Dion's Premature Ejaculation...

A good analysis of why Dion's Green Shift misses the mark...

Dr. Nordhaus takes global warming seriously, anticipating that it may well "cast a shadow over the globe for decades, perhaps centuries, to come." When he says centuries, he means centuries. In his highly sophisticated computer analysis of global warming strategies, he includes the option of doing nothing at all for 250 years - and found that it delivered the same result (measured in global emissions of carbon dioxide one century hence) as the Kyoto Protocol with or without the United States.

He includes, as well, a 50-year delay and got an intriguing assessment. Implement the right climate change strategy in 2055 and you still get - by 2105 - precisely the same reduction in CO{-2} that you get with the computer-designed "optimal strategy," a go-slow, go-frugal approach that begins modestly in the next decade and expands incrementally through the rest of the century.

In a brilliant analysis of carbon strategies - The Challenge of Global Warming: Economic Models and Environmental Policy, published last year - Dr. Nordhaus observes that the complexity of global warming rules out absolute certainty of any kind, whether academic or ideological. "Whatever goal we set will probably be incorrect." Given this caution, it is essential to adopt a strategy that can be quickly adapted to changing circumstances and changing technologies, he says.

Dr. Nordhaus notes that a single technological advance in 2050, or in 2100, could render redundant trillions of prematurely invested dollars. This is one of the reasons why the most aggressive climate change strategies - the celebrated Stern Review proposals, the controversial dictums espoused by Al Gore - badly flunk the Nordhaus computer analysis test.

When countries "front-load" investment in carbon reduction, Dr. Nordhaus says, they merely ensure that opportunity costs will rise to unacceptable levels. In his work, for example, British economist Nicholas Stern, for example, requires peak investment (with expenditures of 2.75 per cent of global GDP) by 2012. Mr. Gore requires less investment in the first 20 years, but both merge in 2035 (with expenditures equal to 2.5 per cent of global GDP). Dr. Nordhaus, in contrast, calls for much more gradual increases in expenditures, rising from 0.3 per cent of global GDP in 2010 to 0.5 per cent in 2015 to 0.6 per cent in 2020 and peaking at 0.9 per cent almost 50 years later in 2065.

The Stern-Gore strategies thus tilt decisively to early peak investment - and imply that they would deliver early carbon reductions. In fact, Dr. Nordhaus says, these strategies incur net costs (including opportunity costs) of as much as $22-trillion (U.S.) - significantly more than all the damage that scientists expect global warming will cause in the next 150 years. Stern-Gore, in other words, is worse than doing nothing at all.

Further, Dr. Nordhaus says, front-loaded strategies exempt some countries from participating in a strategy that must be global. Implement Stern or Gore with the participation of 50 per cent of world population, he says, and you incur an extra $2-trillion in economic losses; implement them with only 30 per cent of the world population and you incur an extra $3-trillion.

An optimal strategy, Dr. Nordhaus says, permits no free rides. As well, it answers three questions: How sharply should countries reduce CO{-2}? What should be the time profile of these reductions? How should reductions be distributed?

Liberal Leader Stéphane Dion's Green Shift strategy fully answers none of these questions. It promises to reduce Canada's carbon-related emissions to a defined level (20 per cent below 1990 levels by 2020). It does not hazard a guess at the relevance of this reduction in terms of atmospheric CO{-2}.