Enter the Economists Part III

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Enter the Economists: Part IPart IIPart III
Summary and Discussion at Bishop Hill

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An Amateur Appraisal

So far we have avoided an appraisal of the critique of Chapter 6 that was offered at the time by the Global Commons Institute and other outsiders. We have also avoided an appraisal of the treatment of this critique by the expert authors in the IPCC process. While something should be said of the latter, it is difficult to avoid in such a discussion an evaluation of the economic methodology in question. When faced with the ravings of a ‘crank‘, with (as one interviewee advised) ‘little understanding about economic systems,’ there is only so much polite listening that can be expected of the expert economists called in to do the Assessment. All the more so when political motivation is apparent. Can we dismiss the GCI critique as a silly campaign of misinformation and abuse? Or does it contain something solid that hits hard at the science behind the Assessment? Answers to these questions require economics expertise to which this blog can only aspire. What to do? With a view to reduce misinformed criticism (and notwithstanding many other concerns) this final post on the Price of Life Controversy restricts discussion of economic methodology to the key concerns raised in the controversy at the time, including many noted in the Assessment Report itself. And indeed, if this appraisal is cut down by an expert reader in the comments below, then this posting has not been in vain.

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Protagonists

David Pearce: Co-ordinating lead author of IPCC Working Group III Chapter 6, which assesses estimates of expected climate change damages. His findings support his view that moderate mitigation measures are required. He rejects changes to the Summary for Policy Makers made under pressure from government delegations. And he is especially angered when, in response to concerns about the reliability of the data, the Chapter’s percentage figures for damages at doubling of CO2 (1.5 to 2%) are replaced with the vaguer ‘a few percent.’
Aubrey Meyer: Founding director of the Global Commons Institute (GCI) and instigator of the Price of Life Controversy. His criticism of the economic methodology and the uncertainty in the data behind the conclusions of Chapter 6 are taken up by poor country delegations at the Working Group Plenary and the climate treaty talks. He believes that damages will be much greater than given in Chapter 6, and his critique supports the GCI campaign for the wealthy developed countries (who are mostly doing the damage) to act immediately to stop the warming.

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Jim Bruce, co-chair IPCC Working Group III

Jim Bruce, the co-chair of Working Group III steered the assessment process to its eventual conclusion in Rome by successfully resisting pressure from government delegations to modify the underlying Report while yet achieving inter-governmental agreement on a Summary that did not overly contradict it.

The first thing to say about this controversy is that the integrity of the IPCC process was saved. Chapter 6 was not changed after its final drafting by the expert authors.

As for the Policymaker’s Summary (and the ‘Synthesis’), it does indeed present a critical perspective on the methodology and conclusions of the Chapter. Due to the intervention of the government delegates, the conclusions of the Chapter are couched within strong warnings. The section opens with:

The literature on the subject of this section is controversial and mainly based on research done on developed countries, often extrapolated to developing countries…

This is true and in accord with the Chapter, as are the proceeding warnings about the unreliability of the data. The emphasis these warnings are given only reflect the intergovernmental reception of the Chapter—which is entirely legitimate.

After this opening, the summary of Chapter 6 continues: ‘There is no consensus about how to value statistical lives or how to aggregate statistical lives across countries.’ This is partially misleading. Valuation tables do vary and one cited report (see: this summary) does value all lives at OECD levels. But as for the aggregation of these values across countries through conversion to US dollars, this is only disputed outside the reviewed literature.

Other changes reach beyond the Chapter content and into the plenary debate so as to introduce curious and distracting artifacts like:

…the value of life had meaning beyond monetary considerations

and

…the Rio declaration and Agenda 21 call for human beings to remain at the centre of sustainable development.
(p10)

Perhaps it does and perhaps they do. But it is unclear how these statements even add or change anything. If they are meant to contradict the damages findings then they fail.

Indeed, the Summary does present all the Chapter’s key findings. And, while sometimes, and sometime curiously, it does reach beyond these findings, in doing so it does not directly contradict them. Thus, overall, considering the extraordinary level of disagreement between the authors and a whole bloc of delegations, this is a remarkably successful outcome for the science-to-policy process that is the IPCC—a credit to those, including Jim Bruce, who managed to hold it all together.

The next thing to say is that the authors had good reason for their differential monetary valuation of life. Like it or not, it is in terms of a global currency that government and inter-governmental bodies need to assess damages in order to determine how best to invest their limited resources. The valuation is for assessing the damages of climate change. It does not itself prescribe policy for responding to it. It is descriptive and not prescriptive. But anyway, even if wrongly interpreted prescriptive, it is still not easy to come to Meyer’s dark interpretation—a rationale for the genocide of impoverished nations. Let me explain.

At least with the IPCC, if not before, it was never going to be an all-or-nothing equation about whether we were going to stop global warming immediately in its tracks. Early intervention with ‘no regrets’ and ‘easy wins’ emissions reductions are more precisely identified due to this economic analysis. Moreover, with the twin finding of so many more poor lives under threat and their salvation so cheap, the economics of the Chapter suggests that spending money to save the poor is much more cost-effective than trying to saving the few among the rich. In all, it is hard not to be persuaded by a view common to those on the IPCC side in support of the authors. This is that the Global Commons Institute grabbed the opportunity to expose these ‘sensitive’ calculations, to interpret then crudely, and so to scandalise both the authors and their methodology in order to drum up opposition to the Chapter’s moderate conclusions.

While these two points need to be made in support of the process and the authors, they should not be used to veil some deeper problems with the Chapter, for they lie as though a thin cementing over a pile of sticks and straw. Probe a little deeper and the Chapter’s surface of scientific plausibility collapses into a jumble of chaotically aggregated quantitative data.

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Enter the Economists: The Price of Life and how the IPCC only just survived the other chapter controversy

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Enter the Economists: Part IPart IIPart III
Summary and Discussion at Bishop Hill

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1Apr95Pearce_PriceOfLifeHeadline

What price Climate Change? Before Stern and Garnaut there was Pearce. Chapter 6 of the IPCC Working Group III 2nd Assessment by David Pearce et al is now forgotten, yet it caused the first public controversy in the history of the IPCC. This chaotic assessment of scant and confused costings of expected damages was under attack before it was even drafted. The ensuing scandal over the price of life among the world’s poor dragged the IPCC into an embarrassing political controversy that broke at the very first Conference of Parties to the climate treaty. It was a taste of things to come, with authors simultaneously publishing what they assessed, leaking drafts, and pressure at the intergovernmental Plenary to change the chapter in conformity to a re-write of the Policymaker’s Summary. But there were important differences also. While later in Madrid Ben Santer was entirely complicit in the push to change his Working Group I Chapter 8, David Pearce and his crew held their ground against the onslaught in workshops, plenaries and finally through the press. Indeed, the authors won the battle for scientific independence, but at what price?

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Part 1: An Uncommon Activist

At first I thought I was fighting to save rubber trees,
then I thought I was fighting to save the Amazon rainforest.

Now I realise I am fighting for humanity.
Chico Mendes

Chico Mendes. That man is a good place to start. Or at least, his death. Gunned down in his home out in the wild west, almost as far west as you can go into Brazilian Amazonia.

Barefoot and illiterate, growing up into colonial serfdom, it was all Chico knew since before he was ten years old to be out in the rainforest tapping the rubber trees. But when news of Chico’s death reached a certain violinist in London, it would turn his life around and launched him on a collision course with IPCC Working Group III. The onslaught against the Working Group began in 1993 and continued through the next two years as the co-chairman, Jim Bruce, tried and tried again to get the Second Assessment Report over the line. He nearly didn’t make it.

Protests against the method of costing the damages of climate change in this Report’s Chapter 6—where the death of the world’s poor is valued much less than the death of the rich—turned a large grouping of poor nation delegates against the Report, against the authors, and against the rich nations from whence they came.  A wedge driven deep in the fault line already opening between rich and poor nations at the climate treaty talks, the Price of Life Controversy was orchestrated by one man, our violinist, Aubrey Meyer.

Aubrey Meyer playing the violin in front of a UNFCCC slide

Aubrey Meyer illuminates climate change mitigation with music

This unlikely course of events began back in 1988 when Meyer was seeking a theme for a new musical. He could hardly have missed the reports of Chico’s bloody demise as they came through on the eve of Christmas. At the end of a year when global environmentalism broke into the mainstream as never before, the news was everywhere; for this humble rubber tapper, born a nobody, died famous, world famous.

What began with a determination to preserve the livelihood of the local tappers, by 1985 had converged with the global campaign to preserve the entire Amazon.  Advocating the sustainable development of the forest that sustained them, the united rubber tappers of Brazil formed under Chico’s leadership to become the cause célèbre of the global environmental campaign to preserve not only the Amazon but threatened rainforests everywhere. The rise and demise of Chico Mendes captured the imagination of the entire movement – a martyr to environmentalism immortalised in prose, film and song.

Indeed, this Amazonian tragedy held Aubrey Meyer captive that Christmas, but there never was a Chico Mendes musical. Instead, the tapper’s story sparked the musician’s epiphany, launching his life in an entirely new direction.  Anyone who has ever heard Meyer speak will tell you that the passion for music never left him. But soon Meyer began to discover new talents, acknowledged by friend and foe, as he threw himself into the services of Chico’s cause—a cause that is as much about defending the global environment as it is about defending the rights of the poor.

David Pearce (economist)

David Pearce, the co-coordinating lead author of Chapter 6, died in 2005 aged 63.

When Meyer’s own brand of activism arrived at the climate talks, it was seen to be threatening what others saw as the greater purpose—a general agreement for action on climate change. His aggravation of this rich-poor split seemed to delight parts of the business lobby as much as it frustrated the environmental establishment.  Most of all, Meyer’s intervention exasperated the expert economists drafting Chapter 6. As we shall see, the dispute was never really resolved. When the controversy was over and the Report published, David Pearce, the coordinating lead author, remained insulted and perplexed that their expert assessment could be called into question by the government delegations due to the confused and spurious reasoning of this enthusiastic outsider with his ‘silly campaign of misinformation and abuse.’  In fact, to his dying day, Pearce remained convinced not only that Meyer served the interests of the coal lobby, but that they were funding the whole absurd charade.

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