Best solution on global warming - do nothing!

Grandiose schemes to fix global warming won't do the trick - a great column from Bjorn Lomborg.

One commonly repeated argument for doing something about climate change sounds compelling, but turns out to be almost fraudulent. It is based on comparing the cost of action with the cost of inaction, and almost every major politician in the world uses it.

The president of the European commission, José Manuel Barroso, for example, used this argument when he presented the European Union's proposal to tackle climate change earlier this year. The EU promised to cut its carbon emissions by 20% by 2020, at a cost that the commission's own estimates put at about 0.5% of GDP, or roughly €60bn per year. This is obviously a hefty price tag – at least a 50% increase in the total cost of the EU – and it will likely be much higher (the commission has previously estimated the cost to be double its current estimate).

But Barroso's punchline was that "the cost is low compared to the high price of inaction". In fact, he forecasted that the price of doing nothing "could even approach 20% of GDP". (Never mind that this cost estimate is probably wildly overestimated – most models show about 3% damages.)

So there you have it. Of course, politicians should be willing to spend 0.5% of GDP to avoid a 20% cost of GDP. This sounds eminently sensible – until you realise that Barroso is comparing two entirely different issues.

The 0.5%-of-GDP expense will reduce emissions ever so slightly (if everyone in the EU actually fulfills their requirements for the rest of the century, global emissions will fall by about 4%). This would reduce the temperature increase expected by the end of the century by just five-hundredths of a degree Celsius. Thus, the EU's immensely ambitious programme will not stop or even significantly impact global warming.

In other words, if Barroso fears costs of 20% of GDP in the year 2100, the 0.5% payment every year of this century will do virtually nothing to change that cost. We would still have to pay by the end of the century, only now we would also have made ourselves poorer in the 90 years preceding it.