1.5°C global warming target based on shaky science
The Trudeau government’s decision to ban gasoline-powered cars by 2035 in the drive to “net zero” emissions is part of a global policy agenda kickstarted by a 2018 “Special Report” issued by the United Nations’ Intergovernmental Panel on Climate Change (IPCC). The report, titled Global Warming of 1.5°C, was commissioned to study the potential benefits of limiting warming to 1.5 degrees Celsius rather than the 2.0°C target stated in the Paris Agreement.
It’s widely (but mistakenly) believed that the report recommended the 1.5°C target to help prevent large net economic and social losses. But the report stated up front it that did not include a cost-benefit analysis and was in no position to make such a claim. For the most part, the report simply compared the model-projected impacts of 2.0°C warming versus 1.5°C, and not surprisingly, concluded that the 2.0°C impacts would be larger. Again, it did not show the benefits of the policies required to achieve the 1.5°C target would be worth the costs.
So before we rush into extreme policy responses, such as banning the cars and trucks upon which life in Canada depends, we need a careful cost-benefit analyses. Fortunately, these have been done in the mainstream economics literature. And in a new study published the Fraser Institute, we show that these analyses do not support the 1.5°C target.
By coincidence, the same weekend the UN released its “Special Report,” Yale economist William Nordhaus won the Nobel Memorial Prize for his pioneering work on the economics of climate change. Major media treated the two events as complementary, assuming Nordhaus’ work supported the 1.5°C goal. On the contrary, his modeling work projected that the “optimal” amount of global warming by the year 2100 would be 3.5°C, a full two degrees higher than the popular target. In fact, Nordhaus’ model estimated that a 1.5°C ceiling would be so harmful to the economy that it would be better for humanity if governments did nothing at all about climate change rather than pursue such a draconian policy.
Or consider the “social cost of carbon,” which economists define as the present-value in dollar terms of future damages caused by the emission of an additional metric ton of carbon dioxide. The Biden administration’s Environmental Protection Agency (EPA) in February 2021 estimated the social cost of carbon for the year 2030 at US$62. Yet according to the UN report, the policies required to achieve the 1.5°C goal would only be justified for a social cost of carbon in 2030 ranging from $135 to $5,500 per ton, costs that are two to 89 times the EPA estimate.
|Estimates of Benefits and Costs From Various Climate Policies According to Nordhaus’ 2016R DICE Modeling Run (trillions of 2010 USD)|
|Climate Policy||Damage From Climate Change||Economic Damage From Abatement Cost||Climate Change Damage + Abatement Cost||Reduction in Total Harm Relative to Baseline|
|Baseline (no controls)||$134.2||$0.4||$134.6||$0|
|Globally Implemented "Optimal" Carbon Tax||$84.6||$20.1||$104.7||$29.9|
|Limit Warming to 2.5°C (sic)||$43.1||$134.6||$177.8||-($43.2)|
SOURCE: Adapted from table 2 (p. 349) in William Nordhaus, 2018, “Projections and Uncertainties about Climate Change in an Era of Minimal Climate Policies," American Economic Journal: Economic Policy 2018, 10, 3 (August): 333–360.
The “Special Report” also claimed that warming would have much larger economic impacts than projected in a separate IPCC report released in 2014. But it’s not that the IPCC experts changed their minds, it’s that the IPCC changed their experts. We show that, notwithstanding the similarity of the topic and the short interval between the two reports, the UN picked a very different team of authors for the “Special Report” released in 2018. For the relevant chapter from the 2014 report (Chapter 10) and the 2018 report (Chapter 3), there’s no overlap between the coordinating lead authors, lead authors, review editors or chapter scientists. And among the 69 contributing authors to the “Special Report” Chapter 3, only one had also contributed to the 2014 report’s chapter on climate change impacts.
Finally, we show that the “Special Report” chose to highlight two new studies, which asserted much larger economic impacts from warming. In doing so the authors overlooked other contemporary studies that had confirmed the earlier IPCC consensus. The two new studies have, in the years since the “Special Report” was released, been criticized on methodological grounds and other authors have not confirmed their findings.
Although advocacy of aggressive climate change policies is often draped with the mantle of science, mainstream economists who follow the scientific literature have shown that the target of limiting warming to 1.5°C will pose costs that far exceed the benefits, and that the emission reductions flowing from strict adherence to this target would be worse for the world than doing nothing at all.
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