COP28 “No Science” Contention Versus Scientists’ Actual Positions

The president of COP28, Sultan Al Jaber, is entangled in a controversy from which he is trying to escape. At the heart of the issue is a statement he made in a video that there is “no science” supporting the idea that reducing atmospheric carbon dioxide emissions would prevent global temperatures from rising more than 1.5 degrees Celsius above pre-industrial levels.

In the weeks leading up to COP28, two leading climate scientists communicated contrasting views on this issue. Everyone participating in or following the events at COP28 needs to understand these two perspectives and how they relate to Al Jaber’s remark, because the issues are far more nuanced and subtle than how they have been presented.

What scientists say

James Hansen, the world’s leading climate scientist, released a statement saying his new research indicated that future climate sensitivity to carbon dioxide emissions would be 60 percent higher than previous estimates. It is a source of fear. Hansen warns that the planet’s temperature will rise by more than 1.5 degrees Celsius above pre-industrial levels, not only by the end of the century, but over the next six years. Most importantly, Hansen calls for a global tax on carbon dioxide emissions.

Michael Mann, a highly respected climate scientist, released a statement arguing that climate sensitivity would remain stable if the world decarbonized now. This is a reason for hope. He also states that Hansen’s claim about temperature rise would only be relevant if the world did not immediately reduce emissions. Mann makes no mention of a carbon tax.

Note that the statements of both scientists are conditional. Both depend on how quickly the world reduces its emissions. This is the crucial issue of COP28, whose emphasis is both on increasing the consumption of fossil fuels in the short term and on increasing investments in alternative energies. If at the end of COP28, the consumption of fossil fuels continues to increase, there is reason to be concerned about climate sensitivity and the crossing of the 1.5 degrees Celsius threshold in the coming years.

In their current work, Hansen and his co-authors suggest that a doubling of atmospheric carbon dioxide would increase atmospheric temperature by 4.8 degrees Celsius. Mann points out that most scientists assume the climate sensitivity is 3 degrees Celsius. Notably, in 1988, Hansen and his fellow researchers made a thirty-year forecast of the planet’s overall atmospheric temperature, assuming that a doubling of atmospheric carbon dioxide would increase atmospheric temperature by 4.2 degrees Celsius. This prediction turned out to be eerily accurate, which should give readers pause.

What integrated economic evaluation models say

In my new book, Behavioral economics and the politics of global warming, I provide an analysis of the key questions underlying the different points of view. Here are some key points.

The global community has only recently begun to move away from the emissions status quo. Because the community lacks the collective will to impose an effective global carbon tax, it is highly likely that annual global carbon dioxide emissions will peak before 2030. A key question is whether it There will be a serious movement at COP28 to change this state of affairs.

The integrated assessment model developed by Nobel laureate William Nordhaus projects that for 2025, the global ratio of climate damage from emissions to gross domestic product would be 0.3%. The American national climate Assessment which recently estimated the value of this ratio to be at least 0.6 percent. This is a cause for concern.

Research on this question provides important information. For example, a recent academic study reveals that flood risk reduced overall U.S. output by 0.52% in 2018, of which 80% came from expectation effects and 20% from direct damage. In addition, the most recent annual global report of the Lancet Countdown on Health and Climate Change reports that weak climate policies generate rapidly increasing health risks.

Integrated assessment models have important implications for the types of energy projects investors are ready to finance. These models clearly show that much depends on the return on capital demanded by investors.

Nordhaus’s model implies that without a surprise surge in technologies for alternative energy and the removal of carbon dioxide from the atmosphere, projected emissions will drive global temperatures to exceed 1.5 degrees Celsius no later than 2035. Indeed, the assumptions of the most recent version of its model imply that it is impossible to prevent a temperature increase above 1.5 degrees Celsius. With this in mind, think carefully about the context of Al Jaber’s “no science” remark.

What The Wall Street Journal Said

Over the past two years, stock prices of fossil fuel companies have increased by approximately triple. The performance of the SPDR Energy Select Sector Fund is an indication of this.
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. In contrast, stock prices of alternative energy companies have fallen dramatically. The price of the iShares Global Clean Energy ETF is one indication of this.
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, which decreased by about a third. A big factor in this decline is rising interest rates, as higher rates penalize companies with future cash flows coming further out in time.

Greg Ip, chief economic commentator at Wall Street Journal, analyzes stock market data in more detail. Her discussion addresses slowing demand for electric vehicles, government investment in alternative energy and reluctance to impose a carbon tax, the issue raised by James Hansen.

The social cost of carbon

What is Wall Street Journal This reinforces the importance of James Hansen’s assertion about the global failure of carbon pricing at its social cost. The failure is significant because pricing carbon at its social cost would encourage the global community to shift more quickly and strongly from fossil fuels to alternative energy sources.

Although the social cost of carbon is less intuitive than a market price, the concept is simple to describe. Think about the current emissions scenario and focus on a time like 2030. Suppose the value of damage to global gross domestic product, after 2030, from emitting an additional ton of carbon in 2030 is $50 . Economists would then say that under this scenario, the social cost of carbon in 2030 is $50.

The global temperature will likely exceed 1.5 degrees Celsius before 2035, if the world continues on the current scenario. If we want to prevent the temperature from rising above 1.5 degrees Celsius in the current century, not just before 2035, then we need to place a much higher value on the damage caused in 2030. This might require, for example, the cost social carbon. be $350 in 2030. Notably, the Environment Protection Agency uses $190 such as the social cost of carbon.

Key to remember

In some ways, the “no science” controversy at COP28 is a distraction. Even more important is the inability to set a price close to its social cost. Indeed, pricing below the social cost leads to higher costs than what is necessary to achieve climate objectives; or worse, it makes those higher goals unattainable.