Global warming: don’t worry, be happy

I was reading a paper for my Economics and Law class, and it cited this statistic from a 2000 paper by economist William Nordhaus:

Damages of a 2.5 C Degree Warming As a Percentage of GDP,

India 4.93

Africa 3.91

OECD Europe 2.83

High income OPEC 1.95

Eastern Europe 0.71

Japan 0.50

United States 0.45

China 0.22

Russia -0.65

In other words, India will be 5% worse off GDP-wise than it would be otherwise because of climate change.

The Intergovernmental Panel for Climate Change presented a ballpark of 1.8C to 4.0C for average climate change difference by 2100, so 2.5C is a reasonable, maybe slightly low, estimate of climate change in this century.

I’ll consider some math for India. Estimate a 4.5 percent annual GDP growth in India for the next 93 years, fairly conservative given current 9% growth rates and 2.5% growth for developed non-welfare states like the US.

India’s current GDP is $3,800 per capita. 1.045 ^ 93 = 60.0, so, by 2100 India will have 60 times higher per capita GDP than it does now, that is $228,000. Knock five percent off and we’re down to a paltry $217,000.

Worrying about global warming, then, seems a bit like rearranging the deck chairs on the Queen Elizabeth II. In 2100, we’ll be on a luxury liner whatever the seating arrangements, given reasonable growth rates.

And if we do want to rearrange those chairs, there are a lot simpler, more difficult to screw up ways to do it than to fight global warming.

Math again: a 5 percent reduction of India’s 2100 GDP is equivalent to a 0.0555% decrease in her growth rate over the intervening time period (1.05 = 1.000555^93).

So, how do we boost India’s growth rate by .0555%?

India has a 14.4 percent average tariff rate, according to the 2007 Index of Economic Freedom. Berkeley economist Brad DeLong estimated the roughly 50 percent tariff on capital goods in the US after the Civil War reduced economic growth from 0.14% to 0.36% annually. Apply those figures to India today, and its 14.4% tariff, if continued over the next 93 years, would reduce growth by 0.0403% to 0.103%, so about the same as global warming.

Oddly though, eliminating Indian tariff barriers has not turned into the next cause celebre.

(The paper, with data, is “Climate Change Justice” by Eric Posner and Cass Sunstein (working paper), http://www.law.uchicago.edu/Lawecon/)

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link?

Is there a link to the paper itself? The link at the end only goes to a general webpage.
How do you know when to account for the 5%? Why only in 2100? Won't there be damage to the GDP in say, 2050, with the partial rise in temperatures?
Also, did the authors account for the GDP loss from potential measures to reduce global warming?