Richard Tol is a Professor of Economics who works at the Economic and Social Research Institute. I was reading his extremely interesting guest posts at Roger Pielke Jr.'s weblog, both here and here. I emailed a question for Professor Tol and his answer led to this interview. He's plain spoken, which is refreshing. He is the Professor of the Economics of Climate Change at the Vrije Universiteit, Amsterdam, The Netherlands. He specialises in climate, energy and environmental economics. He holds a Doctorate in Economics and a Masters of Science in Econometrics from the Vrije Universiteit Amsterdam.
As with previous interviews, I will be following up with him in a few days. I would greatly appreciate it if you put any questions you would like Professor Tol to answer in the comments.
1. First, what drew you into the debate over the choices involved in climate change? How have your contributions been received in your professional community? Has it caused you any problems, engaging on this issue?
I wrote my PhD on the economics of climate change, and have been an active researcher in this area since.
2. In your opinion, why is economic evaluation of the choices posed by climate change so controversial--to the point that even the attempt to evaluate costs and benefits is vilified by many?
Economics is known as the dismal science. Economists point out that every upside has a downside. In the case of climate change, economists have shown that climate change is not the biggest environmental problem in the world, denying people the catastrophe that they crave. Economists have also shown that climate policy (in Europe) has been ineffective yet expensive, denying politicians their claim that they have saved the world.
3. Have you had a chance to review the evaluations done by others (besides Stern, obviously)? If so, what do you think of them generally, and are there any that you would say take a sound approach? (Specifically, if you could, could you evaluate Bjorn Lomborg and the Copenhagen Consensus?)
Sound commentators on climate policy include Bill Nordhaus, Tom Schelling, and Dieter Helm.
The idea behind the Copenhagen Consensus is sound. You can spend a dollar only once, so you should spend it such that you achieve the greatest good. Unfortunately, the Copenhagen Consensus does not have the resources to do a solid comparison of alternative investments.
4.Do you consider the Stern Report's choice of a very low discount rate as sound? What would have been the impact of choosing a more conventional discount rate?
Stern's stark predictions about the impact of climate change would vanish had he used a standard discount rate. The discount rate reflects, partly, how much you care about the future. You should make up your own mind about the discount rate that is right for you. People do, and economists and psychologists have measured people's discount rates. People use much higher discount rates than the one preferred by Nicholas Stern. Stern essentially tried to impose his views on others -- like a colonial master would tell the savages what to think.
5. What would be the impact of recalculating the work done on the Stern report using updated population estimates?
6. Do you believe there has been a conscious attempt by proponents of the AGW theory to bias reports on impacts? Would you be able to offer concrete examples?
The Fourth Assessment Report of Working Group 2 of the Intergovernmental Panel on Climate Change is certainly biased towards overstating the negative impacts of climate change. I do not know whether this was done consciously, or by group think, or by selection bias in the authorship. Probably all three, but it is hard to say which was more decisive.
7. How do you respond to critics who say economics has nothing to offer in the discussion on climate change?
Greenhouse gas emissions result from economic activity. You can only reduce emissions by changing human behaviour. If you want to be successful in emission abatement, you may consider asking the experts like economists. Emission reduction costs money. People will ask what for? Economists would help you justify spending such money.
8. Have you formed an opinion on the best course of action to deal with real or potential impacts of climate change? If so, could you share it with our readers?
There should be carbon tax that starts low but increases at a predictable rate.
The direct way to tackle impacts, however, is to adapt. People do not need government support for adaptation, but they do need information and the freedom to act. The best form of adaptation is alleviation of poverty.
9. How do you decide who to trust when reading or talking about climate change? Is it different than the evaluation you would make for other professional discussions, such as the law or politics or medicine? Who specifically do you trust on climate change?
I trust arguments, not people.
As was mentioned during the recent inquiry by the UK House of Commons, Steve Mosher and I have written a book about the leaked emails that have caused so much controversy. The title is Climategate: The CRUtape Letters. It is available on Create Space here, Amazon here, Kindle here and Lulu here. One Amazon reviewer wrote, "Mosher and Fuller do a good job putting the ClimateGate documents in context, and the book is a riveting read. I received my copy yesterday, and find the book to be faithful to the climate war events that I have followed over a period of years. It reports actual email communications of a small group of paleoclimatologists and their roles in perhaps the biggest scientific hoax since Piltdown Man."