’t be both a fundamental threat to the conditions that support human life, according to scientists, and a mid-sized policy puzzle that can be solved by an adjustment in tax rates, according to economists. One profession or the other must be wrong about the magnitude of the problem — and the total failure of climate sceptics’ attempts to cast doubt on the science suggests that it’s not the scientists who are in error. That’s why it’s time to create a new economics of climate change.

Frank Ackerman is an economist at the Stockholm Environment Institute-US Center, located at Tufts University. He has written extensively about the economics of climate change and other environmental problems.


Olive Heffernan


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    Yoram Bauman said:

    The editor invited me to respond here, so I will do so as briefly as possible:

    1) It’s completely unreasonable for Ackerman to compare his “bumper stickers” with my “blah blah blah” comedy routine: one is serious and one is comedy. For what it’s worth, however, I take Ackerman to task for the same thing that many people think I take Mankiw to task for: oversimplifying.

    2) Regarding Ackerman’s criticism of Lomborg, he claims that Lomborg’s book “is riddled with inaccuracies.” He may be right about this—-my intent is certainly not to defend Lomborg—-but Ackerman doesn’t substantiate this claim in his book. Instead he gives two just two examples of Lomborg’s “repeated errors”. One is his assertion that Lomborg refers to A1B as a “standard” or “business-as-usual” scenario. This is a relatively minor quibble and in fact Google quickly brought up a transcript that has Jim Hansen saying something similar: “A1B, that’s a typical business-as-usual IPCC scenario consistent with the growth rates in CO2 emissions that we’ve had in recent decades”. Ackerman’s other example is the Harberger triangle business I wrote about in my review, which is much closer to being Econ 101 than an “abstract academic quarrel”; if I remember correctly this stuff is taught in intermediate microeconomics, and the fact that neither Ackerman nor his friends/editors/proofreaders caught this is in my professional opinion outrageous. Then Ackerman fails to see Lomborg’s footnote on the matter, which makes the whole situation even worse. What is going to happen when people go up against Lomborg armed with Ackerman’s inaccurate attacks on Lomborg’s supposed inaccuracies?

    Later on in Ackerman’s book he take Lomborg to task for his “certainty about what ‘all’ economics looks like” and says that “not everyone who uses traditional economic arguments and methods comes up with the same answers as Lomborg”. I take it that what Ackerman is accusing Lomborg of saying is that conventional economics writes a misleading script that tells us to go slow, and I think Ackerman’s accusation here carries some weight. But look at what Ackerman writes on page 131 of his own book: “A good first step is to throw out the misleading script written by conventional economics, which tells us to go slow.”

    Look, Ackerman can’t have it both ways. Either conventional economics tells us to go slow, in which case he can’t attack Lomborg for saying as much, or—-and this is my position—-conventional economics tells us a variety of stories, in which case Ackerman and Lomborg are both guilty of misrepresenting that variety.

    3) As for the “underlying issue” that Ackerman brings up at the end of his response above: I agree with him that small changes in carbon tax rates are incompatible with the view that climate change is an immediate and fundamental threat to human life. But not all scientists think that climate change is an immediate and fundamental threat to the conditions that support human life (show me where the IPCC says that!), and—-much more importantly—-not all economists think that small changes in carbon taxes rates are enough. I for one would recommend a revenue-neutral carbon tax shift with relatively large changes in carbon tax rates. So I don’t think Ackerman’s “with us or against us” view is helpful.

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    Frank Ackerman said:

    Yoram Bauman alleged, in his review, that my book was comparable to the writings of Bjorn Lomborg in the level of inaccuracy regarding climate change. In support of this strange claim, he mistakenly suggested that I presented only two examples of Lomborg’s errors; moreover, Bauman chose to defend Lomborg in each of those cases.

    The first concerns Lomborg’s reference to “A1B, described as the business-as-usual scenario”; Lomborg supported this only with a citation to a very technical article on climate modeling that never mentions A1B. Of course A1B is “a” business-as-usual scenario, as Jim Hansen observes in the statement quoted by Bauman; but it is not described as “the” business-as-usual scenario (suggesting that it is privileged over the other IPCC scenarios) by Hansen or anyone else. And surely it is an error for Lomborg to support such a statement solely by citing an article that never mentions A1B.

    The second concerns Lomborg’s attempt to extrapolate from the effects of a $1 tax to the effects of a $30 tax. I offered one way to do this extrapolation; Bauman is right to point out that there is another way to do it. But Lomborg’s estimate of the effects of a $30 tax, from an unnamed model, agrees with neither of these methods, and is not supported or documented in any way. Lomborg wanted to tell us that a moderate carbon tax would cost $7 trillion, but didn’t choose to tell us what model produced this estimate, how the number was calculated, or even how many years of costs it represents.

    Here are a few other things that I said about Lomborg, which apparently escaped Bauman’s attention. Lomborg’s bibliography reveals his biases: it contains nine works by the noted climate skeptics Indur Goklany, Richard Lindzen, and Patrick Michaels, but none by climate scientists James Hansen, John Holdren, John Houghton, James McCarthy, and Stephen Schneider. Lomborg cites 11 works by Roger Pielke, a leading figure who doubts that climate change has an effect on the intensity of hurricanes, but none by Kerry Emanuel, a leading figure whose research suggests that climate change will lead to more intense hurricanes.

    Lomborg relies heavily, in his recent book on climate change, on the results of the so-called “Copenhagen Consensus,” a media event he organized which purported to show that there were sound economic reasons for placing climate change last on the agenda of major international policy concerns. I provided a detailed critique of the Copenhagen Consensus “findings,” which I will not repeat here in the interests of brevity; if you’re interested, read my book.

    Lomborg made several statements about what “all” economists or economic modelers currently believe about climate change; I quoted one of these statements and pointed out that it was produced by a workshop attended by 19 people in 1996. Along the same lines, Lomborg referred to a conversation with one economist, Richard Tol, who favored a $2 per ton tax on CO2, as expressing the results of economic analysis in general; Lomborg then dismissed, without identification or discussion, “one radical report” that suggested the need for a much higher tax. That “radical report” is in fact the Stern Review, commissioned by the British government.

    As Bauman notes, I am critical of conventional economics, which all too often tells us to go slow on climate policy. But Lomborg doesn’t just say that; he says that “all” economics speaks with a single voice – and that voice tells us to go very slow.

    Finally, I said, in response to Bauman’s review, that climate change is a fundamental threat to the conditions that support human life; I never said that it was an immediate threat. The difficulty of creating understanding and support for climate policy stems precisely from the lack of immediacy: by the time the threat is immediately apparent, it will be too late. That’s why we need a new economics of climate change, to support a new approach to climate policy. I urge those who agree, or want to know more, to read my book.

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