Dollar Sense on Global Warming: PWC Report

I've often complained that the financial costs to solve "solve" gobal warming cannot be justified based upon a reasonable return on investment and will probably result in a negative return. Of course, my belief is as subjective as is the information and claims from the other side, because adequate and reliable data does not appear available. However, now a report from PriceWaterhouseCoopers (PWC) titled "The World in 2050: Implications of global growth for carbon emissions and climate change policy" addresses the financial costs and benefits, but not in the direction that I expected, which makes me not only a skeptic of global warming but a skeptic of reports on global warming economics. From a PWC firm summary:

The rapid economic growth of emerging countries such as China and India — together with continued more moderate growth in today’s advanced economies — could have serious long-term consequences for global energy consumption and carbon emissions.

...The author...is John Hawksworth, head of macroeconomics at PricewaterhouseCoopers’ UK firm. He says: "As they increase in relative size to overtake the current G7 countries (US, Japan, Germany, UK, France, Italy and Canada), the emerging ‘E7’ economies (China, India, Brazil, Russia, Mexico, Indonesia and Turkey) will increasingly provide the motor for global growth and could account for almost half of global carbon emissions by 2050 according to our model. But this begs the question: Can the world sustain such rapid growth without serious adverse effects on its climate? Our new report provides one possible answer to how this might be achieved".

This report takes a lot more time than I have to analyze in depth, so this is my quick, and I mean really quick, take on it. You'll have to click on the link below to discover this wisdom.

Thanks for continuing. You have high expectations, don't you? BTW, I'll briefly mention that I have high respect for PWC, as I used to work for the firm and one of my classmates is its Global CEO. However, I don't have to agree with everything from them.

The report offers six scenarios but focuses on two: (a) No change in the the way the world operates called "business as usual" and (b) a scenario called Green Growth + CCS in which growth of emerging nations can be absorbed while reducing carbon emissions overall, which is the only solution claiming to end global warming.

Naturally, I have suspicions when an economist makes predictions, as they are notorius for making assumptions that are not based on the real world but that help fill in the models--maybe like global warming activists do with their studies. Well, there's a reason for jokes like this: A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Let's smash the can open with a rock." The chemist says, "Let's build a fire and heat the can first." The economist says, "Let's assume that we have a can-opener..." Okay, back to business.

The first scenario offered, "business as usual," I will ignore, as it is not realistic to assume that nothing will change. New energy sources are discovered, new technology is developed, and politics change. It is simply a baseline.

The second, one, "Green Growth + CCS," accepts, as its name indicates, certain "green" proposals: (a) a shift in fuels including doubling the use of non-fossil fuels, (b) reductions in energy use, and (3) significant investments in carbon capture and storage technology.

I can sum this scenario up as higher taxes, lower productivity, economic depression, and hopes on fantasy technology. How are its requirements realistic or achieveable? For instance, can a country reduce its energy needs with the population growing over forty years? It accepts politically unrealistic assumptions, assumes optimum rather than possible benefits, and relies on "scientific consensus," which is itself actually political rather than scientific. Consider this on the politics:

The report also indicates...that the G7 economies will need to reduce their current level of emissions by around half by 2050 to achieve this scenario, whereas the E7 economies would still be able to increase their emissions by around 30% from current levels.

See what I mean by politically unrealistic? That's why the U.S. Senate voted 95-0 during Clinton's presidency to oppose the Kyoto Treaty. The treaty in itself was not a "climate" treaty but a "political" one using economics as its club. As a specific, the PWC report also mentions that India could double their output of carbon emissions, because we'll make it up for them by cutting ours. If the people of India can find a way to handle our customer service from half-way around the world, I suspect that they could figure out how to contribute more on this issue, if they wanted.

The complete report can be found as a pdf file here. Read it for further information or to make up your own mind. Two related articles are: Cost of saving the planet: a year's growth and $1,000,000,000,000: the cost of capping greenhouse gas emissions.

The later one contained this quote, that caused me the most concern about the thought process behind the study.

PwC said it had attempted to put a price on slowing the growth in carbon emissions because it was impossible to calculate the cost of climate change. "If sea levels rise and a lot of people in Bangladesh drown do you calculate the loss of their lifetime earnings, even though they will be lower than for the UK? It is a difficult moral question," Mr Hawksworth said.

Run that by me again. Does he think that sea levels will rise so fast that people will drown? Hey, even the people of New Orleans had time to get to higher ground, and they didn't have 100 years notice. That mindset, lack of logic, and type of false argument bothers me.

This report deserves more attention than I'm going to take the time to give it, but be aware that the global warming deceptionists will trot it out as proof that we can and should do everything that they want, because a report from an accounting firm says that it pays for itself. In my humble opinion, the report represents more of the same "make the numbers work" attitude, which includes accepting the "consensus," which reasoning people don't accept. Paying for itself means that we suffer, optimistically, a full year's gross national product for the world, and speading it out doesn't make it doable.

Basically, through this report, global warming alarmists can claim that we need to act now--immediately--to avoid higher costs in the future. We need to trust their models and trust them--a big stretch for me. Still, before I drive our economies into the ground and let the non-coopertive "emerging " nations get a free pass, I want more information. We don't have to rush into this, and our delaying the last ten years hasn't resulted in disasters that they predict.

As an analogy, just because the auto service rep tries to alarm me about what can happen to my engine if the timing belt breaks doesn't make me replace it at 40,000 miles, like he hopes, rather than the 100,000 miles or more, which it should go. On global warming, we're not up to 5,000 miles, and auto service reps can be trusted more than the global warming people seeking profit, prestige, and power.

Let's go a few more years before replacing the belt. It won't be surprising when the claims of doom don't materialize; and, we'll save that money for other things that we do need, like education and medical care--which is "for the children," too. Right?