Nigel Lawson

An Appeal to Reason

It will be recalled that the report's best estimates of the likely warming of the planet over the next hundred years range from a rise of 1.8°C/3.2°F to one of 4°C/7.2°F above the estimated 1980-1999 average temperature, depending on the emissions scenario (or 'story line') chosen. The report then takes the upper end of the range—a 4°C/7.2°F warming—and claims that overall, this would mean a loss, by the end of the 21st century, of anything between 1% and 5% of global gross domestic product. It adds that this is the global average figure, and that developing countries will experience larger percentage losses.

Given that this conclusion derives from the top end of the range, and given that the IPCC insists that all its scenarios are of equal validity, it is clear that, on the basis of the IPCC's own methodology, there may be no net cost at all from global warming over the next hundred years: it may even be beneficial. But let us err on the side of caution, and take not only the top end of the IPCC's warming range—a rise of 4°C/7.2°F over the next hundred years—but also the top end of its projection of the net damages, a loss of 5% of world GDP.

A loss of 5% of world GDP would undoubtedly be a very significant loss indeed, but to put it in perspective we need to do some simple arithmetic. Heeding the IPCC's very proper warning that the loss will be greater than 5% for the developing countries (and thus less than 5% for the developed world), I shall make the calculations on the assumptions of a 10% loss of GDP in the developing world and a 3% loss in the developed world.

Again, to err on the side of caution, let us look at the gloomiest of the IPCC's six scenarios (that which, the reader will recall, the Stern Review arbitrarily chooses as its business-as-usual base case), even though it is not the scenario which generates the 4°C/7.2°F temperature rise, but one of 3.4°C/6.1°F. This is the scenario which has the lowest rise in living standards, partly because it has the lowest rate of technological advance, but more particularly because, by a long way, it has the highest projected growth of world population—to more than 15 billion by 2100, or no less than 65yo higher than the United Nations' 'medium' population forecast for that year, and almost half as much again as UN's highest projection.

According to this scenario, living standards (measured in the conventional way as gross domestic product per person) would rise, in the absence of global warming, by 1% a year in the developed world, and by 2.3% a year in the developing world (these and subsequent assumptions are taken directly from the IPCC's Special Report on Emissions Scenarios). It can readily be calculated—using, to repeat, a cost of global warming of 3% of GDP in the developed world and as much as 10% in the developing world—that the disaster facing the planet is that our great-grandchildren in the developed world would, in a hundred years time, be only 2.6 times as well off as we are today, instead of 2.7 times, and that their contemporaries in the developing world would be 'only' 8.5 times as well off as people in the developing world are today, instead of 9.5 times as well off.

If we were to take the most optimistic of the IPCC's growth scenarios, which is after all the only scenario where the 'best estimate' is warming of as much as 4°C/7.2°F, in which living standards rise by 1.6% a year in the developed world and by 4% a year in the developing world (heroic, but think of China and India), the results are even more startling. To be precise, the great disaster facing the world from the prospect of global warming is that our own great-grandchildren would, instead of being slightly more than 4.8 times as well off as we are, be only some 4.7 times as well off. And as for their contemporaries in the developing world, instead of being 50 times as well off as the population of the developing world is today, they would 'only' be 45 times as well off.

Such are the ravages of global warming. This is the bottom line. This is the existential threat facing the globe. This is the disaster from which we are told we have to save the planet. This is the greatest threat facing the people of the world today. If only it were.

Of course, if it were a real threat, and one that could readily be avoided, it would certainly be worth avoiding it. But even if (and it is a big 'if') global warming could realistically be averted by cutting back drastically on carbon dioxide emissions, that is very far from costless. So we need to reflect long and hard on how big a sacrifice the present generation and their children should be asked to make in order to make it more likely that the generation a hundred years hence, instead of being many times as well off as we are today, will be even better off. And if we are fearful of appearing selfish, we can look at it the other way round. How great a sacrifice do we think the (very much poorer) people of Victorian England should have made to cut back on carbon dioxide emissions (for that was when it all began) at the birth of the industrial revolution?

Indeed, perhaps in hindsight the industrial revolution was all a ghastly mistake, and perhaps at any moment we will find our political leaders, who are as ready to apologize for the errors of their predecessors as they are unready to apologize for their own, apologizing for the industrial revolution, too.

There will no doubt be some who feel that to analyse the alleged threat of global warming in economic terms—that is, in terms of living standards—is profoundly mistaken, not to say immoral (despite the fact, incidentally, that the Stern Review, for example, is an attempt to do just that). Are not human lives themselves at stake? It is a fair question, but one that is not difficult to answer.

In the first place, natural disasters such as hurricanes, monsoons, droughts, earthquakes, tsunamis, and even pandemics (the vogue word for what used to be known as plagues), have always occurred, and no doubt always will; to attribute them to global warming is not science but political propaganda.

In the second place, where there is a clear link between human life and temperature, such as deaths from either extreme heat or extreme cold, we find that a wanner world would probably, on balance, save lives. Even more important in this context, if the proposed remedy is to attempt to cut back drastically on carbon dioxide emissions by abandoning cheap, carbon-based energy, the cost in terms of slower economic growth would itself cost lives, in terms both of a slower conquest of poverty (despite, incidentally, the global commitment to this) and the reduced resources available for, among other things, the battle against disease.

And in the third place, in no area of public policy do we in practice regard the saving of human life, important though it is, as paramount at all costs, irrespective of all other considerations. If we did, then (for example) we would impose a speed limit on the roads of probably not more than 10 miles an hour.