{"id":328321,"date":"2024-05-12T13:51:37","date_gmt":"2024-05-12T11:51:37","guid":{"rendered":"https:\/\/climatescience.press\/?p=328321"},"modified":"2024-05-12T13:51:40","modified_gmt":"2024-05-12T11:51:40","slug":"bogus-math-for-climate-reparations","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=328321","title":{"rendered":"Bogus Math for Climate \u201cReparations\u201d"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From Science Matters <\/a><\/p>\n\n\n\n

\u00a0By\u00a0Ron Clutz<\/a><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Paul Mueller does the analysis in his AIER article Climate \u201cReparations\u201d Numbers Are Rigged. <\/strong><\/a> Excerpts in italics with my bolds and added images.<\/p>\n\n\n\n

Nobel Prize\u2013winning economist Esther Duflo thinks<\/strong> rich countries should pay poor countries<\/a> $500 billion in compensation each year for climate-change damages<\/strong>. It is our \u201cmoral debt<\/a>.\u201d She proposes an international 2-percent wealth tax<\/a> on the ultra-rich and an increase in the global minimum corporate tax rate to fund this $500 billion transfer.<\/em><\/p>\n\n\n\n

You and I may be shocked by such a suggestion but don\u2019t worry: \u201cIt\u2019s really necessary. And it\u2019s reasonable. It\u2019s not that hard.\u201d Only someone in an elite, progressive bubble could say something like that.<\/strong> Let\u2019s check her reasoning.<\/em><\/p>\n\n\n\n

Duflo claims that climate change creates costs, specifically through \u201cexcess\u201d deaths due to excessive heat.<\/strong>\u00a0Poorer countries from the global south near the equator will see more days of extreme heat, and so will see a disproportionate increase in excess deaths.<\/em><\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

Other economists<\/a> translated those deaths into an externality cost of $37 per ton<\/a> of CO2.<\/strong> Multiply that by the roughly fourteen billion tons of CO2<\/sub> emitted by the US and Europe and voila, wealthy countries generate $500 billion in externality costs per year.<\/strong><\/em><\/p>\n\n\n\n

She proposes paying for this by increasing the global minimum corporate tax rate from 15 percent to 18 percent and introducing an international 2-percent wealth tax on the ultra-rich, which she defines as the 3000 richest billionaires. We can\u2019t go into the many problems<\/a> and obstacles<\/a> to such funding mechanisms<\/a> here \u2014 suffice it to say such ideas<\/a> will be nearly impossible to implement.<\/strong><\/em><\/p>\n\n\n\n

But Duflo\u2019s back-of-the-envelope calculations, besides missing the bigger picture<\/a>, are so speculative as to require playing make-believe. Let\u2019s play along for a moment to see why. We\u2019ll start by reverse-engineering her $500 billion number into a measure of harm.<\/strong><\/em><\/p>\n\n\n\n

Regulatory agencies and insurance companies use the concepts of \u201cstatistical value of life\u201d<\/strong> or the \u201cstatistical value of a life-year\u201d to do cost-benefit analysis on risk<\/strong> and the monetary value of life. These concepts are slippery<\/a>, however, and calculated in a variety of ways<\/a> with a wide range of estimates.<\/em><\/p>\n\n\n\n

To keep things simple, let\u2019s assume that the value of one life-year is $200,000<\/a>.<\/strong> The $500 billion<\/strong> number proposed by Duflo suggests that the cost imposed by wealthy countries burning fossil fuels is the loss of roughly 2.5 million life-year\u201d in poor countries per year.  <\/strong>That sounds like a staggering number!<\/strong><\/em><\/p>\n\n\n\n

But what about the benefits that have accrued to developing
countries from activities that generate CO2<\/sub>\u00a0emissions?<\/mark><\/strong><\/em><\/p>\n\n\n\n

Important advances<\/strong> in medicine, such as antibiotics and vaccines, were developed in modern industrialized countries<\/strong>. So, too, were refrigeration, cars, the internet, smart phones, radar; modern agricultural methods with herbicides, pesticides, and fertilizers; improvements in plumbing, building materials, manufacturing, and much more. \u201cPolluting\u201d activities in industrialized countries improved nutrition and safety around the world. These advances, and many others, significantly increased people\u2019s life expectancies<\/a> \u2014 especially in poor countries<\/a>.<\/strong><\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Surely the value of these improvements should weight the opposite side of the scale<\/strong> from the expected harm of climate change \u2014 especially since the crusade against fossil fuels<\/a> and carbon emissions will assuredly slow economic growth and innovation. Let\u2019s consider the case of India<\/strong> for a moment.<\/em><\/p>\n\n\n\n

Life expectancy<\/a> in India has basically doubled from about 35 years in 1950 to about 70 years in 2024<\/strong>. If you consider that India has just over a billion people living in it, modern technology developed by rich CO2<\/sub>-emitting countries has added 35 billion life-years in India alone. <\/strong><\/em><\/p>\n\n\n\n

Translating life-years back into dollars, 35 billion life-years times $200,000 per life-year means that the\u00a0benefits from greater life expectancy in India over the past 75 years<\/strong>\u00a0is the equivalent of $7 quadrillion dollars \u2014 or in annualized terms,\u00a0an\u00a0annual\u00a0benefit of about $93 trillion dollars.<\/strong>\u00a0In other words, the benefits to\u00a0India alone<\/strong>\u00a0are over\u00a0a hundred times larger than Duflo\u2019s estimate of costs!<\/strong><\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Nor is India cherry-picked. China has a similar story<\/strong> with life expectancy rising<\/a> from 43.45 years to 77.64<\/strong> years. Similar improvements in life expectancy occur across the global south.<\/strong><\/em><\/p>\n\n\n\n

Of course, one could argue that developed industrial countries are not solely responsible<\/strong> for<\/strong> increases in life expectancy<\/strong> around the world. But one could just as easily say the same about whether developed industrial countries are solely responsible for global CO2<\/sub> emissions, climate change, or harm to people<\/strong> in the global south due to hotter weather. Connecting these two issues makes perfect philosophical sense, because the production of CO2<\/sub> has historically been directly associated<\/a><\/strong> with increases in economic growth<\/a>; which in turn is necessary for all the developments increasing longevity<\/a> around the world.<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Even if we massage the assumptions in Duflo\u2019s favor,<\/strong> the results remain favorable to industrialization. Suppose western<\/strong> technology and industrial activities contribute 50 percent to improvements in life expectancy<\/strong>. That\u2019s still a $46 trillion annualized benefit to India. Reduce the value of a statistical life-year to $100,000<\/strong> \u2014 that\u2019s still a $23 trillion\/year benefit from industrialization in the west. Exclude India<\/strong> from the analysis and cut the population we focus on down to 500 million people \u2014 that\u2019s still over $12 trillion\/year in benefits. Reduce the improvement in life-expectancy by six years<\/strong> \u2014 that still leaves about $10 trillion\/year in benefits.<\/em><\/p>\n\n\n\n

So, even after making tons of assumptions to reduce their size,
the estimated benefits of industrialization are still about twenty
times larger than Duflo\u2019s estimate of its costs.\u00a0<\/mark><\/strong><\/em><\/p>\n\n\n\n

Worrying about hypothetical, indirect costs of CO2<\/sub> emissions when it comes to human well-being is like scrounging for pennies while ignoring $100 bills<\/strong> lying on the sidewalk. Actually, it is worse than that. It is like lighting $100 bills on fire to help you search a dark alley for some pocket change of human welfare.<\/em><\/p>\n\n\n\n

Economic development, driven largely by Adam Smith\u2019s dictum \u201cpeace, easy taxes, and a tolerable administration of justice<\/a>\u201d<\/strong>\u00a0which includes strong private property rights and limited government intervention, has improved human living standards in unprecedented ways over the past 300 years. These\u00a0remarkable improvements in human welfare<\/strong>\u00a0are not limited to wealthy, developed economies but are enjoyed around the world.\u00a0<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Duflo talks about the (external) costs<\/strong> of industrialization on certain countries without considering the truly massive (external) benefits<\/strong> of industrialization to those same countries.<\/em><\/p>\n\n\n\n

If anything, with a proper accounting, developing countries owe rich countries gratitude<\/strong>\u00a0for the benefits they have received from industrialization and the corresponding CO2<\/sub>\u00a0emissions.<\/em><\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Nobel Prize\u2013winning economist Esther Duflo thinks rich countries should pay poor countries $500 billion in compensation each year for climate-change damages. It is our \u201cmoral debt.\u201d She proposes an international 2-percent wealth tax on the ultra-rich and an increase in the global minimum corporate tax rate to fund this $500 billion transfer.<\/p>\n","protected":false},"author":121246920,"featured_media":328334,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691818056,691824721,691818076,691828589],"class_list":["post-328321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-climate-change","tag-climate-reparations","tag-co2","tag-crusade-against-fossil-fuels","fallback-thumbnail"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/05\/0climate-reparations-cop27.webp?fit=1600%2C1067&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1npv","jetpack-related-posts":[{"id":242032,"url":"https:\/\/climatescience.press\/?p=242032","url_meta":{"origin":328321,"position":0},"title":"Climate Reparations a Lose-Lose-Lose Deal","author":"uwe.roland.gross","date":"01\/28\/2023","format":false,"excerpt":"At the recently concluded UN climate summit, wealthy nations agreed to pay climate reparations to poor countries. 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