What Matt Ridley won’t tell you about climate change impacts

Matt Ridley has a short piece in this week’s Spectator entitled Why climate change is good for the world.

In it, he draws heavily on one paper by the Climate Economist Richard Tol, claiming that this paper supports his view that climate change would be beneficial. Let’s leave aside for now that Tol is careful to stress in this paper ‘the considerable uncertainty about the economic impact of climate change and that negative surprises are more likely than positive ones’.

Let’s instead focus on another finding in Tol’s paper, about which Matt Ridley is silent. Table 2 of Tol’s paper is a review of all the net impacts, including benefits as well as negative impacts, from one more tonne of carbon put into the atmosphere today in the form of carbon dioxide, which is given the name the social cost of carbon. Converting the table to the more usual units of tonnes of carbon dioxide, it shows that the mean social cost of carbon dioxide from all the studies looked at by Tol is $33 per tonne ($120 per tonne of carbon in the original table), if one uses a 1% per year pure time preference rate to discount impacts back to the present day. This pure time preference rate is equivalent to a consumption discount rate of around 3.5% per year, as used by the UK Treasury and others. So, for every tonne of carbon dioxide emitted, the negative impacts outweigh the benefits by about $33.

In fact, Tol’s mean result is expressed in year 1995 dollars, and is for emissions at some date prior to 2009, when the paper was published. Updating to today’s dollars, and assuming conservatively that all the studies looked at by Tol were for 2008, his mean value for the social cost today is $55 per tonne of carbon dioxide. Under the polluter pays principle this is the price that should be attached to all emissions of carbon dioxide today, preferably via a comprehensive carbon tax.

There are of course many higher estimates of the mean social cost of carbon dioxide, such as this one of about $100 per tonne of carbon dioxide. But let’s stay with the source actually used by Matt Ridley and ask if he agrees that the current price on all emissions of carbon dioxide should be at least $55 per tonne, as Richard Tol’s mean results show? If not, why not?


9 Responses to What Matt Ridley won’t tell you about climate change impacts

  1. This is a great response to Richard Tol’s article. Why is it that so many poorly researched and biased articles about climate change get such a high profile in the press? Editors need to do a much better job at making sure they’renot publishing garbage on this topic.

  2. This post does not engage with any of the issues raised in the Spectator. It is about something Ridley did not write about. It overlooks that Ridley argues for a lower climate sensitivity, which may of course also flip the sign of the social cost of carbon. The post, by the way, mixes up tonnes of carbon and tonnes of carbon dioxide – a factor 4 difference.

    • It engages directly with Ridley’s assertion that climate change is good for the world, using your work, on which Ridley draws heavily, to show that this is not true as we look forward.

      I don’t believe I did mix up tonnes of carbon and tonnes of CO2 – I converted the $120 in your table 2 to $ per tonne of CO2 as that is the more usual measure when quoting carbon prices. I have now added a phrase to the post to make this clearer.Please do point out where I mixed things up if you still believe I did.

    • Richard, surely pointing out important things that someone avoids discussing is an entirely reasonable thing to do? That would seem to imply that someone can write an article about how “climate change is good for the world” and that that article would be correct if that author chooses to ignore all the aspects of the evidence that, in fact, suggest that climate change might not be good for the world. Furthermore, if Matt Ridley is indeed arguing for a lower climate sensitivity it would be good to know how he’s justifying that. The current evidence suggests that the ECS is between 1.5 and 4 per doubling of CO2. You can’t simply decide that it is likely on the low side just because that suits your view of how one would like things to be. There is much more evidence to suggest that it is closer to 3 degrees per doubling than 2, for example.

      So, is this largely based on the climate sensitivity being in the low end of the range? If it is, then does that imply that one would conclude that climate change is not good for the world if it turns out that a higher climate sensitivity is actually more likely?

  3. Thanks Chris for your comment on my article and I am glad you concede that I accurately reflect what Richard Tol and others — I cite Bjorn Lomborg, Indur Goklany, Randall Donohue and Ranga Myneni in my Spectator piece — have written, even if you would like me to have added more about the down sides of climate change in the distant future. On the uncertainty that Tol stresses, I also stress this too, so it would be wrong to infer that I do not.

    I do not necessarily share your assumptions about discount rates and you focus on the social cost of carbon. Also have you not confused $/tC (in the paper) and $/tCO2 (in the blog)? It also depends on climate sensitivity assumptions, of course. So I would not accept the $55/tonne cost without further debate, but for the sake of argument let’s accept it for now. Would you agree that this entirely rules out offshore wind, which costs about £200 to save a tonne of carbon dioxide?

    Matt Ridley

    • As I told Richard, I have not mixed up $/tC and $/tCO2. The figure in the original paper is $120/tC, which I have correctly represented as $33/tCO2.

      I would like to see a strong, comprehensive carbon tax as the cornerstone of our climate policy. My calculations indicate it should be $100/tCO2 or more. I don’t think subsidies for specific technologies are a sensible way forward, unless they are to address other market failures.

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