Climate change - for the sceptics

Green Tax Shift There are a number of arguments against reducing CO2 emissions still floating around. They are all based on some kind of misunderstanding. A focus on scientific uncertainty ignores the economic reality and the principles of risk management which are fundamental to sound economic management. A focus on China and other poor countries ignores the reality that they will never match our level of per capita CO2 emissions and that they are already investing more in renewable energy than we are. Criticisms of Kyoto ignore the fact that it is merely a first step, not a final solution and that attempting to create our own version is a step backwards.

Scientific Uncertainty

Many self proclaimed global warming skeptics point to uncertainties in the science as a reason for inaction on climate change. This is an irrational argument that they would never use in managing personal risk.

Whether to reduce greenhouse emissions is not a scientific question, it is a risk management question. Science is interested in the truth and can afford to wait forever for it. Risk management is about human welfare and must consider the cost of wasted time.

To put it simply, if a risk is cheap to avoid but very expensive to fix after the fact, or if taking preventive action now is far cheaper than in the future, then it makes sense to act now, even if the likelihood of the risk eventuating is slim. That is why people take out insurance. However, while insurance is close to being neutral in terms of risk and cost (some of your premiums go to profits and administration and not all to payouts), reducing greenhouse emissions is a very positive risk management option.

The cost of significantly reducing our emissions is far less than the well known costs of climate change in the short term. The long term costs of climate change could be astronomical and irreversible. We are increasing the concentration of CO2 in the atmosphere to unprecedented levels and scientists cannot predict how bad it will get or when we will reach some kind of tipping point where we loose any control over the climate as it rapidly changes.

Even if we ignore the unknown long term costs and focus on short term (over a few decades) costs, the economics would justify preventive measures even if the certainty over anthropogenic (human caused) climate change were extremely small – well under 10%. In fact, most scientists put it at roughly 95% certainty that humans are causing climate change.

This is why John Howard’s approach to climate change represents bad economic management. To use a racing analogy, he has failed to back a horse with a 95% chance of winning even though a small gamble would give a huge payoff if the horse won. A small investment (cost) in reducing our emissions will most likely result in a huge payoff in avoided costs in the future. A small saving (not investing in reduced emissions) will likely result in a huge future cost. He should have backed the better horse a decade ago. The longer we wait, the more it will cost to bring our emissions down.

Running a country or a business is not a scientific process. You only get one shot. You cannot destroy thousands of them in a learning process until you get a thorough understanding of how they work. You have to get it right the first time. This means that you cannot avoid making up your mind and making a tough decision until all the facts come in. Such an approach is a good way of building a career in science, but is disastrous in management.

China is putting us to shame

Another favourite coalition ploy is to point the finger at developing countries and the risk they pose. John Howard will often highlight how much China as a country is emitting and is going to emit, but he will never acknowledge the per capita emissions. Australia is the highest per capita emitter of greenhouse gasses in the world. China is never going to reach our level of emissions. It is simply not possible for them to do so – fossil fuel reserves will run out long before. Yet he still expects the Chinese people to make more sacrifices than we do. John Howard is asking a group of people who will always emit less CO2 than we do now and who have less capacity to reduce their emissions to make more sacrifices than we are prepared to. His argument only makes sense if he believes that keeping the Chinese people dirt poor so that we can continue to waste vast amounts of coal and petrol is a reasonable way to control global emissions.

Howard’s argument is also based on a logical fallacy. Any region in China (or any region in the world) with the same population as Australia could just as easily draw a circle around itself and claim that there is no point reducing their emissions because their impact would be swamped by the total global emissions. Their emissions would be far less than those of Australia and their claim far more legitimate. It’s the same as an individual saying that their emissions are only a minute fraction of the global emissions, so they might as well continue wasting electricity and driving a gas guzzler. John Howard has been asking the Australian people to make personal changes to reduce emissions while at the same time claiming that because Australia is only a small fish in a big pond, there is no point in the government doing anything. His stance is riddled with hypocrisy and flies in the face of common sense.

Despite emitting far less CO2 per person, China is investing far more per person in renewable energies like wind. The problem is not that China needs to tow the line, the problem is that Australia is not matching China’s commitment to reduce emissions. China is putting us to shame, not the other way round. While the Prime Minister is busy pointing his finger at China, China is using our recalcitrance as an excuse to slow down their rapid pace of improvement. They are completely justified in doing so.


John Howard complains that ratifying Kyoto is a symbolic gesture and won’t reduce our emissions. This has been true in the past, but is no longer true. Australia only met its target by ending land clearing. Under coalition policy, our emissions would start rising even more rapidly and increase by 27% by 2020. Furthermore, even if Kyoto were a purely symbolic gesture, it would still have incredible power. Ratifying would isolate the US as the only developed country that hasn’t ratified and make it almost impossible for George Bush to refuse. Ratification by the US and Australia would allow the entire developed world to put more pressure on China and other developing countries without appearing to be hypocrites.

People often point out the flaws in Kyoto. However, one of the biggest flaws was that Australia was given a special deal that allowed it to continue ramping up it’s industrial emissions. Any problems with the original agreement can be corrected far easier than creating a new system from scratch. John Howard and George Bush have been attempting to do this, yet the system they propose for replacing Kyoto is far worse – it makes reducing emissions voluntary. This would allow Howard to continue arguing that we are only a small country so we might as well do nothing. Anyone with even a basic understanding of human nature will understand that purely voluntary measures will not achieve the changes that are necessary.

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