A recent news article reports that the US and UK governments are urging the IPCC to frame the final version of its latest report to emphasize the “co-benefits” of government action, and the vulnerability of richer countries to “extreme” weather events. This change in emphasis (away from global temperature increases) shows the weakness in the standard argument for strong “government action” to limit carbon dioxide emissions, as we’ve been documenting here at IER. The change in the argument underscores that the critics all along have had legitimate points with the cost/benefit merits of aggressive intervention by the US government.

Here are the specific recommendations that the major governments gave to the IPCC, commenting on the original draft of its latest (Fifth Assessment) report:

Over 2,000 comments on the UN’s flagship climate science report have been submitted ahead of a week of negotiations that will determine the final text in Copenhagen.

A 181-page review of the draft seen by RTCC is packed with amendments government officials believe are necessary before it is approved for publication.

The UK wants the Intergovernmental Panel on Climate Change (IPCC) study to focus more the “risks of delaying action” as well as the “co-benefits of action”.

US comments say the study should stress how richer countries could be affected by future extreme weather events. “There are very few references to the vulnerability of wealthier countries to climate change,” they write.

As with much of the commentary coming out in favor of aggressive government regulation and/or taxes, the above language at first seems innocuous enough. But if we reflect on the significance of these requests, we realize that the standard case for cracking down on carbon dioxide emissions has been very weak, thus far. Specifically, the standard case never gave a convincing reason for Americans (or the British) to support a crackdown on carbon dioxide emissions.

The most obvious give-away is the UK’s call for the IPCC to stress the “co-benefits of action.” As we explained in this blog post, “co-benefits” refer to bonus items that society gets from government policies reducing emissions, over and above the standard claims of reduced climate change damage. In practice most of these quantified co-benefits are localized in nature, meaning that they are benefits that actually accrue to the country imposing the restriction. To be clear, we’re not putting words in our opponents’ mouths here. Let us repeat the title of a new IMF paper on this very topic: “How Much Carbon Pricing is in Countries’ Own Interests? The Critical Role of Co-Benefits.”

That title should set off alarm bells for the citizen who has been casually following the climate policy debates over the years. It’s not as if the proponents of cap-and-trade or a carbon tax have been saying all along, “Yes, this measure will make Americans poorer, but it will shower compensating benefits on the rest of the world so we should do it in the name of fairness.” Not at all. Rather, Americans have been hearing for years that immediate action is necessary to avert catastrophe, and that any economist who questions the cost/benefit of the measures must be a “denier.” Well, the new emphasis on “co-benefits”—rather than focusing on the costs and benefits of climate change itself—and saying how co-benefits are “critical” in making carbon pricing in a given country’s own interests, shows that those fuddy-duddy economists were right.

There is a similar pattern when it comes to the risk of “extreme weather events.” Again, this is a relatively new twist in the marketing campaign. It’s not as if the climate activists all along have been saying, “Chances are, the cost of a big carbon tax will outweigh the environmental benefits, and so it probably will make humanity poorer. But, there’s a small chance of a really bad weather or climate outcome, and so we should still go ahead and put these measures in place, like an insurance policy that costs you money but gives you peace of mind.”

On the contrary, the insurance analogy and “risk avoidance” angle has only come up in response to economists and other analysts getting hip deep in the IPCC’s own reports and telling the world, “Hang on a second, their own numbers don’t add up. They can’t justify these measures with a standard cost/benefit test.”

Now to be sure, even if we take the debate to these new areas of emphasis, the proponents of a large carbon tax have yet to make a solid case. For example, even on its own terms, we can’t justify a large carbon tax as an insurance policy; nobody in his right mind would buy such overpriced insurance. Furthermore, focusing on the risks in the US of specific, extreme weather events at best is useful information for business owners and local government officials; this information doesn’t play into the case for a general carbon tax or other mitigation policy, the way the disseminators of this information hope.

However, battling the interventionists on the new twists and turns in their case for a large carbon tax misses the forest for the trees. The crucial lesson here is that they have been misleading the public for years when they confidently said that “the science is settled” and that only a “denier” (or stooge for Big Oil) could possibly question that the cutting-edge computer models showed the slam-dunk case for immediate regulation. As they themselves are now admitting, the actual situation is much more nuanced, showing that the critics had a point all along. Originally the case for government restrictions on carbon dioxide emissions was portrayed as a “no-brainer” akin to changing the oil in your car, but now the analogy has shifted to buying fire insurance on your house. That shift in the rhetoric is very revealing: Years ago, aggressive government policies were not originally sold to the public as a form of insurance, because such language reveals the inherent uncertainty in the predictions of extreme loss.

What even the advocates are now admitting is that if you want to justify a large US carbon tax in terms of its impact on Americans, you need to bring in things besides conventional climate change damage, and you need to focus on “extreme” events on the risk curve that probably won’t happen. When the case for aggressive government regulation against emissions keeps evolving like this—and with critics being denounced in the harshest language all along the way—it should make any honest observer quite skeptical of the alarmists.

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