Last week, after reading ‘Nine Lies About Global Warming’ in which Ray Evans draws a comparison between the issuing of taxi licenses and carbon trading, I posted a quote from Ray and some related information at this blog.
I was interested in exploring the comparison.
Blair Bartholomew made several interesting observations. Following are some edited extracts.
“The big issue of course is how many licenses to grant. From the point of safety regulations you could argue that an unlimited number of licenses would be acceptable. The issue of availability of service i.e. enables a certain number of cabs to be available at all times would demand some restriction in the number of licenses. Otherwise you would have plenty of cabs available at the more popular times of the day and the year and a dearth of cabs at others.
So in making the decision as to the number of licenses the regulators rely on data to support their decisions. If they get it wrong and have two few licenses then the original lucky taxi license holders make a windfall. If they issue too many licenses then taxi users will suffer from an unreliable service.
Similarly with respect to emission controls, in the absence of controls, the population, as a whole, would be worse off from the effects of AGW. Just as the cab regulators need good information to decide on the number of cab licenses, so do the emission regulators to decide on the level of emission controls.”
Then Blair made a second comment, asking more questions.
“Regulators have to decide whether the likely scenario, after the introduction of controls (and allowing for the costs of implementing the controls) is preferred to the likely scenario without the controls. In other words will there be an aggregate gain in society’s welfare. To do this they need information about the alternate states, the “with” and the “without”.
In the case of global carbon emission controls the information needs are infinitely greater and more complex (and the effects of “bad” research much greater).
While the questions and topics are different, regulators would enquire [information] along the following lines. For the carbon emission regulators:
1. Is the increase in world temperature over the last 60+ years largely the result of human-induced carbon emissions?
2. And without regulation will the situation worsen i.e. the world gets even hotter?
3. In the absence of controls will profitable technology provide the solution? By profitable I mean carbon emitters will voluntarily invest in the research as they will be better off from application of the research.
4. If it is agreed that indeed warming will increase, what will be its effects on human welfare?
5. How do we quantify these effects?
6. What will be the distribution of these effects? Will some regions/countries/people actually gain some benefits from warmer temperatures and by how much? What regions/countries/people will lose and by how much?
7. If we are satisfied with the projected outcomes in the absence of the controls, then we must model expected outcomes in the presence of different levels of controls …no mean feat.
8. How do we quantify the benefits from the implementation of these different levels controls?
9. What are the likely costs and their distribution from implementation of controls?
10. Finally how do we then determine the “right” level of emission control?
A lot of the rather heated discussion on this blog seems to relate to points 1,2 and 3.
However I have not seen much discussion or data relating to the subsequent points.
I am sure some economic thinktank would have done the massive modelling required to come up with the answers. That is why Phil I asked you earlier if you are familiar with studies estimating the economic returns, including distribution of benefits and costs, from the massive research in global warming and appliction of its findings viz levels of controls etcetera.”
I am unfamiliar with any “massive modelling’ effort by an economic think tank. The analysis I am most familiar with, and that I consider most comprehensive, was done by Bjorn Lomborg in Chapter 24 of ‘The Skeptical Environmentalist’ published in 2001. But perhaps there has been something done more recently?