The economics of climate change: discounting the future, ignoring the poor?

Economists looking at climate change face a difficult task, with uncertain climate models, chaotic climate systems and possible catastrophic threshold effects. Often, when looking at the impacts of climate change different mitigation/adaptation options and emission scenarios will be looked at, and the economist will recommend a certain range of policy measures or course of action (and sometimes inaction) as the most economically sound.

When you see this, there are two important economic principles that, when understood, can help change how much faith you put in the economist’s recommendation.

The first, and most important in my view, is the discount rate.

The discount rate is an important and sensible part of any sober economic analysis. Basically, it can be explained thus: would you rather have €10 now, or €20 euro in 10 years?

Most people will choose €10 euro now – a rational and sensible choice. To reflect this decision making in their models, economists discount future values – this can be a range of values – the higher the discount rate, the more the immediate (€10 now) is valued over the long term (€20 in 10 years).

This makes good sense and reflects how we make decisions.

When looking at the long term, discounting has one important effect: it discounts the future! This seems to be stating the obvious, but over the long term impacts of this can be severe. While any individual would prefer €10 now to €1000 in 100 years,(due mainly to the fact that they think they will be dead) and economics reflects this rational individual choice, if you are looking at it from a societal point of view perhaps discounting the future is not such a good choice. Why should the future be valued as less important than today?

At this point, some form of value judgement needs to be made. If you believe that those who will live in the future should be valued as much as those currently alive, pay very close attention to the discount rate in economics.

The second important thing to pay attention to in climate economics is the very nature of economic models. Normally, these are denominated in dollars or euros. Again, economists build models of the future (discounted, obviously) and look at different options based on emissions scenarios, mitigation and adaptation options. Often they will then model global GDP in the future and recommend policy actions on this basis.

This is a sensible way of doing things, however looking at global GDP can have one very important effect. While economists working on climate change and it’s impacts are careful not to value people’s lives according to the GDP they produce, any economic model looking at the impacts of climate change can have a tendency to favour those who are already rich and produce a significant proportion of global GDP.

Again a value judgement is necessary here. If you believe all people are equal, looking at  Global GDP can mean that those in rich wealthy states – generally global north, so less affected by climate change, initially at least, and with most money to adapt – who produce most GDP in dollars will be ‘valued’ much more than a poor African farmer on a subsistence wage free pokies online, whose contribution to global GDP is negligible.

Given the current huge levels of inequality in the global system, any model that primarily looks at GDP means that economic model will favour those are already wealthy, and are likely to remain so. Making policy decisions on this basis will tend to perpetuate this inequality, and valuing people solely by the dollars they contribute to global GDP in a discounted future is not a value system I would want to base my decision making on – at least not without first understanding the underlying principles being used in these models.

To counteract the effect of widely differing GDP between countries on economic modelling, often economists will use what is called ‘equity weighting’. With this method, emphasis is put on the increase and decreases in GDP in specific countries or regions, with this then fed back into models on a weighted basis, as opposed to the world as a whole just being examined for absolute changes in GDP.

For example:- many of the initial effects of climate change on the wealthy developed countries (mainly those in the global North) will be positive e.g. less deaths due to cold in winter. As the developed countries takes such a huge chunk of global GDP, any positive effects on the north will have a significant positive effect on global GDP, at least for the initial impacts of climate change.

Conversely, as the global south controls a small portion of GDP, any negative effects there – even if very large for those countries individual GDP – would not have a large effect on overall global GDP. However, the effects on the people in these countries could be catastrophic, especially for those already on the margins of society.

The effects of climate change are already being felt by those in the south, and they will continue to be the ones who bear the worst impacts of climate change first, even though they can afford it least, and are least responsible for the CO2 causing the problem.

Equity weighting can partially correct for this inherent bias towards countries which are already rich.

Any good economist knows this, and will flag it in their work on the economic impacts of climate change. Often however, it will not be given the prominence that some feel it might deserve – for example, in this paper  “Checking The Price Tag On Catastrophe: The Social Cost Of Carbon Under Non-Linear Climate Response” – the following is the final note, on the final page:

“Although not discussed in reference to the scenarios presented here, with equity weighting the projected damages of climate change increase significantly, including in explorations of severe climate change damages (Tol, 2003). Choices about discount schemes are critical to the final 21 marginal damage projections, and these are partly ethical decisions about how to treat future generations that can only be made by policy-makers”

I am not sure if the final note on the final page is the best place for this information, but at least this is highlighted in the paper. Let’s hope policymakers are paying close attention to the papers they are presented with, including the very last note on the very final page.

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61 Responses to The economics of climate change: discounting the future, ignoring the poor?

  1. DF says:

    The economics of climate change: discounting the future, ignoring the poor?

    You know, I was immediately put in mind of a certain ESRI pundit when I read the title, and turned out to be right (and yes, it is very noticeable in his output. A recent example closer to home was his essential admonition to Cork flooding victims that they should essentially ‘suck it up’, as it generated opportunities for business!).

  2. DF says:

    I am not sure if the final note on the final page is the best place for this information, but at least this is highlighted in the paper. Let’s hope policymakers are paying close attention to the papers they are presented with, including the very last note on the very final page.

    I also feel like noting, apropos of no-one in particular, that attempting to ride both the horse of academic credibility and that of catering to one’s partisan ideological politics rarely turns out well, and that eventually the public (and journalists) get wise to such characters and their attempts at sleight of hand.

  3. John Gibbons says:

    Good article Paddy.

    In the same vein, an extremely important paper was published in American Meteorological Society’s Journal of Climate in May 2009. The study used the MIT Integrated Global Systems Model, a detailed computer simulation of global economic activity and climate processes that has been developed and refined since the early 1990s.

    The MIT model, unlike any other, performs highly detailed analysis of the effects of economic activity coupled with the effects of atmospheric, oceanic and biological systems. “In that sense, our work is unique”, says study co-author Ronald Primm.

    Their comprehensive computer modeling underwent 400 runs and its findings indicate a median probability of surface warming of 5.2 C by 2100, with a 90% probability range of 3.5 –7.4 C. Of course, even the very best case scenario here is a sure-fire global catastrophe. This is very significantly more pessimistic than the median projected increase in their previous (2003) study of 2.4 C.

    The differences are mainly accounted for by improved economic modeling and newer economic data showing less chance of low emissions than had been projected in the earlier scenarios. And this study was well before the do-nothing outcome from Copenhagen last December. In other words, failure to act, act now and commit to deep and urgent emissions cuts on a global scale and a median 5.2C is coming right at us. This is very significantly worse than the IPCC ‘consensus’ range of emissions scenarios published in 2007, but based on older data.

    You would think the above scenario would have every expert in the field scrambling to demand immediate government action. You would be wrong. Around the same time as the MIT study was published, the ESRI ‘Research Bulletin’ 2009/1/1 was issued. Among its insights on climate change: “Just because something is new and different does not make it wrong. Climate change will take us into uncharted territory, but so do many other things”. Quite.

    Or, if you prefer: “The impact of climate change is relatively small….Although the impact of climate change may be small, it is real and it is negative. Climate change is likely to have a positive impact in the first half of the 21st century, and impacts turn negative later”.

    And more: “Note that impacts (of climate change) do not exceed 1.3 per cent of GDP in the 21st century”. Great news then: in the smouldering remains of our charred biosphere, the one thing to magically survive the collapse of the global ecosystem and industrial civilization is GDP!

    And more: “Studies that have been subject to peer-review tend to be more optimistic about climate change than studies that have had no quality control. That is, a lot of the scaremongering is not based on sound science. The Stern Review is the best-known example of pseudo-scientific exaggeration (Yohe and Tol, 2007).”

    The MIT study has been subject to the full rigours of peer-review, with lots of quality control. So it’s hardly ‘scaremongering’, even if its conclusions are quite terrifying. This paper is an example of “actual science”, not to be confused with “sound science”, which is a favourite term deployed by organisations and individuals seeking to “manufacture doubt” about climate science in order to ‘delay and deny’ any action to regulate emissions.

    And more: “Estimates have become less pessimistic over time”. And my personal favourite: “Ireland has little to fear from climate change”. In a world where median temperature has risen by 5.2C in a single century or less, this assertion could only have emanated from a social scientist, since it is based on a personal belief system and is entirely incompatible with physical science (the former is the made-up stuff, physical science is the real stuff, reflecting the inconveniently inflexible laws of physics).

    As public ethics professor, Clive Hamilton reminded us in his recent book ‘Requiem for a Species’, back in the 1980s, the renowned institutional economists JK Galbraith and Wassily Leontief wrote: “departments of economics are graduating a generation of idiots savant, brilliant at esoteric mathematics yet innocent of actual economic life”.

    To savour the true value you as a taxpayer are getting for the money we all spend funding the ESRI, this ‘Research Bulletin’ in its esoteric entirety, can be downloaded below:

    A summary of the MIT paper is available here:

  4. Joseph Curtin says:

    @ John and Paddy

    Thanks for the excellent post/comment

  5. Brian O'Brien says:

    Hear hear, Joe. Agree absolutely. Terrific posting from Paddy and John’s critique of that ERSI bulletin is simply devastating. Amazing the things you DON’T get to read about in the newspapers or on RTE!

  6. Richard Tol says:

    The wonders of the green mind.

    John starts by praising Paddy. Then he goes on to attack me — oblivious to the fact that Paddy summarized my research until about 2007. John then refers to an MIT paper about something else entirely to discredit my work — unaware of the fact that I favor stricter emission controls than the main climate economists of MIT.

  7. Pingback: The Irish Economy » Blog Archive » Paddy Morris on the economics of climate change

  8. John Gibbons says:


    Wiggle and twist all you like. The c.r.a.p I was quoting from above is yours and yours alone. If you are going to write rubbish like this, at least be prepared to defend it. Just because no one in the ESRI seems to care what goes out under their name, don’t assume everyone is so blasé.

    BTW, how are things going with your colleagues Nigel Lawson, Benny Peisner, Ian Plimer et al over at the denialist front ‘Global Warming Policy Foundation’? Doubtless your mathematical skills are put to good use by this anti-science organisation on whose ‘Academic Advisory Council’ you serve. Or maybe you’re really there to set them straight (supporting evidence here, please).

    Is it uncharacteristic modesty on your part that prevents you from listing this bizarre GWPF affiliation on your ESRI staff page? If my mind is ‘green’, what colour would that make yours, Richard? Yellow, perhaps?

  9. Richard Tol says:

    I’m affiliated with ESRI, Vrije Universiteit, and Trinity College, a fellow of GTAP, and a member of EA.

  10. EWI says:

    That linked climate change ‘research bulletin’ is really beyond parody, even for the narcissistic Mr. Tol. From the references at the back, in order:

    Tol and others
    Tol and others
    Tol and others
    Tol and others


  11. EWI says:

    @ RTol

    I’m affiliated with ESRI, Vrije Universiteit, and Trinity College, a fellow of GTAP, and a member of EA.

    And also with the GWPF (hangout of the most notorious frauds and hucksters in the climate change denialism industry), as John Gibbons has pointed out.

    So, Mr. Inhofe 500, what do you say to that…?

  12. John Gibbons says:


    bailing out so soon – cat got your tongue then? You publish drivel and pass it off as analysis. It – and your bizarre affiliations with denialist crackpots – is brought to light, and the above is really the best you can do? Oh dear, oh dear, oh dear, as Uncle Gaybo used to say.

    Or how about a back-flip, Lomborg-style? Don’t worry, Richard, no one on PrimeTime or the papers can tell the difference between science and propaganda anyhow, so your status as the “go-to guy” looks secure. Congratulations. You must be so proud.

  13. Richard Tol says:

    I’m not affliated with the GWPF.

    I’m on their advisory board. I’m on many boards, and I advise many organizations.

  14. Adrian Kelleher says:


    A raging scientific debate is in progress between eminent economist Professor Richard Tol on the one hand and shady purveyor of gray-literature propaganda Professor Richard Tol on the other.


    …he writes that “Richard Tol cites himself on average 3.4 times per paper, with self-citations accounting for 47 per cent of his total citations.”

    While here:

    …he concludes that “other-citations discriminate for paper quality and relevance, but self-citations do not”. Touché!

    Elsewhere, the nefarious Prof Tol decries what he calls “new religion of anthrogenic global warming”; thankfully Prof Tol is on hand to point out that the science is sound and, lacking any qualifications in the physical sciences, he wouldn’t dare question it.

    Bad Professor Tol says Bjorn Lomborg, a figure denounced for “persistent, repetitive and pervasive misrepresentation” by his colleague Gary Yohe, “successfully punches holes in climate hysteria”. This would be a massive disaster if Professor Tol weren’t on hand to clear matters up for us, pointing out that Lomborg “gives a misleading impression of the magnitude of the climate change problem”.

    Who’ll win out, Tol or Tol? One seems destined for the IPCC, the other for an olympic gold in mental gymnastics.

  15. John Gibbons says:


    Poor Richard is reduced to arguing that he can be both on the GWPF’s ‘Academic Advisory Council’ and at the same time “not affiliated with the GWPF”.

    I can only imagine how talking out of both sides of your mouth for a living must eventually, er, take its Tol.

    On your above point re citations, I was brought up, a good Catholic, to believe that repeated and uncontrolled self-citation would lead to hairy palms and eventual blindness. The nuns may indeed have been onto something there!

    If the ESRI had any real internal QC standards, ‘Research Bulletin’ 2009/1/1 would never have been allowed to be published. Below is an extract from correspondence I received some months back from the ESRI director, Prof Frances Ruane in response to a query as to the appropriateness of having an ESRI professor lend his name to a denialist think-tank:

    “…As you will see the ESRI and its staff, particularly Professor Tol, are devoting considerable resources to helping policy makers in Ireland and elsewhere understand what needs to be done to tackle the problem of global warming and how efficient policies can best be implemented in Ireland, the EU and the world as a whole. I do not see Professor Tol’s membership of the Academic Advisory Council of the Global Warming Policy Foundation (GWPF) as being in any way inconsistent with his role as a researcher at the Institute – indeed, the purpose of such advisory bodies in my experience is to ensure that different viewpoints can be debated and this is precisely where Dr Tol is well placed to contribute.”

    QED. In the kingdom of the blind, the one-eyed economist is truly king!

  16. Joseph Curtin says:

    @ John/Adrian

    For another more recent example of some Tol on Tol action, see:

    Bad Tol first reliably informs us that:

    “Twenty years of economic research pooh-poohs the idea that there is an impending catastrophe”.

    But then good Tol reasserts his dwindling credibility by stating:

    “If the climate pessimists are right, we would have avoided a catastrophe”

    by taking action.

    It’s easy to poke fun, but he does seem to have had something of a Damascene conversion if the paper he just posted on is to be believed.

    Here we see a 1% pure rate of time preference employed, and the conclusion is reached that:

    “there is dangerous climate change as well as dangerous climate policy; and that the appropriate carbon tax is bounded from below as well as from above. Our model suggests a range of $20-330/tC.”

    Can’t argue with that really. Although the immediate imposition of a global carbon tax of $330 would probably raise some eyebrows.

  17. John Gibbons says:

    Only in Ireland could someone be (a) an eminent research professor and (b) a joke, and get away with it for years. Then again, our public life is littered with such figures. McCreevy. Ahern. Cowen. Kenny (P.). At least we have finally begun to critically appraise the bullshit emanating from the political classes. The economics Hierarchy, despite scandals, have yet to be subjected to sustained critical analysis. And into that vacuum pop figures like R. Tol.

  18. Richard Tol says:

    You do not understand the subtleties of academic association.

    At ESRI, VU, and TCD, I have duties, responsibilities, and a salary.

    At GTAP and EA, I have responsibilities and non-pecuniary renumeration.

    At GWPF (and a range of other organizations), I have neither responsibilities nor renumeration. I am in no way accountable for what they do, and they are in no way accountable for what I do.

  19. John Gibbons says:


    Thanks for clearing that up then. Since you’re quite the expert on subtleties, here’s one for you:

    Your GWPF colleague Ian Plimer recently launched the UK Independence Party’s anti-climate change campaign. Would that make Plimer affiliated to fascists, or just an advisor? (former UKIP member, Robert Kilroy-Silk described his erstwhile colleagues as “bloody right-wing fascist nutters”).

  20. Richard Tol says:

    I am no expert on the rules of citizenship and political affiliation in the Commonwealth.

  21. John Gibbons says:

    “A major conclusion of this (ESRI MEDIUM-TERM REVIEW: 2008-2015) is that, despite the temporary difficulties the Irish economy currently faces, the medium-term prospects remain bright.

    “It is likely that Ireland’s standard of living, which is already one of the highest in the EU and indeed the world, will show some further relative improvement in the coming decade. As the very substantial investment in infrastructure currently under way begins to come on stream, this too will enhance the quality of life for many residents. With the prospect of a return to full employment after the current difficulties, a gradual improvement in the quality of public services, and a substantial rise in the resources available for household consumption, the next decade should see relatively steady economic progress in terms of living standards.”

    ESRI MEDIUM-TERM REVIEW: 2008-2015. Authors: R. Tol, John FitzGerald, et al.

    “Note that impacts (of climate change) do not exceed 1.3 per cent of GDP in the 21st century” – Tol, R. ESRI Research Bulletin 2009/1/1

    Since Prof Tol and colleagues could hardly have got their projections for one tiny country in the IMMEDIATE FUTURE more completely and utterly arseways, pardon me for being just a tad skeptical when the same expert rubs his crystal ball and makes “projections” down to decimal point accuracy for the entire Global GDP for the next NINETY years! This is Lomborg with a beard.

    Seriously, if the ESRI do ever rumble you (or get Bord Snipped themselves) a career in stand-up comedy (or derivatives trading) beckons.

  22. Adrian Kelleher says:

    Just how many Professor Tols are out there? Has the Professor Tol that wrote in the Sunday Business Post of 27/1/’08 that “climate change is a serious problem” met the Professor Tol that today advises the government that “the impact of climate change is relatively small”?

  23. EWI says:

    @ RTol

    I am no expert on the rules of citizenship and political affiliation in the Commonwealth.

    As ever, not responding to the actual question. “Tricky Dicky” indeed.

  24. Brian O'Brien says:

    Some extraordinarily serious charges have been put to Prof. Tol on this thread. He’s had numerous responses posted, yet not one addressing the substantive charges against him. Amazing stuff. I read that Bulletin from the link above, have to confess it’s as poorly argued and basically illogical piece of work as I’ve come across in a long time.

    Light touch regulation and ideologically flavoured research – a potent combination to run a country onto the rocks – Mission Accomplished, chaps!

  25. Adrian Kelleher says:

    @Brian O’Brien

    Extraordinarily serious charges is indeed the only phrase — and Prof Tol has the option of using the courts to seek redress if he feels he’s being treated unfairly.

    This will not happen because the contradictory statements he makes, tailored for specific audiences, don’t stand up to patient examination. His concern is to railroad policy down a particular avenue and in his hands science is reduced to a tool to pursue of this aim.

  26. John Gibbons says:

    Sorry folks, looks like R. Tol has fled the crime scene. Looks like he’s a lot happier dealing with fresh-faced young researchers than the more grizzled types who have gathered here and elsewhere to pick carefully through the crusty carapace of pseudo-scholarship to the motherlode of ideology that lurks beneath.

    The fight was taken to him on and Tol couldn’t even defend himself on his own patch. In case you missed it, here’s a quick flavour:


    ADRIAN: Just to digest your views into one nice package: You say Lomborg “spout(s) nonsense” and “gives a misleading impression of the severity of climate change” ……. “plays a useful role in the debate on climate policy” and “successfully punches holes in climate hysteria”. Clear everyone?

    RICHARD: Most people do good things and bad.

    Well, Lomborg “spouts nonsense” – that’s new indeed. Looks like the owner/pet relationship is finally coming unstuck. Now that Lomborg has been shredded, time for Tol to quietly stick the knife in to his old Copenhagen Consensus paymaster and pretend like he never really rated him in the first place – sweet!

  27. Richard Tol says:

    No worries, I’m still around.

    As I’ve noted before, I do not share your green-and-brown world view. In fact, I think it is perfectly normal to disagree with people on some points and agree with them on other points.

  28. Paddy Morris says:

    Tol on Lomborg:

    “Bjorn Lomborg is a not a scholar. Scholars publish their research in peer-reviewed journals. Lomborg has one such paper.

    Lomborg writes books with popular science. In popular science, there is a trade-off between accuracy and sales. Lomborg sells well. In fact, his first book did so well that he can now afford to be more accurate.

    Lomborg successfully punches holes in climate hysteria. As panic is a bad adviser, Lomborg plays a useful role in the debate on climate policy. Lomborg provides counterbalance. He is therefore not balanced”


    So Lomborg: not a scholar, not that accurate in his work and not balanced. High praise indeed.

  29. Pope Epopt says:

    Good work, ladies.

    This high-priest of neoliberalism masquerading as a social scientist needs as much debunking as we can muster the energy to provide.

  30. John Gibbons says:


    given your interest in colour-coding people, how about ‘Chameleon – with a persistent yellow streak’ to describe your good self?

    Regarding what is and isn’t “perfectly normal”, most folks don’t think it’s at all normal to hold completely contradictory positions simultaneously, and to shape-shift according to whatever expediency is currently being served.

    That is perhaps what we might expect of PR people, whose job is to cater to the whims of their various clients, but such moral and ethical elasticity hardly extends to research professors in publicly-funded institutes.

    You’ve had any number of opportunities here to defend ‘Research Bulletin 2009/1/1’, and assorted other embroideries, but you can’t/won’t do it. So yellow it is…

    In the interest of fairness, you should be awarded a losing bonus point for perseverance in the face of overwhelming odds, and having the courage to ignore the obvious wisdom of turning back when you’re headed down a cul de sac.

  31. Richard Tol says:

    The research bulletin that you are so upset about is a summary of three papers published in the Journal of Economic Perspectives, Environmental Values, and Perspectiven der Wirtschaftspolitik. You should write up your disagreements and submit it to the any of these journals.

  32. John Gibbons says:

    To paraphrase EWI, see below for full list of supplied references to ‘Research Bulletin 2009/1/1′ (Author: R. Tol)

    Tol and others
    Tol and others
    Tol and others
    Tol and others

    Self-citation indeed. What a sad litany of academic ononism from the Yellow Prof.

  33. Paul Barry says:

    I laughed out loud reading Adrian Kelleher’s post above. Wonderful stuff. Well done everyone. Tol is a joke!

  34. Barry Reilly says:

    “Wirtschaftspolitik” – my Dutch is not great, does that by any chance translate to ‘witchcraft politics’? If so, this would explain Mr Tol’s approach better than any of the preceding contributions – just a thought!

  35. EWI says:

    I note further that RTol was invited in a thread on IrishEconomy some months ago to name some of those areas on which he had just claimed not to agree with the GWPF fraudsters and cranks, and declined to do so.

  36. John Gibbons says:


    He has been asked the same question here, and has refused repeatedly to answer. Given Tol’s support for some of Ian Plimer’s madder personal theories about submarine volcanoes and CO2, it seems the quack mining industry ‘scientist’ and the “neoliberal…masquerading as a social scientist” (to borrow Pope Epopt’s description) are very comfy bedfellows over in the GWPF.

    If Tol wanted to shut us up for once and for all about the GPWA, all he has to do is place all the advice he has given them in the public domain (after all, he demands no less from climate scientists than absolute transparency). Then we can judge him by his deeds. Which, I suspect, is precisely why this won’t happen.

    Also, would be good to know all income received by Tol from the GWPA and the ‘Copenhagen Consensus’. Given his high dudgeon over the CRU, etc., he is bound to be delighted to make all this information publicly available.

  37. Richard Tol says:

    I never asked for personal details on CRU staff. I did note that in one of the emails they seemed to discuss inappropriate use of US public money and assistance to tax evasion in Russia. I don’t care about that as I do not pay taxes in either of those countries. The US authorities did take note of this, but have not (yet?) acted.

    The ESRI and its staff are, obviously, subject to all the usual audits.

    All my data and code is freely available on the web, and has been for years.

  38. John Gibbons says:


    bait-and-switch yet again: the question you were asked is: “If Tol wanted to shut us up for once and for all about the GPWA, all he has to do is place all the advice he has given them in the public domain”

    You can keep your personal info, what we’d like to see is the written advice, policy papers and other input you’ve been giving to the GWPF. In much the same way as you demanded that the CRU people be transparent with the data upon which their calculations are based. You have also been asked to ITEMISE the areas where you DISAGREE with ANYTHING that the GWPA stand for.

    Their grossly misleading front page temperature chart, for instance? (well, the latest version of it, since the original was not just misleading, but actually simply wrong – even for the cherry-picked years it purported to represent).

    Is this plain enough for you?

    (I used to earnestly wonder how anyone who cared about their reputation would associate with a rag-bag of superannuated former/failed scientists, zealots and paid hacks like the GWPF. Silly me.)

  39. Adrian Kelleher says:

    As David Aaronovitch wrote in the Times, “Sceptic … is simply a misnomer. People such as Lord Lawson are not sceptical, for if one major peer-reviewed piece of scientific research were ever to be published casting doubt on climate change theory, you just know they’d have it up in neon at Piccadilly Circus. They are only sceptical about what they don’t want to be true.”

    If a ‘sceptic’ is getting needled by The Guardian it’s one thing but if The Times can’t stomach him you know he’s in trouble.

    Keeping its funding secret and pumping out the ‘grey literature’ Tol hypocritically attacks elsewhere, GWPF has failed to rise above the level of the Bookers and Delingpoles. Was it worth it, Professor?

  40. Richard Tol says:

    I suggest that you either complain with the relevant authorities or stop your campaign of insinuation.

  41. John Gibbons says:

    “It will take many electoral cycles and all major countries to address the problems associated with climate change. Partisan advice will be unpicked, sloppy research will be exposed….Sustaining a climate policy that is effective, acceptable and durable can only be based on sound and impartial advice from institutions that do their science sustainably over many decades…”

    – The above is an extract from an Editorial in Der Spiegel by R. Tol and one Roger Pielke. (The latter is listed by in its ‘Climate Skeptics’ list. A Huffington Post article on Pielke stated that he has “been playing footsie with denialists and right-wing ideologues for years; they’re his biggest fans”.)

    Here’s an offer, Richard. You stop spreading misinformation about climate change, including such notorious crap as: ““Note that impacts do not exceed 1.3 per cent of GDP in the 21st century”, and I will happily cease my alleged ‘campaign of insinuation’.

    “Climate change is the mother of all externalities, larger more complex, and more uncertain than any other environmental problem……uncertainties about climate change are vast – indeed so vast the standard tools of decision-making under uncertainty and learning may not be applicable…Many economists would argue that climate change is beyond cost-benefit analysis…”

    Guess who wrote the above: yep, R. Tol again (‘The Economic Impact of Climate Change’). Maddening, isn’t it? The same person who on the one hand understands the very real potential for a climatic Pandora’s Box being loosed this century, on the other hand is busily reassuring policymakers that Business As Usual is A-OK, and besides, the “mother of all externalities” may in fact turn out to be “new and different…” And of course, “Just because something is new and different does not make it wrong. Climate change will take us into uncharted territory, but so do many other things”

    So, an environmental threat on such a scale that R. Tol describes as “larger, more complex, and more uncertain than any other environmental problem…”is really just another ‘new and different’ thing – like the iPhone 4, perhaps?

    This is sheer bloody lunacy, Prof., and what’s worse, you know it. Oh, and yes I did notice that you have, yet again, dodged the substantive issue, which is a request that you put your correspondence in full with the GWPF into the public domain, in the interest of the same openness and transparency you demand of climate science.

  42. EWI says:

    ‘Good’ Tol had this to say on Irish Economy, arguing against cap-and-trade a few posts later:

    “The atmosphere is the common property of humankind. The European Union appropriated part of that”

    ‘Bad’ RTol, of course, argues that damaging the ‘common property’ atmosphere would (he tries to suggest) only harm the poor in the third world, so nyah-nyah.

  43. John Gibbons says:


    For the record, here’s some more double-Dutch from Prof Tolberg, on this blog, Dec 1st last, while picking an argument with Joe Curtin on a pre-Copenhagen analysis by Joe:

    “Nuclear war would have easily killed 20% of the world population. Climate change is nowhere near as a deadly. Science does not demand any level of emission reduction. The desired level of emission reduction is a value judgement, not a scientific fact.”

    Three assertions in four short sentences, not one of which holds water. Class.

  44. Adrian Kelleher says:

    He could have corrected the second sentence to Climate change is no where near as deadly unless the stresses it introduces to world politics result in nuclear war.

  45. John Quiggin says:

    Most people would prefer 10 euros now to 20 euros in 10 years time. This implies that they would not buy a 10-year bond yielding 7 per cent. Oddly enough, the German government seems to be able to sell all it wants at 2.25 per cent. This is a nominal rate – given positive euro inflation the real rate (which is the one normally used in these calculations) is more like 1 per cent.

  46. Adrian Kelleher says:

    Plus Tol’s description of Stern as like “a colonial master” for advocating a 0.1% time preference was unjustified both ethically and economically.

    The discount rate — the magic quantity that literally allows the economists to come up with any answer they like — follows from the fact that people want to see the money they invest back before they die. Societies aspire not to die, therefore 0.1% is as justifiable as 5%. The 0.1% rate implies moral defensibility, the 5% rate represents self-conscious theft from future generations and economics does not distinguish either way.

  47. Richard Tol says:

    The “colonial master” did not refer to Stern’s particular choice of discount rate.

    Someone with your keen sense of history should be able to place Stern’s upbringing and education in context.

  48. EWI says:

    Ahh, the reappearance of ‘Good’ Tol. Maybe he can hang around long enough to give his opinion on this bunch below, in the same proletarian spirit?

  49. Adrian Kelleher says:

    This is all starting to fry my brain — are we dealing with a real person here or some sort of agent-provocateur?

    From here:

    Thomas Fuller: 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?

    Tol: 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.

    Now explain how any reasonable person could interpret the “colonial master” reference as relating to anything other than the discount rate?

  50. Richard Tol says:

    The “colonial master” refers to Stern’s imposition of values, rather than to the values he seeks to impose.

  51. John Gibbons says:

    There is a bit of a queue forming on this blog to send up the ESRI’s own Prof. Pangloss. Tonight, however, a clear winner has emerged: yes, no contributor to date (including this one) has come close to lampooning him quite as thoroughly as….Prof. Tol himself!

    In doubt? Go back to Adrian’s post at 16.41 today. Then read Tol’s prompt, unequivocal rebuttal. Then read Adrian again at 21.35 closing out the deal – simply by placing Tol’s own comments in their full context. No tricks, no spin, just his own words, served cold, on a platter. From here, it starts to get into crazy-land, with Tol’s response at 22.22 above. Yes, it’s Sunday, yes it’s late, but this is even nuttier, Professor, than the original remarks that Adrian was relaying.

    But wait. There’s more. I took a spin through the interview from which these comments were taken, and have pulled out some of his comments, in full and at length, to get a clearer flavour of what we’re dealing with:

    “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…

    “…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”…

    “The direct way to tackle impacts (of climate change) 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.”

    Someone please clear this up me otherwise. Either I’m stone crazy, or the above remarks are. One or the other.

    “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…

    So, economists have shown that climate change is not the biggest environmental problem in the world. Phew, what a relief. There was me fretting needlessly about what climate scientists, science academies from all over the world and all the major peer reviewed physical science research was telling us, when ECONOMISTS had the answers all along!

    Who on this blog “craves a catastrophe”, as weirdly asserted above? I have 2 kids under the age of 8, so I have a strong personal stake in the heavily discounted future that econo-twists are trying to sell down the river. Just because you don’t give a toss about the future, don’t assume everyone else feels the same way.

    As for “People do not need government support for adaptation”, of course, as sea levels rise, individuals can spend the tens of billions needed in coastal defences and relocating key infrastructure themselves. Maybe from their SSIAs. Besides, adaptation to runaway climate change is going to be another Tolborgian adventure, with loadsa money to be made – just like our highly profitable flood disaster last winter, the one that Tol was telling us was a timely boost to GDP!

    Here’s the punchline. ideologues like Prof Pangloss do in fact earnestly, truly believe they know more about climate change than actual climate specialists. Shure didn’t Pangloss do his PhD in the economics of climate change, thus making this social scientist, at a stroke, more expert than the (actual) experts. In all fields. Against all evidence. He and his fellow ideologues know best. Trust them. Really.

  52. Richard Tol says:

    As I have argued and others have shown, to some people, environmentalism is the new millenarialism, and climate change the new Ragnarok.

    As you know, I think that these people are likely to be disappointed because the probability of catastrophic climate change is remote.

    My research shows that climate change is a problem. Epidemiologists have shown that climate change is likely to kill hunderds of thousands of people per year. Urban air pollution kills millions if not tens of millions.

    Climate policy is therefore important, but not a priority.

  53. John Gibbons says:

    “Climate change is the mother of all externalities, larger more complex, and more uncertain than any other environmental problem……uncertainties about climate change are vast – indeed so vast the standard tools of decision-making under uncertainty and learning may not be applicable…Many economists would argue that climate change is beyond cost-benefit analysis.”

    R. Tol (‘The Economic Impact of Climate Change’).


    Enough said.

  54. Richard Tol says:

    In the above quote, “larger” does not refer to the scale of the impact, but rather to the scale of the externality.

    Urban air pollution is a larger problem than climate change. It is widespread but regionally confined — compare Tianjin and Seoul.

    Climate change, on the other hand, is a global externality. Depletion of the ozone layer is also a global externality, but climate change is larger because it is caused by a wider range of activities and its impacts affect more activities.

  55. John Gibbons says:

    “Political satire became obsolete when Henry Kissinger was awarded the Nobel peace prize.”
    – Tom Lehrer

    Ditto for Tol as a ‘climate change expert’. Parody is wholly inadequate.

  56. Adrian Kelleher says:


    As with Lomborg, you are a charlatan without integrity for whom words mean nothing.

    All anyone needs to do to confirm this is to read the 7 posts prior to this. Thankfully, critical examination of your record will rise in proportion to your prominence in the debate, meaning that the media prominence you crave will be denied you.

  57. John Gibbons says:

    “…We have no idea how much good we could do for the world if we made more free trade; we could do ten times more good for the world if we got a little more free trade than will happen if bad things (sic) because of global warming…”
    – Bjorn Lomborg, Fox News – Business, May 28, 2010.


    Tolborg ideology 101.

    “departments of economics are graduating a generation of idiots savant, brilliant at esoteric mathematics yet innocent of actual economic life”.
    – JK Galbraith and Wassily Leontief

  58. John Gibbons says:

    Great Economic Minds of Our Time, Part 1:

    a) “It is impossible to say how the Irish economy would have developed had Lehman Brothers not collapsed.”

    – R. Tol, June 1, 2010

    b) “But if not for the collapse of Lehman Brothers, which in my opinion became a catalyst [for] the Irish crisis, we would have two to three years to face the problem…”

    – B. Ahern, October 2010.

    Just in case you wonder who writes – or inspires – Bertie’s comedy scripts…..

  59. Eli Rabett says:

    Colonial Master Tol:

    How can one use a discount rate that is appropriate for capital investment on a problem where the costs also accumulate, e.g. the cost of not dealing with carbon contamination of the atmosphere increases faster than linearly with time, admittedly with a substantial delay. The cost of inaction today shows up 20-50 years from now.

  60. John Gibbons says:

    Sadly, Tol has fled the crime scene. Once his ideology has been unpicked, there’s little left by way of cover. It’s taken a while, but his methodology is now better understood, so his scope for mischief-making has (for now) been limited. Expect Tolborg 2.0 to reappear any day now, with a brand new flavour of snake oil to peddle, and perhaps some nice new denialist think tank affiliations. A bit like FF under ‘Ricky’ Martin, come to think of it…

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