Global Warming: A Science and Economics Update

Published February 7, 2007

Greetings from Chicago, hog butcher for the world, city of big shoulders, and if you believe everything you read in the newspapers, home of the next President of the United States, Senator Barack Obama.

Of course, you can’t always believe the media, which brings me to my topic today: global warming.

Everywhere you look there are headlines about the coming global warming crisis. The latest news hook was a report from the United Nations claiming that “most of the observed increase in globally average temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations.”

(Most of the so-called “news” stories about this report didn’t explain that what was released wasn’t a new “study” that increases our knowledge of global warming, but just a political document written by U.N. bureaucrats–not real scientists–and edited behind closed doors, not subject to peer review, and it was just an executive summary of one part of a three-part study that won’t even be released for another three months. Obviously, this is not how real science is conducted or released.)

No less an authority on climate science than newspaper columnist Ellen Goodman says “global warming deniers are now on a par with Holocaust deniers.” Another famous scientist, former Vice President Al Gore, recently became the first star of a propaganda film to get nominated for a Nobel Prize for claiming we’re all going to drown unless global warming is stopped.

The media, of course, eats this up. Last April, the cover of Time magazine declared, “Be worried, be very worried.” Amid lots of scarey pictures of deserts, floods, and hurricanes, it said “Global warming is already disrupting the biological world, pushing many species to the brink of extinction and turning others into runaway pests. But the worst is yet to come.”

But should we trust Time magazine? On July 24, 1974, Time magazine published an article titled “Another Ice Age?” that read,

… the atmosphere has been growing gradually cooler for the past three decades. The trend shows no indication of reversing. Climatological Cassandras are becoming increasingly apprehensive, for the weather aberrations they are studying may be the harbinger of another ice age.

It’s not just Time magazine that’s unreliable on global warming. The popular press features possible crises on their front pages all the time because bad news sells, and they are in the business of selling copies of their publications and generating ad revenue, not reporting the truth about complicated subjects. As they say in the business, “if it bleeds, it leads.”

These are the same guys who told us Alar, saccharin, Red Dye #2, dioxin, a hole in the ozone layer, electric power lines, and cell phones were all causing cancer epidemics, and that Y2K would shut down the nation’s electric grid and banks.

They were wrong on every one of these issues. Cancer rates in the U.S. for the nonelderly population have been falling since 1970, and more recently for the total population including the elderly, and more recently still, even the absolute number of cancer deaths is now falling. Somehow, the false predictions always appear in banner headlines on page one but the retractions appear on page 37, next to ads for septic tank pumps.

The major media will wake up eventually, and in 2010 or 2020 they will be once again be trying to sell newspapers and magazines by predicting global cooling. But the point is, nobody should trust the mainstream media to tell us what’s going on in the global warming debate.

The most important thing to understand about global warming is that there is a lot of disagreement in the scientific community about what’s going on. An international survey of climate scientists conducted in 2003 by German environmental scientists Dennis Bray and Hans von Storch found:

  • most scientists don’t believe scientific knowledge is sufficient to predict future climate;
  • most don’t believe computer models “accurately verify climate conditions”;
  • most believe global warming would have some positive as well as negative effects;
  • most believe the science is too unsettled to form a basis for public policy.

An even more recent survey, conducted in 2006, of members of the National Registry of Environmental Professionals found:

  • 34 percent of environmental scientists and practitioners disagree that global warming is a serious problem facing the planet.;
  • 41 percent disagree that the planet’s recent warmth “can be, in large part, attributed to human activity”;
  • 71 percent disagree that recent hurricane activity is significantly attributable to human activity;
  • 33 percent disagree that the U.S. government is not doing enough to address global warming; and
  • 47 percent disagree that international agreements such as the Kyoto Protocol provide a solid framework for combating global climate change.

Despite all this disagreement, there is consensus on a few points, but these points lead to a conclusion very different from what the media claims. There is consensus that:

  • There has been a modest warming of about 1 degree Fahrenheit in the last century. During that time, human civilization, food production, and wildlife have flourished. Whatever harms this warming may have caused were overwhelmed by the benefits.
  • Natural variability could explain some, all, or none of this warming. We don’t know because temperatures historically have sometimes increased without rising levels of CO2–the greenhouse gas that global warming alarmists most often blame for causing global warming–and temperatures historically have sometimes not increased during periods when CO2 levels were rising. We know that variation in solar energy, clouds, and ocean currents all play bigger roles in affecting climate than does CO2. After decades of scientific research costing tens of billions of dollars, most scientists are still not convinced that we can even measure the effects of a tiny increase in the amount of a gas that probably plays a small role in natural global climate cycles, much less blame most or all of the recent warming trend on human greenhouse gas emissions.
  • There is consensus, generally unreported by the media, that if warming continues at its past rate, the results would be more beneficial than harmful for plants, animals, and human civilization. Warmer weather is good for human health–it’s why most people move south rather than north when they retire, and why morbidity and mortality rates are lower in warmer climates–and wildlife and plant life, too. And because most of the warming occurs at night, during the winter, and at higher latitudes, it means longer growing seasons and less stress on plants and all types of wildlife. Robert Mendelsohn, a distinguished professor at Yale University, estimates a 2.5 degree Celsius warming by the year 2060–which is more than what even most alarmists predict–would generate a net benefit of $8.4 billion a year for the U.S. That’s net of any possible harms caused by rising sea levels or other possible negative effects from even serious warming.
  • There is consensus, finally, that the computer models relied on by global warming alarmists are unreliable. Most of the models assume a rate of population growth that is twice what demographic experts forecast, and they assume global per-capita CO2 rates will double by 2050 … even though that rate was flat–no increase at all–between 1970 and 1999. Change these assumptions and, voila!, the predicted warming trend disappears. It’s a classic example of “garbage in, garbage out.” If you enter the wrong data into a computer model, no matter how sophisticated it is or how big the computer is that is running it, you’re bound to get garbage out.

All of which is to say that global warming is likely to be a much smaller deal than the media and some politicians have been making it out to be.

But this doesn’t mean legislation won’t be passed or schemes cooked up in the name of “doing something about global warming” that would have a very big effect on consumers, taxpayers, and (of particular interest to the folks assembled here today) farmers and ranchers.

Nebraska and approximately 30 other states have already passed legislation in the name of “doing something” about global warming; the federal government is spending billions of dollars a year in taxpayers dollars on it already; the new Democratic majority in Congress wants to pass more laws that would dramatically increase that level of spending; and the Chicago Climate Exchange and other private-sector players are trying to sell “carbon credits” to farmers and others in the expectation that mandatory caps on greenhouse gas emissions are in the offing.

The fatal flaw of all these schemes is their cost. They would require spending hundreds of billions of dollars a year–trillions of dollars during the coming decades–to reduce emissions by amounts too small to have a measurable effect on global temperatures. For example, the best estimate of the cost of the Kyoto Protocol–which would have required the U.S. to reduce its greenhouse gas emissions to 7 percent below 1990 levels by 2010, is $375 billion in lost gross domestic product every year.

It would destroy 2.4 million jobs–jobs in manufacturing and agriculture that would go to China, India, and the other 177 of the world’s 210 countries that aren’t subject to the Kyoto Protocol … or to the majority of European countries that have signed the Kyoto Protocol but already are failing to stay inside its caps. (I don’t know if you knew this, but the Kyoto Protocol has no enforcement mechanism … none at all.)

(Also by the way, the 179 countries that are not bound to the terms of the Kyoto Protocol account for 76 percent of the world’s CO2 emissions and 90 percent of the world’s population. It’s not a global solution to a global problem.)

Implementation of the Kyoto Protocol would cost the average household in the U.S. about $3,400 a year in lost income and higher prices for consumer goods. Please think about that: $3,400 a year, about $300 a month. How many households could afford this? It’s more than the average family spends on food and clothing combined.

All this pain, for what? Most of the reduction in emissions in the U.S. would be offset by higher emissions in third world countries, the ones that would be manufacturing the goods and producing the food that would no longer be produced in the U.S. due to the cost of regulations and energy taxes. And because CO2, once released, remains in the atmosphere for up to 100 years, reductions in emissions in any one year have a minuscule effect on concentrations in the atmosphere.

To have any impact on the global climate, emission reductions would have to be global–not just by a few developed countries–and they would have to be steep–about 70 percent to 80 percent of current emissions. This isn’t just economically impossible, it’s technologically impossible. Why take “a first step” (as many climate alarmists call the Kyoto Protocol) if the necessary next steps are impossible?

So what stake do farmers and ranchers have in the global warming debate? You’re not electric utilities and you’re not manufacturers. Through low-till or no-till farming, you can even sequester more carbon in your soil, and maybe get paid to do so by the Chicago Climate Exchange or a government program. Maybe farmers could even benefit from the global warming scare, even if it is phony and likely to hurt everyone else.

Or not.

A few years ago, I conducted research on the effects of global warming legislation on America’s farm community. I was lucky to work with some real experts, including Dr. Jay Lehr, Heartland’s science director and editor of McGraw-Hill’s Standard Handbook on Environmental Science, Health and Technology and the new 6-volume Water Encyclopedia; Terry Francl and John Skorburg, at the time both agricultural economists with the American Farm Bureau Federation; Dennis and Alex Avery, an economist and a biologist, respectively, with the Hudson Institute’s Center for Global Food Issues; and James L. Johnston, an energy economist recently retired from Amoco.

Together we produced two studies: “State Greenhouse Gas Programs: An Economic and Scientific Analysis” (February 2003) and “Greenhouse Gas Control: Implications for Agriculture” (August 2003). These studies arrived at three conclusions of particular interest to this audience:

  • First, farmers are likely to end up paying more for emission permits than they are likely to earn selling credits for sequestering carbon in their soil and crops. The reason is farmers emit much more greenhouse gases than they now sequester or can reasonably expect to sequester in the future.

According to EPA, agricultural soils in the U.S. in 2001 sequestered 15.2 million metric tons of carbon dioxide equivalent, compared to total agricultural emissions of 526 mmtCO2e. Emissions were 35 times as great as sequestration. (Farm emissions come primarily from methane from livestock and nitrous oxide from fertilizer application.)

If farmers want to be paid to store carbon, they had better expect to be charged for emitting carbon. The salesmen from the Chicago Climate Exchange aren’t warning you that they’ll be back in a few years selling you permits, but you can bet that they will be.

  • Second, higher prices for fossil fuels would more than offset whatever amounts farmers are paid to sequester carbon. All of the leading environmental advocacy groups calling for action on global warming support caps on emissions or raising energy taxes to reduce the use of fossil fuels. Both would have the effect of raising energy prices. A market for carbon credits can only exist if emissions are capped or if there are new taxes imposed on carbon emissions. Otherwise the credits are worthless.

Most economists believe a tax equivalent to $0.50 a gallon on gasoline would be required to achieve the Kyoto Protocol’s goal of cutting U.S. emissions to 7 percent below 1990 levels by the year 2010. My colleagues and I estimated the impact of such a tax on the cost of agricultural inputs–fuels and electricity, pesticides and other chemicals, fertilizer, and customer operations and hauling–and then calculated the per-acre increased cost to farmers. For wheat it came to $16 per acre; for soybeans, $19 per acre; for corn, $45 per acre; and for cotton, $64 per acre.

This means that while the government or the CCX is paying you a dollar or two per acre to sequester carbon, the businesses that sell you electricity, diesel fuel, heating oil, fertilizer, and that haul your product to market will be taking even more money out of your other pocket–at the rate of between $16 and $64 per acre.

We also calculated the effect of these cost increases on your bottom line. Assuming that farmers lack the market power to pass those higher costs along to consumers by raising prices, we found soybean growers would lose 15 percent of their net profit, wheat growers would lose 22 percent, corn growers, 29 percent, and cotton growers, 45 percent.

  • Third and finally, we found that carbon sequestration can play a role in responding to the possible problem of climate change, but probably not by paying farmers in the U.S. Farmers in the U.S. capture only one-twentieth of 1 percent of total annual U.S. greenhouse gas emissions, according to EPA, or 1 percent according to the USDA. Even using USDA’s estimate, we would have to increase carbon sequestration by 100 percent just to sequester 2 percent of total emissions, or by 1,000 percent to sequester 10 percent of total emissions. Do you think we can do that? From 1990 to 2001, carbon sequestration in agricultural soils rose by only 14 percent.

The real promise for carbon sequestration lies in forestry and in developing countries. According to EPA, forests in the U.S. sequestered 759 million metric tons of carbon dioxide equivalent in 2001, 50 times as much as agricultural soils. An acre of forest can have 30 times the biomass of an acre of marginal farmland.

But subsidizing tree planting in the U.S. would reduce U.S. farm exports and prompt more farm output in countries where there are no artificial constrains on farming. This would lead to more clearing of forests in third world countries, where deforestation is already a major problem. On a global scale, replacing corn fields in the U.S. with tree farms would mean more, not less, carbon would be released into the atmosphere.

So by the process of elimination, we’re left with only one really good idea for fighting global warming with sequestration: subsidizing the end of deforestation and planting more trees in third world countries. Deforestation in third world countries currently accounts for emissions equal to three-fourths of the entire emission reduction called for by the Kyoto Protocol. If we could stop it, we’d be three-quarters of the way home without reducing our own emissions by a single metric ton.

In conclusion, I urge you all not to get on the global warming bandwagon. The science just isn’t there and grows less convincing by the week. Farmers are likely to pay more–in credits for their own emissions and in higher energy costs–than they stand to earn from selling carbon credits. And to the extent that sequestration has a role to play in combating the possible problem of global warming, the best place to do it isn’t in the U.S., but in developing countries, and not in planting corn, wheat, or soybeans, but in planting trees.

Thank you for this opportunity to talk to you today.

Joseph Bast is president of The Heartland Institute and coauthor of Eco-Sanity: A Common-Sense Guide to Environmentalism (1994, 1996) and other books. The studies referenced in these remarks are available on The Heartland Institute’s Web site at Parts of this presentation are based on testimony delivered to the Clean Air, Climate Change, and Nuclear Safety Committee of the U.S. Senate on July 8, 2003, and to the Environment Committee of the Iowa House of Representatives on February 9, 2004.