A short primer on climate change and the greenhouse issue

If the shape of a distribution and its ‘tail’ does remain the same, the relative change in the number of extreme events is always greater than the change in the average. To take an imaginary example, a few percent increase in the average rainfall of a place may cause far more than a few percent increase in the number of occasions of very high rainfall, and far more than a few percent decrease in the number of occasions of very low rainfall.

It is largely this mathematical consequence which makes the possibility of a small increase in global-average temperature and rainfall so significant. It raises the possibility that there will be large increases in heat waves, floods and other forms of extreme climatic event, and perhaps large decreases in the number of cold spells and droughts.

On the other hand it is also this mathematical consequence which allows a fair amount of uncritical overstatement about the possible disastrous consequences of climate change. There is no particular reason to assume the shapes of frequency distributions and their 'tails' will remain the same in a slightly warmer world.

The Impacts on Society.

The uncertainty of the science provides great opportunity for speculation about the possible impacts of an overall global warming. Many of the speculations are not particularly likely or even realistic. On the other hand the uncertainty ensures that any particular speculation cannot easily be disproved.

On the scale of nations there will almost certainly be both winners and losers. For instance, one can imagine that more very hot days could increase the human consumption of water and therefore the requirement for expensive water storage. On the other hand, fewer very cold days could decrease the losses of frost-sensitive agriculture. These sort of balancing example is rather more likely (at least in the larger and more economically diverse countries) than are extreme scenarios of absolute national disaster.

Indeed, in terms of purely economic welfare, a general proposition might be that climate change is potentially disastrous (as opposed to being simply a problem) only when the affected populations cannot move or change behaviour to take advantage of the change. It is probably not even a problem for those populations which, because of other changes in society, quite naturally shift position or behaviour on the time-scale of a few decades.

Thus most economists of the larger countries find it a little difficult to get excited about the possibility of climate change – at least as it might affect the purely economic sectors of their society. First, they say, climate change may not happen. If it does happen, then it is likely the impact will be more-or-less neutral on the national scale. And if it does happen and the overall impact is detrimental, then 'discount for the future' will ensure that the loss of value in the years to come is too small for the present generation to worry about. Discount for the future is a method of valuing future material goods from the viewpoint of the present. It is applied because most people would pay more for some material good now than for the promise of the same good in several years time.

Smaller countries might reasonably have quite a different view.

Many of the most powerful arguments for limiting greenhouse warming are based on preserving the current state of the environment. The arguments are necessarily qualitative, and usually (if subconsciously) involve application of a discount for the future much smaller than that appropriate for the purely economic resources of society.

Because the arguments are qualitative, it is difficult to establish that the impact of climate change will be inherently more significant than the impact of any other human activity which affects the environment. A classic example is the suggestion that a warmer world will allow the spread of tropical diseases to new areas. However, it has been argued that the spread (and eradication) of disease is so completely dominated by human activities such as the clearing of land and the transfer of populations that any impact of climate change would scarcely be noticeable.

What Are We Doing About It.

The Kyoto Protocol was negotiated by 160 nations in 1997. It is an attempt to limit national emissions of greenhouse gases in order to slow or halt an associated change of climate. Basically, the agreement sets emission targets for the individual nations. Australia, for instance, has agreed to limit its annual emission by the year 2012 to no more than 108% of its emission in 1990. For the world as a whole, the aim of the Protocol is to reduce the global emission of carbon dioxide to 5% below the 1990 value by the year 2012.

It is highly doubtful whether the nations will be able to meet the targets that have been set. And because, in any event, the potential costs to the nations are so large, it is still doubtful whether the nations will formally ratify the agreement.