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March 31, 2007

Climate Change and Poor Countries

The IPCC will tell us soon that it will be the poor countries that suffer most from climate change. Indeed it will but the information so far doesn't tell us whether it is because of their location or their poverty. A country like the UK, where only 2% of the economy is agriculture, is obviously better able to handle a change in rainfall than one like, say, Niger, where 70% (or whatever the actual number is) is peasant agriculture.

Given that the IPCC also tells us that a certain amount of temperature (and thus these consequences) is inevitable, whatever we do about emissions, this leaves us with the problem of what we do about it.

Catherine Pearce, of Friends of the Earth, said: "The world is going to be a very unpleasant place to be, regardless of whether it will be possible to sit outside in England in November.

''Our contribution to this problem, from our past emissions in the industrial countries, is the greatest.

''The world's poorest countries, which have done least to pollute the atmosphere, will be the worst hit.

Possible to argue a bit about this, land use changes are a greater contributor than the global transport industry, as an example.

''We are going to have to dig deep to pay for the adaptation measures they will have to take."

And very definitely possible to argue with this. If we take, as I think is obviously true, the line that the richer a place is the more robust it is, the better it will be able to adapt, then of course it is our duty to ensure (if we have any duty at all, of course) that these various places are as rich as possible so that they can adapt as well as is possible.

We thus need to go gung ho for growth in the currently poor countries. How should we do this? We could all have the lovely arguments about whether they need import protection for their infant industries, more planning, more aid, all those wonderful things that are advocated by varied NGOs.

Or, since we are taking the word of the IPCC on one part of this problem, why don't we also take their word on another?  Indeed, why don't we take note of the very models upon which the entire IPCC process is based, the SRES?

Which family of scenarios (of the four) contains the greatest economic growth? That would be the A1 actually.  In that, global incomes converge (that is, global inequality shrinks) and at a high level too. Average incomes in 2100 are at about the 2000 level for the USA. We're pretty confident that a country as rich as the 2000 USA would indeed be able to adapt to the predicted temperature changes: it's those poor countries that will not be able to. But if the poor countries are at that level of wealth, then they too will be able to adapt.

Remember, we're working purely on the basis of the IPCC numbers here, there's no getting away from the necessity to adapt.  It doesn't matter what we do to emissions, we'll still need to adapt.

So, what is the secret of the A1 family? Broadly speaking, it's that we accelerate globalization. We continue with the global division of labour, we continue to increase trade, we continue, even more quickly, the creation of a global, rather than a series of regional or locally self-sufficient, economy.

Further, far from this costing us anything, we benefit from it ourselves as well. No requirement for us to dig deep, we can just carry on with the movement of the past couple of centuries, ever since the invention of liberal capitalism, and all of us get stinking rich.

With that basic plan in place, we can then on top, as with a cherry on the whipped cream, also add emission controls as well. But if we are indeed concerned, as perhaps we ought to be, with the effects of climate change upon the poor,  the best solution would seem to be that by the time the climate change comes, there are no poor?

March 31, 2007 in Climate Change | Permalink

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Comments

"Or, since we are taking the word of the IPCC on one part of this problem, why don't we also take their word on another?"

Because the IPCC is primarily about climate change rather than the economics of development. It's interesting that you're far happier agreeing with the part of their analysis they have the least specialist knowledge of.

Anyway, you've tried about 50 different versions of this same post in the past, none of them any more impressive. We've had the arguments about what causes growth in the past, and the IPCC *projections* don't change that. I know and you know that there is very good evidence that aid boosts growth in poor countries. You just choose to ignore that evidence, for some reason.

Tim adds: Jim, that's a really strange, strange, argument. The entirety of the IPCC process is built upon the economic models. They are the process by which we get the emissions figures to plug into the climate change models. If the economics at the beginning, as you seem to be implying, is shaky, then the whole thing is too.

If we are to take the IPCC seriously then we have to take their economic models so too. Other wise it's a bit like saying, yes, I agree that using computers is great but I reject the basic idea of binary numbers. Can't you see that one is built entirely upon the output of the other?

Posted by: Jim | Mar 31, 2007 10:13:21 AM

Tim, there's a difference between accepting their arguments on the environmental impact of different patterns of growth and accepting their arguments on what causes different patterns of growth. I don't particularly see why *that* should be so hard to understand.


Tim adds: No, there isn't a difference there. This is the "scientific consensus", remember. The accumulated wisdom of mankind, being used to help us decide how to allocate trillions upon trillions of dollars. We don't get to pick and choose which piece we believe, do we?

Posted by: Jim | Mar 31, 2007 10:55:19 AM

I find your argument a bit strange, coming as it does from someone who has previously complained about the SRES being 'wrong' and suggested that we "pay for a few economists to play with spreadsheets first". Could you maybe make up your mind, or is that an unfair inhibition on the work of a distinguished public intellectual such as yourself?

Tim adds: There's nothing inconsistent with thinking that the models themselves aren't as good as they could be: and also demanding that people who rely upon the models for their dystopian view of the future understand what the same models are telling them about the solutions. Is it really so appalling to insist that people should follow their own logic?

Posted by: Jim | Mar 31, 2007 11:38:19 AM

Jim are you saying you are sceptic/denier of the IPCC's climate change projections?

Posted by: Kit | Mar 31, 2007 11:41:05 AM

Kit: No, try reading again what I said.

Tim, I've just read your post properly and noticed how you signed off:

"the best solution would seem to be that by the time the climate change comes, there are no poor?"

Are you labouring under some sort of misapprehension that climate change is not already underway? If so, what exactly do you think has been happening to average temperatures for the past 20 years?

Tim adds: Indeed, that could have been better phrased. By the time we have to suffer the substantial ill effects of climate change, the best solution....

Posted by: Jim | Mar 31, 2007 12:03:30 PM

"This is the "scientific consensus", remember. The accumulated wisdom of mankind, being used to help us decide how to allocate trillions upon trillions of dollars. We don't get to pick and choose which piece we believe, do we?"

One can accept the IPCC's analysis of the likely effects of certain emissions scenarios without accepting that the IPCC has predicted the economic future if only we accepted the "secret" of A1 as presented by Tim Worstall: "accelerate[d] globalization".

With A1 they assume average annual growth of 3% until 2100 and assert that "energy and mineral resources are abundant in this scenario family because of rapid technical progress". Does that mean these things will happen? Or that to accept the IPCC's broader conclusions we must assume they would? No. It means they adopted a set of numbers for the purposes of modelling a possible path for the climate. Nowhere do they state that, if adopted, the Worstall plan for economic growth would entail these wonders.

Furthermore, as Jim points out, under the A1 scenario global average income will not rise to current Western levels until numerous predicted effects of climate change have already affected poorer countries without the resources to deal with them. It seems quite bizarre to assume that "substantial ill effects of climate change" will not impinge until all this miraculous growth has occurred.

Tim adds: I really don't get you guys. There's nothing odd or bizarre about taking people at their word is there? Look at the other families. They all have worse outcomes in terms of wealth. So, if we want to increase wealth so as to increase the resilience of societies, we should move to the policy mix that provides the greatest amount of said wealth.

Really, what is so contentious about that?

Posted by: StuartA | Mar 31, 2007 12:22:39 PM

"We continue with the global division of labour, we continue to increase trade, we continue, even more quickly, the creation of a global, rather than a series of regional or locally self-sufficient, economy."

This is precisely what WE SHOULD NOT DO to reach A1 standards.

To achieve that goal, we do the following -

1. We tell them it's OK to dig holes in the ground to get at whatever resources they have stashed beneath their feet, and that it's OK to burn as much of the stuff as they like as quickly as they like to get their growth going. And sod the climate.
2. We adopt internationally recognised standards for weights and measures and then say 'we won't trade with you until you can provide proof that you're compliant'. Recognised and enforceable laws on weights and measures are the root of all commerce, even back to the Old Testament - if you've got those you can do anything, and they render redundant everything else upon which the World Bank/IMF walli-wallahs focus on, like accounting standards (accounting standards? In Niger? For God's sake!). Get the weights and measures right and everything else flows naturally.
3. We encourage microfinance - in Africa, probably best done at the tribal level to ensure the maximisation of social collateral.
4. We then practice free trade as envisioned by Ricardo and Bastiat, goods not people, without regard for any guff like 'the global division of labour' - a thing which not only does not but cannot exist except in the fevered minds of economists more accustomed to dealing with rational calculus than irrational humans.

And to do that, we would have to get the hell out of the EU, the WTO and the IPCC. Not a bad outcome all round I'd say.

Once increases in living standards become palpable, people lose their incentive to fight with each other - everyone's too busy making money. The guarantors of stability, laws, courts, all that stuff, flows form that - but the aid mandarins insist on putting the political reform cart before the economic development horse. For as long as they remain blind to their inhumane folly, they really have nothing to say.

And if we could expunge the use of the word 'if' from all economic discussion, that would be even better.

Posted by: Martin | Mar 31, 2007 1:03:39 PM

Shouldn't we also do what we can to ensure that there is substantial investment (both private and public) in science and technology for the A1 family?

Tim adds: Sure, move ahead on all fronts. But we really should get the no cost things right first, don't you think? Like tearing down the trade barriers?

Posted by: Andy Cooke | Mar 31, 2007 3:39:00 PM

An idea on point 3 - credit cards. This may seem a bit weird but the major engine of growth in Africa recently has been the mobile phone which allows people to cut deals without moving to the city.

The technology of mobiles also allows credit card verification & transfers between bank accounts. I wouldn't know how to run a bank but, if the international community were to encourage it, we could see international banking institutions running current accounts & verifying card balances in African villages by phone. The computer capacity in banking is already enormous. We should also see such accounts held in dollars, or pounds or Swiss francs which would make it possible for these villagers to save without being affected by Zinbabwe's, & others) 20,000% inflation.

Wouldn't even use any of the Earths resources except a few spare electrons though we might find some "environmentalists" wanting to protect against increased cancer.

Posted by: Neil Craig | Mar 31, 2007 4:52:53 PM

There's nothing odd or bizarre about taking people at their word is there?

You are not "taking [the IPCC] at their word". They do not say that following your economic prescriptions will lead to this miraculous wealth. Nowhere does the report state that "accelerate[d] globalization" will lead to the economic growth. All it suggests is that, under one possible scenario, economic growth might be concomitant with certain shifts in global economic activity.

You, not the IPCC, are assuming a necessary causal link between the two. That is contentious, and hand waving about "the secret of the A1 family" is not enough to establish it. They don't &mdash unsurpisingly for a report on climate change — claim to know via mystical economic determinism "the policy mix that provides the greatest amount of... wealth". That is a claim you have made, but are seeking to pin on them.

Tim adds:

"The A1 storyline is a case of rapid and successful economic development, in which regional average income per capita converge - current distinctions between "poor" and "rich" countries eventually dissolve. The primary dynamics are:

* Strong commitment to market-based solutions.
* High savings and commitment to education at the household level.
* High rates of investment and innovation in education, technology, and institutions at the national and international levels.
* International mobility of people, ideas, and technology."

"They emphasize market-oriented solutions, high consumption of both tangible and intangible commodities, advanced technology, and intensive mobility and communication. In some examples of this type of scenario, high economic growth leads to shifts of economic power from traditional core countries to the current economic "periphery," as in the "Global Shift" scenario by CPB (1992) and de Jong and Zalm (1991). The Shell scenario "New Frontiers" (Shell, 1993) is also representative of this family. The IPCC Scenarios IS92a and IS92e are well-known examples of futures with high levels of economic growth (Leggett et al., 1992). IIASA and World Energy Council (WEC) jointly developed three High Growth Scenarios that share assumptions on rapid technological progress, liberalized trade markets, and rising income levels (Nakic´enovic´ et al., 1998)."

Sure looks like they're talking about globalization to me. "liberalized trade markets" is a clue.

Posted by: StuartA | Mar 31, 2007 5:03:29 PM

All I can do is repeat what I said above:

"You, not the IPCC, are assuming a necessary causal link between the two."

Where is this causal link? Where does the report say that adopting your economic nostrums would lead to sustained 3% economic growth?

Tim adds: Well, the people who wrote the IPCC report seem to think there is a causal link. It's right there, in what they write. Try reading it.

More globalisation leads to poor people being richer. It is what they say, after all.

Posted by: http://indecent-left.blogspot.com | Mar 31, 2007 6:42:09 PM

I have no interest in whether the IPCC people "seem", in your opinion, "to think there is a causal link". I want to see where they state there is a causual link, or where they suppose a causal link in their analysis. If it is "right there in what they wrote" then you will be able to point me to it. So far, in spite of its pellucid obviousness, you have failed to do so.

"More globalisation leads to poor people being richer. It is what they say, after all."

No they don't, if you mean the IPCC.

Tim adds: Now you're confusing me. They have a model with regional and local self-sufficiency (A2), ie less globalization. This leads to per capita outcome of x in 2100.
They have A1, with more globalization, which leads to outcome 4x.
In what way is this not them saying that globalization makes poor people richer?

Posted by: StuartA | Apr 1, 2007 1:50:16 AM

You will be aware that correlation does not necessarily imply causation.

They have incorporated into the spectrum analysed an economic scenario that "share[s] assumptions on rapid technological progress, liberalized trade markets, and rising income levels". But nowhere do they suggest that "liberalized trade markets" lead to "rising income levels", and nor is it necessary to assume this for their analysis.

They do not endorse a "policy mix that provides the greatest amount of said wealth". They simply use as inputs to their climate model several sets of economic trends, among which is your fantasy globalization scenario. That doesn't mean they are closet Worstallites, however much you might wish otherwise.

Tim adds: No, it's the Stern Review that says our duty is to maximise the wealth of our descendants. That's how he justifies spending now to increase incomes then. All I'm doing is saying that if that is the justification, if that is valid, then we must be consistent and truly maximise said wealth. Whi9ch brings us back to the IPCC.

Posted by: StuartA | Apr 1, 2007 8:48:14 AM

Now you're invoking the Stern review? What does that have to do with taking the IPCC at their word?

Tim adds: Here's the logic. Again. We have a duty to our descendents, to leave them with the best situation possible. As the IPCC goes on to say, that can be reached by more globalisation.

Posted by: StuartA | Apr 1, 2007 10:03:40 AM

"Indeed, that could have been better phrased. By the time we have to suffer the substantial ill effects of climate change, the best solution...."

Tim, the point is that people (perhaps those you don't include in your definition of 'we') are already suffering substantial ill effects, for example through severely exacerbated drought. For you to pretend that this is a problem which will only arise when everyone in the world has been made rich by the wonderful magic of globalisation (which, by the way, has conspicuously failed to have that effect so far) is simply idiotic and a denial of reality. Please look outside your ivory tower for a change.

Tim adds: Failed to have that effect so far? Are you blind or what? Hundreds of millions of Chinese and Indians are indeed rising up out of poverty.

Posted by: Jim | Apr 1, 2007 10:18:49 AM

Here's the logic. Again. We have a duty to our descendents, to leave them with the best situation possible. As the IPCC goes on to say, that can be reached by more globalisation.

That isn't logic; it's bald assertion. And its truth doesn't increase with repetition.

1) Your post was about taking the IPCC at its word. Taking the IPCC at its word does not mean swallowing pronouncements in the Stern Review. It has no logical relation to the Stern Review.

2) You persist in claiming the IPCC say the "best situation possible... can be reached by more globalisation". You say it's "right there, in what they write". Yet you can't tell me where. Until you do, I'm not going to accept this claim.

Tim adds: The Stern Review is based upon the IPCC reports. That's the connection. Stern takes the A2 family and then goes on from there. His logic is that we should spend money now to make the world better for our descendants. That's the whole basis of his Report in fact.
So, then let's go and look at the IPCC report. How, according to the economic models that underpin the entire science of climate change, can we influence the world so as to leave our descendants in the best possible situation, as Stern asserts we should?
At this point all you need to do is read the overview descriptions of the four families of scenarios studied. Which of the four would leave our descendants richest, as Stern asserts we ought to? A1. What is the distinguishing feature of A1? Globalisation.

It really isn't that tough you know.

Posted by: StuartA | Apr 1, 2007 10:32:38 AM

"Are you blind or what? Hundreds of millions of Chinese and Indians are indeed rising up out of poverty."

And hundreds of millions of Africans and Latin Americans are not. But you are claiming that in the future *everybody* will be magically lifted out of poverty even though you don't suggest anything apart from more of the same.

And please, just so I'm clear, tell me: do you honestly believe that nobody has suffered substantial ill effects from climate change so far?

Tim adds: There's a clue there you know. Those partaking in globalisation are leaving poverty. Those who are not, are not.

"substantial" so far? No, I don't think so, not yet.

Posted by: Jim | Apr 1, 2007 11:07:25 AM

The Stern Review is based upon the IPCC reports. That's the connection.

So what if the Stern Review was "based on" the SRES? The relation does not establish your case because it is precisely the wrong way round. All it might show is that one would have to accept the IPCC review if one accepted the Stern Review &mdash not the converse.

Which of the four [scenario families] would leave our descendants richest, as Stern asserts we ought to? A1. What is the distinguishing feature of A1? Globalisation.

They can adopt, as I have pointed out repeatedly, a set of numbers describing an economic scenario without endorsing your causal model or policy prescriptions. Since they don't mention your causal model — or at least you are unable to tell me where they do — I see no reason to assume their report contains such an endorsement.

Tim adds: "International mobility of people, ideas, and technology" What the hell do you think globalisation is if it isn't that?

Posted by: StuartA | Apr 1, 2007 11:42:41 AM

International mobility of people, ideas, and technology" What the hell do you think globalisation is if it isn't that?

You are being willfully obtuse. They can talk about globalization, they can even talk about globalization associated with 3% growth until 2100; but that does not mean that they believe globalization will necessarily lead to such growth. Given that it was a climate emissions report, not a development economics report, it would be bizarre if they expressed such a belief, and of course they don't. Hence you had to make it up.

I note that you have dropped your logically-challenged emphasis on the Stern Review. I wonder why?

Tim adds: "development economics report". So you think that the SRES is besed simply on some set of pretty numbers? Wild guesses? Of course it isn't, it's based on the best possible predictions about the future. Including the interaction of such things as a liberal trading order, the growth in wealth and the concomittant reduction in population.
What you seem to be missing is that in order to write a clime emissions report you have to write an economics development one. Otherwise, how are you going to estimate wealth, population and technology, the three things that determine emissions?

Posted by: StuartA | Apr 1, 2007 12:05:00 PM

"Those partaking in globalisation are leaving poverty. Those who are not, are not."

Tim, that's ridiculous. Latin American and Sub-Saharan countries have opened up their economies just as much as Asian countries, in some cases more, and simply haven't seen the same results, which should tell anyone who cares to look that it's not liberalisation that produces growth. The pattern in those Asian countries has pretty much always been growth first, then liberalisation, not the other way around. This is well known - why do you pretend otherwise except out of some misplaced emotional attachment to doctrine?

Tim adds: Jim, you're the guy who bangs on about the fact that the sub-saharan countries haven't, can't in fact, open up as much for geographic and transport link reasons. Rather proves my point, eh?

Posted by: Jim | Apr 1, 2007 2:58:40 PM

Let me clarify then, for the hard of understanding. SRES was not a report containing policy prescriptions for development:

No judgment is offered in this report as to the preference for any of the scenarios and they are not assigned probabilities of occurrence, neither must they be interpreted as policy recommendations.

You apparently feel free to ignore this in your bid to take the report's authors "at their word".

The scenarios are also not offered as prognostications:

Scenarios are alternative images of how the future might unfold and are an appropriate tool with which to analyze how driving forces may influence future emission outcomes and to assess the associated uncertainties. They assist in climate change analysis, including climate modeling and the assessment of impacts, adaptation, and mitigation. The possibility that any single emissions path will occur as described in scenarios is highly uncertain.

If you are taking the SRES at their word, why do you feel free to discard these provisos? Why do you think the A1 scenario will unfold exactly as described, even though the authors describe this as "highly uncertain"?

Above all, why are you convinced, on the basis of a report that says nothing of the sort, that your favourite globalization policies will lead to a 3% growth rate?

In section 4.1 we learn:

Each storyline was characterized initially by two quantitative "targets," namely global population (15, 10, and 7 billion by 2100 in scenarios A2, B2, and both A1 and B1, respectively) and global gross domestic product (GDP) by 2100 (in 1990 US dollars, US$550 trillion for A1, US$250 trillion for A2, US$350 trillion for B1, and US$250 trillion for B2). These quantitative targets guided the subsequent quantification of the SRES scenarios with different model approaches.

That is, the A1 scenario was constructed by working backwards from a final world GDP of $550 trillian in 2100, thus mandating a growth rate of 3%. So no, they didn't model the effect of the policies you suggest and come up with a 3% growth rate. Again, you have things exactly back to front.

Furthermore, the scenarios exclude 'outlying "surprise" or "disaster" scenarios in the literature'. Your go-for-broke strategy might well increase the likelihood of environmental disasters before poor countries had the means to deal with them. You have provided, as ever, no answer to this point.

And do please tell me what happened to the Stern Review. Earlier today it was apparently at the heart of your argument.

Or you could just come clean, and admit this entire debate was an elaborate April Fool's joke. Unfortunately you can't claim that excuse for your outlandish bid to blaim biofuels on George Monbiot.

Tim adds: Works exactly the same either way. We can look at the effect of policies. Or we can start with the goal in mind and then fit the policies to get us to it. They're still saying that a more integrated (ie. globalized) economy would lead to the greatest wealth.

The Stern Review is indeed part of this argument: because he has used as the basis of his report the moral duty to leave our descendants as well off as possible.
We should thus be advocating the policies that do this. That's the A1 world then, isn't it.

BTW, worth making a slightly different point here. None of this means that we might not ALSO decarbonize the economy as well.

Posted by: StuartA | Apr 1, 2007 5:01:36 PM

Works exactly the same either way.

No it doesn't. One assumes a causal link; the other doesn't. For your point to hold, the report would need to advocate or suppose a necessary causal link. It doesn't.

They're still saying that a more integrated (ie. globalized) economy would lead to the greatest wealth.

I have quoted them disavowing such a position. You cannot be taking them "at their word" if you ignore their words.

The Stern Review is indeed part of this argument: because he has used as the basis of his report the moral duty to leave our descendants as well off as possible.

The Stern Review is not part of the argument, because taking the IPCC "at their word", as you claimed to be doing in the original post, has nothing at all to do with the Stern Review. It may have something to do with some other argument, going on in your head, but I'm afraid that isn't relevant.

Either answer what I wrote or give up. It's a waste of time otherwise.

Tim adds: It's you who keeps asking where the Stern Review has gone which is why I mentioned it again. Sheesh.

Posted by: StuartA | Apr 1, 2007 5:57:03 PM

"Rather proves my point, eh?"

I was going to say the same thing. They've opened up just as much in policy terms, but now you're admitting that policy isn't enough - there needs to be some allowance for factors such as geography as well (I'll leave you to think through what other factors particular to Sub-Saharan Africa might make it more or less vulnerable to damage from climate change).

But you're still missing the main point, which is that the Asian economies that experienced high growth in the 20th century (and I include 1980s-1990s China in this) were typically highly interventionist and only significantly liberalised after the onset of sustained high growth, ie exactly the opposite of what you claim to be the magic formula.

Posted by: Jim | Apr 1, 2007 10:32:53 PM