On February 27, 2018, I was the guest at the student-led Yale Political Union, debating the resolution, “The free market can solve climate change.” After I gave my opening remarks, the students questioned me and parts of the crowd either cheered or hissed (which is the standard format for these debates). Then some of the students gave shorter speeches, and finally I gave closing remarks.

A member of the audience captured the audio on his phone; at this link we posted everything involving me, but edited out the other student speeches. In this post I’ll summarize some of my main points from my opening remarks. If you follow the link above, you’ll also see specific highlights at certain moments in the debate.

The Free Market Can Solve Climate Change

In my main remarks, I first clarified that I was an economist, and that I was stipulating for the sake of argument all of the physical science put out by orthodox groups in the climate change debate. I was also going to rely on the leading computer simulations of the economic impacts from climate change. In particular, I was deriving my projections of climate change and potential economic damages contained in reports from the Obama Administration’s Interagency Working Group on the social cost of carbon (and from an economist whose work they relied on), as well as the United Nations’ Intergovernmental Panel on Climate Change (IPCC).

Notice that the typical claims in this debate over a “consensus” blend together several distinct chains in the argument. In order to invoke “climate change” as a rationale for aggressive government intervention into the energy and transportation sectors, we must proceed through the following sequence:

  1. The earth has warmed since 1750.
  2. Human activity is responsible for at least much of this warming.
  3. The human-caused warming is causing (or will cause in the future) large damages to humanity.
  4. The methods humans could use to mitigate this harmful warming are cheaper than the damages from unrestricted warming.
  5. We can trust the governments of the world with the power to correctly move us towards this improved tradeoff.

So in the above chain of arguments, when people talk about “the consensus of scientists” they are really only able to make their case on the first two points. After that, the alleged consensus begins collapsing, and in fact the policy debate centers on the last two points.

The next major point I made was that using Richard Tol’s survey estimates of climate change damages from the peer-reviewed literature (as I document near the end of this post), we can project that most likely global warming will shower net benefits on humanity for the next several decades. It’s only after the year 2050 or so that global warming will become a net negative for humanity. (To be clear, this observation by itself doesn’t knock out the case for a carbon tax. But it certainly defuses the alarmists on this issue, showing the enormous gap between the economic literature and the typical media treatment.)

In case this seems odd, consider: What are the chances that the ideal global temperature for humanity happened to exist in the year 1750? Is it really that outrageous to say a modest degree of warming (and higher concentrations of CO2) could help humanity? After all, plants grow better in CO2-rich atmosphere, and fewer elderly people die in the winter when it’s warmer. It shouldn’t shock us to discover that some reputable models show modest benefits for modest warming, and that we’re still in that phase.

Another point I made was that the “social cost of carbon” was not an objective fact of nature, like the temperature of the sun or the mass of the moon. (I made that point recently when someone likened the “social cost of carbon” to counting calories in a donut.) Instead, the suggestions for calibrating a carbon tax or limiting emissions must make projections about economic growth (and emissions) over the next century at least, and must make projections about how rapidly renewable technology develops. Furthermore, we need to decide what “discount rate” to use when translating potential future climate change damages into present-dollar terms. This is a far cry from a merely “scientific measurement.”

I summarized some of the problems with the Paris Climate Agreement, which adopted as an absolute ceiling that global warming needs to be limited to at most 2 degrees Celsius. Yet even on its own terms, if every participant agreed to its unilateral (and non-enforceable) pledge, then global warming would reach 3.2 degrees. And if we looked at the actual policies that are put in place currently, then we’d expect warming of 3.4 degrees Celsius. (These projections come from the website climateactiontracker.org, which is very much for government interventions to mitigate climate change.)

Next I explained why governments might be reluctant to make aggressive pledges, and furthermore why they wouldn’t even fulfill those pledges: The reason humanity is using conventional fuels is that—currently—they are cheaper and more reliable. It will raise the price of electricity and transportation if governments try to aggressively reduce carbon dioxide emissions. This will anger their populations and so political officials are understandably reluctant to punish their own economies and citizens in the name of a global problem.

We don’t need to force people to switch to alternate energy sources. If and when it makes sense, the market economy will naturally switch over to electric vehicles etc. Look, there wasn’t a “manure tax” to force people to stop using horses and to switch to automobiles. If solar and wind power really make sense, then we don’t need coercion to implement them.

What If I’m Wrong?

In the last segment of my main remarks, I argued that even if it did turn out that climate change was a far more serious problem than I currently believe—and again, I’m relying on orthodox projections from the literature when I say it’s not an “existential threat” to humanity—then there are several ideas that people are currently exploring to “buy us time” to postpone the impacts.

For example, inspired by the 1991 eruption of Mt. Pinatubo (which cooled the globe after spewing ash into the air), researchers are working on the idea of suspending hoses with helium balloons in order to pump sulfur dioxide into the atmosphere, as a way of temporarily reflecting some sunlight back into space. This proposal could completely offset global warming for a total cost of some $250 million—what Al Gore’s foundation is spending merely on “raising awareness” about climate change.

Another idea is to providing iron to a deficient area of the upper ocean in order to generate a “phytoplankton bloom.” If small-scale efforts extrapolate, then large-scale iron fertilization of the ocean could provide another “sink” to absorb CO2 because the phytoplankton rely on photosynthesis. Once filling up with CO2, the phytoplankton would eventually sink to the bottom of the ocean.

The physicist Freeman Dyson has suggested genetically modifying trees so that they absorb more CO2. As quoted in the book Superfreakonomics, Dyson has speculated: “If one quarter of the world’s forests were replanted with carbon-eating varieties of the same species, the forests would be preserved as ecological resources and as habitats for wildlife, and the carbon dioxide in the atmosphere would be reduced by half in about fifty years.

Finally, you can also go to YouTube and search for “direct air capture” to see several videos of different groups who are working on commercially viable systems that suck carbon dioxide directly out of the air.


To be clear, I don’t think any of the above remedies will turn out to be necessary. But my point in bringing them up is to show that the conventional choices are not nearly as dire as the climate alarmists would have the American public believe. It is not the case that “we need to slam the brakes on emissions right now or humanity is doomed.” On the contrary, the market economy will gradually incorporate new technologies and switch to alternative energy sources if and when it makes economic sense. History shows that humanity has grown richer with the development of industry, and I see no reason to doubt that trend will continue. If there are problems, people will adapt—and that simple insight shows how silly some of the more alarmist projections are.

Finally, we need to remind ourselves that proposals to limit emissions today will make us poorer, in order to help future descendants when they will be much richer than we are. Using the most pessimistic estimate of per capita GDP growth from the latest IPCC report, and coupling it with one of the worst estimates of unrestricted climate change damage, then a back-of-the-envelope estimate might say: Without climate change, by the year 2150 would be three times as rich as we are now. But if instead they suffered from 9 degrees Celsius of global warming, then they would only be twice as rich as we are now. So we are being asked to make gasoline and electricity more expensive today, in order to help people in a century-plus who will be in flying cars. This observation doesn’t by itself refute the case for climate change policy activism, but it’s not the way most people are currently thinking about it, is it?

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