Samuelson: The Dilemma of Global Warming vs. Economic Growth - Newsweek Robert Samuelson - MSNBC.com

Scare stories about global warming may end up justifying policies that hurt the economy without much curbing of greenhouse gases.

Nov. 13, 2006 issue - It seems impossible to have an honest conversation about global warming. I say this after diligently perusing the British government's huge report released last week by Sir Nicholas Stern, former chief economist of the World Bank and now a high civil servant. The report is a masterpiece of misleading public relations.

It foresees dire consequences if global warming isn't curbed: a worldwide depression (with a drop in output up to 20 percent) and flooding of many coastal cities. Meanwhile, the costs of minimizing these awful outcomes are small: only 1 percent of world economic output in 2050.
No sane person could fail to conclude that we should conquer global warming instantly, if not sooner. Who could disagree? Well, me. Stern's headlined conclusions are intellectual fictions. They're essentially fabrications to justify an aggressive anti-global-warming agenda. The danger of that is we'd end up with the worst of both worlds: a program that harms the economy without much cutting of greenhouse gases.
Let me throw some messy realities onto Stern's tidy picture. In the global-warming debate, there's a big gap between public rhetoric (which verges on hysteria) and public behavior (which indicates indifference). People say they're worried but don't act that way. Greenhouse emissions continue to rise despite many earnest pledges to control them. Just last week, the United Nations reported that of the 41 countries it monitors (not including most developing nations), 34 had increased greenhouse emissions from 2000 to 2004. These include most countries committed to reducing emissions under the Kyoto Protocol.
Why is this? Here are three reasons.
First: With today's technologies, we don't know how to cut greenhouse gases in politically and economically acceptable ways. The world's 1,700 or so coal-fired power plants—big emitters of carbon dioxide, the main greenhouse gas—are a cheap source of electricity. The wholesale cost is 4 to 5 cents a kilowatt hour, says the World Resources Institute. By contrast, solar power is five to six times that. Although wind is roughly competitive, it can be used only in selective spots. It now supplies less than 1 percent of global electricity. Nuclear energy is cost-competitive but is stymied by other concerns (safety, proliferation hazards, spent fuel).