Some literature and its applications / The academic literature Johnston examines is far too vast to review in depth here. Instead, I focus on his views of three aspects of climate science: how changes in temperature and other relevant factors are measured, how changes in climate are forecasted, and how the economic effects of climate change are estimated.
Climate science relies on climate data. Johnston points out several weaknesses in how these data are measured.
Because the methods of calculating maximum temperatures on land have changed, as have the physical areas around many or most temperature reporting sites, the raw temperature data from land-based weather stations are subject to a great deal of adjustment before being used in analysis. Of course, the more adjustment that occurs, even with the best of intentions, the more error is likely to occur. Johnston claims that this process is subject to “upward” bias, inaccurately increasing temperature recordings. Determining the accuracy of Johnston’s claim is very difficult.
He also suggests that using the relatively cool 1950s as base years rather than the relatively hot 1930s serves to bias the estimates of temperature change upward. Essentially, the base year does matter. Today’s temperatures may be higher than they were in the 1950s, but perhaps not higher than in the 1930s. This, in turn, may change our viewpoints on the threat of climate change.
Theory predicts that climate change will have larger effects in the troposphere (the lowest part of the earth’s atmosphere) and the upper reaches of the ocean than it will on land. The temperature measurements from these places are in large part taken from satellites. These readings have both the advantage of not needing as much adjustment as land-based measurements and the disadvantage of a shorter period of data measurement. Johnston tells us these studies show far less warming than the studies based on temperatures from land-based monitors. The inference is that, in these circumstances, the land-based readings are less trustworthy.
Similarly, reported increases in hurricanes in general and intense hurricanes in particular can be attributed to the rise of satellite reporting, which today observes essentially all hurricanes, rather than pre-space-age ship-based reports. Similar challenges exist for measurements of sea level. Even with satellite-based data on sea level, the magnitude of needed corrections and potential errors in these corrections swamp the magnitude of the measured sea level change.
Global climate models (GCMs) are used to forecast how much the climate in the future will change because of carbon emissions. These models are highly complex and, again, subject to error. An unfortunate feature of GCMs is that, for almost everyone, the models are “black boxes” whose internal characteristics are not well understood. Of course, the quality of any model is unlikely to be better than the quality of the assumptions going into it. The limited amount reported on these models indicates that they are dependent in large part on assumptions about the feedback on climate from both clouds and aerosols. Unfortunately, as Johnston ably explains, the values of these variables are essentially unknown. These models also generally omit the warming effects of black carbon (what the EPA calls “soot”). A further problem with GCM models is that they do not appear to forecast the past (“backcast”) very accurately, at least without what researchers call “tuning.”
The social cost of carbon (SCC) is an important regulatory instrument in cost–benefit analysis used by the federal government. Any cost–benefit analysis of a climate-based regulation will use this number. But there are three problems with the SCC. First, as Johnston ably outlines, the damage function that is derived from the GCM model is not estimated econometrically. Rather, it is derived in an opaque and perhaps arbitrary fashion as a projection of results in the academic literature. Again, such a process is subject to subjective decisions.
Second, as Johnston discusses (albeit too briefly), because most of the effects of climate change are far in the future, small changes in the discount (interest) rate applied make big difference in the SCC. For example, if the discount rate used is 1%, the value of a dollar used 50 years from now is about 61¢ today. If the discount rate is 3%, the value of that dollar is 22¢ today. Thus, the lower the interest rate used, the more important it is to take action today, rather than to wait.
Unfortunately, neither Johnston nor the field of economics offers substantial guidance on what interest rate to use. Let me present a little intuition: do you think people in the 2020s should reduce their consumption so that people in the 2070s will be wealthier? (Or perhaps the questions should be, do you think people in the 1970s should have reduced their consumption so that people in the 2020s would be wealthier?) If you think the answer is yes, you probably would support a relatively low interest rate for climate change analysis (because you are more likely to think that society should save for the future), but if you think the answer is no, then you probably would support a relatively high interest rate and less action on the climate today. Put another way, the question may come down to whether you think people in the 2070s will be substantially richer than people today. If they will be richer, there is less point in reducing consumption and carbon emissions today.
Third, Johnston unfortunately does not address the issue of “standing” in cost–benefit analysis. This is a question of who “counts” in the calculus. Generally, when governments engage in cost–benefit analysis, who counts is that government’s own citizens, but no one else. Indeed, federal law expressly prohibits non-Americans from having standing for the purposes of climate change. Despite this, and in contrast to the Trump administration, the Biden administration’s SCC takes into account the effects of climate change on people around the globe. This has the effect of essentially raising the SCC from $7 to $51 per ton.
From an economic point of view, global standing for U.S. government cost–benefit analysis may only make sense if U.S. carbon reduction induces all (or most) other countries to reduce their own emissions by a similar amount. There seems, however, to be no real reason to believe that will occur. Unfortunately, Johnston does not address this problem.
A strength of the book is its review of the costs of decarbonizing the electricity grid and the rest of the economy. Despite what some advocates have claimed, decarbonization will be no easy task. (See “The Limits to Green Energy,” p. 40.) Modern economies depend on a reliable supply of electricity, so increasingly relying on intermittent wind and solar sources of electricity will require two things:
- a much broader set of transmission lines, so that if intermittent power is not available in one region, it can be sent from another; and
- electricity demand response, so that consumers of electricity will pay higher prices for electricity when it is scarce, reducing their demand during those times compared to the average prices that are typically paid today.
There is tremendous opposition in almost all populated regions to building new transmission lines in the United States. (See “Promoting Cost-Effective Grid Modernization,” p. 34.) Further, after over two decades of attempts to encourage demand response, it is very clear that, despite the best efforts of economists, many or most consumers do not want it. (See “Confessions of an Energy Economist,” p. 30.) People prefer to have constant prices for electricity, perhaps in part because they do not desire additional worries in their lives.
The book includes an examination of the environmental costs of renewable technologies. Some of these I cannot take too seriously. Wind towers may kill hundreds of thousands of birds per year but, as Johnston points out, cats kill billions. We are not going to run out of birds, though some individual species may be threatened. Wind towers do take up a great deal of land. Johnston estimates they might eventually take up land equal to the size of Nebraska. I am, however, not sure this is so important, perhaps because I spend a good deal of my time driving empty roads in central Pennsylvania. There is a lot of land in this country. Other environmental problems are more serious. As Johnston notes, one challenge that we have not been forced to deal with yet is disposing of various parts of wind turbines and solar generators once their usefulness has expired.
Another issue that Johnston does not address is that wind and solar generators require substantial amounts of rare earth minerals, which currently come in large part from Inner Mongolia in China. Extracting and processing these materials can be quite harmful to the environment. If you think renewable energy is “clean,” do an internet search for some pictures of mines in that area. A further problem is the limited supply of these materials. Rare earths are not as rare as the name suggests, but they are hard to find in marketable quantities. If we truly decarbonize, the cost of extracting these materials and the resulting price are likely to soar as demand for them rises. Finally, relying on China for these materials creates national security issues.
In his final substantive chapters, Johnston points out a key flaw in the economic models of climate change. Climate change will change relative prices. For example, it will make some areas less viable for agriculture. His well-argued thesis is that human ingenuity, aided by appropriate institutions in the industrial era, has shown itself to be responsive to the needs of society. Johnston illustrates this with a short but compelling chapter discussing economic advancement in the Sahel region of Africa. In this sense, projections of the effects of climate change on the economy without assuming adaptation can be seen as worst-case scenarios. Entrepreneurial humans motivated by profit, at least in countries with strong property rights, will do better. Of course, the effects of future adaption are hard to estimate for many of the same reasons that future harms from climate change are difficult to forecast.
Science and advocacy / Johnston takes on the idea of climate science as an objective, unbiased field of research. There is an ideal of how science is “supposed” to progress: Dedicated scientists do replicable work in laboratories and offices, attempting to find “truth” in an unbiased fashion. Their work is reviewed by dispassionate peers and accepted for publication if it is worthy. Their motivation is to find truth and nothing else.
Of course, that is not how the world works. Climate science is not replicable, and scientists are human beings. In particular, climate scientists need research funding to conduct their research. Much of the funding for climate science in the United States comes from three government agencies: the Environmental Protection Agency, NASA, and the National Oceanic and Atmospheric Administration. Public choice analysis suggests that all three have strong bureaucratic reasons to prefer research that shows climate change is a looming threat. Scientists would be less than human if this did not influence them.
As Johnston points out, many climate scientists are also climate advocates, arguing for swift action to reduce climate change. It is hard to be both a truth seeker and an advocate. Scientists are supposed to be unbiased; advocates are not. Given that there are so many obscure assumptions in climate change analysis, it is natural to suspect that scientist-advocates would be more likely to make assumptions implying increased harm from changes in the environment.
Unfortunately, climate scientists take actions in response to criticism that certainly make it look like they have something to hide. An example of this is their dismissing criticism by proclaiming that “the science is settled.” Of course, science is never settled. Perhaps what is meant by this is that there is a consensus that human-caused climate change is occurring. But this leaves plenty of room for investigation. In particular, if the climate is changing, then we need further analysis on how much it is changing, and what (if anything) we should do about it today.
Further, there is an unfortunate tendency in climate science to respond to critiques by engaging in ad hominem attacks, calling skeptics “deniers” and ostracizing them. Such attacks both increase the cost of defying the existing consensus and lead outsiders to believe that climate scientists fear open debate. My impression is that at least some climate researchers understand the implications of this behavior and regret it. Of course, climate change skeptics have been known to make their own ad hominem attacks on climate scientists.
The administrative state / Attempts to pass explicit climate change legislation through the U.S. Congress over the last 30 years have been largely unsuccessful. Given this, administrative agencies such as the EPA have attempted to expand environmental regulations under existing laws, and therefore their bureaucratic missions, to cover the emissions of carbon, often under less than obvious legal justifications.
Johnston criticizes the federal judiciary for allowing this to occur and failing to rein in the encroachment of the regulatory state into areas not (at least directly) authorized by underlying legislation. Johnston focuses on the legal infirmities in the EPA’s Clean Power Plan, which in his view attempted to expand the agency’s purview well beyond what Congress had intended. Perhaps some of what he was referring to was heard by the Supreme Court before its recent decision in West Virginia v. EPA, which ruled that the EPA does not have authority to implement the Obama-era Clean Power Plan.
Much of Johnston’s critique of federal courts (in particular the landmark 2007 decision in Massachusetts vs. EPA) is centered around those courts’ acceptance of the Intergovernmental Panel on Climate Change (IPCC) as a neutral, objective authority on the science of climate change. The EPA and lower courts also commonly cite the IPCC as an unbiased authority. Johnston examines the IPCC and argues that it is, at its core, a political body. As such, like all other advocates, its positions must be considered warily.
The IPCC is essentially an arm of the United Nations, created in 1988 to summarize research on climate change. Scientists are a large part of the IPCC process. But in the end, it is government representatives, not scientists, who make the decisions on the positions the IPCC takes.
Johnston’s crucial point here is that the process by which the IPCC produces reports does not resemble how articles are produced for academic journals. The chapters in IPCC reports do have academics as lead authors, and these academics write the initial drafts. The reports, however, are then subject to a review process involving various government officials and entities. They do not undergo an independent peer review process. In the end, decisions about what goes into the IPCC’s final reports are made by government officials, who can and do reject the views of the experts. This is not a neutral, scientifically based approach.
Writing / The book has its weaknesses. It is long and requires substantial effort from the reader. Johnston is comprehensive in his review of the literature, and this is the strength of the book. Judicious editing, however, could have made for a shorter but not less detailed volume, while prodding the author to cover important omitted topics and excise unimportant ones. For example, Chapter 5 highlights at some length the Obama administration’s “war” on the coal industry. Whatever one thinks of that policy, it is unclear why it is included in this book. On the other hand, as mentioned above, the issues of cost–benefit standing and the supply of rare earth elements should have received more scrutiny. A brief discussion of non–North American perspectives on climate change would also have been helpful.
The ordering of the book creates difficulties. Critiques of climate change science and economics should come first, rather than an examination of how the administrative state deals with climate change. For example, the first substantive chapter of the book reviews the legal meaning of “endangerment” and how a slim 5–4 Supreme Court majority in Massachusetts v. EPA used that definition to support efforts to reduce carbon emissions under the Clean Air Act. The first time I read the chapter, I was confused because so many of the concepts described had not been previously introduced. The second time I read it, after reading the entire book, the chapter made much more sense. This is a difficult burden to place on the reader.
Johnston uses as a theme for his book the idea that climate policy is driven by the precautionary principle, rather than economically based cost–benefit analysis. This theme is not carried throughout the book. For example, much of the discussion in Johnston’s work, and in the broader community, focuses on measuring and using the appropriate SCC. Using the SCC is an explicit method of cost–benefit analysis. Johnston contends that the SCC is determined through a lens of the precautionary principle, but he does not really support that argument.
Conclusion / I do not have any distinct views on the nature and threat of climate change. It is simply not my expertise; I am an energy and natural resources economist. But the sheer complexity of climate models, the potential for bias in these models, and the public choice implications of the incentives facing both the government agencies that deal with climate change and the researchers they fund give me pause.
A further concern is the seeming unwillingness of climate change scholars to address many of the critiques of their work. If there was ever a field that needed vigorous debate, it is climate science. The stakes are large and the models opaque. Too often, however, the field of climate science seems to turn into the field of climate advocacy
I do feel confident in saying that decarbonizing the economy would be a painful and expensive task. Modern society depends on reliable and inexpensive energy. Further, it is unclear if it really would be worth doing for the United States if other major carbon emitters such as India and China do not join in carbon reduction.
In the end, the many questions Johnston raises come down to a simple query: do you trust the experts? As readers of Regulation know, there are plenty of reasons to be skeptical.
