Dear Superfreakonomics Critics: Time Is Money in the Climate Debate Too

One of the ugliest battles in the blogosphere climate wars has involved the newly released Superfreakonomics, sequel to the best-selling Freakonomics. In the new book’s final chapter (available here in pdf), economist Steven Levitt and journalist Stephen Dubner set out to challenge the view that massively restricting carbon emissions is the only hope for averting planetwide catastrophe.

In this post I will link to some of the major commentary on the book so far, and then focus on U.C. Berkeley economist Brad DeLong’s specific claims that Levitt and Dubner’s arguments in support of geoengineering are somehow “bad economics.” As we’ll see, Levitt and Dubner might be wrong, but if so they are wrong because of the numbers. DeLong is painting their views as self-evidently absurd, but that’s only because he himself is overlooking a basic economic point.

The Background

Not surprisingly, the climate scientists and economists who are most vocal about the need for drastic emissions cutbacks were furious when the book’s contents began circulating. Joe Romm got the ball rolling with this fiery post; his ally in such matters, Paul Krugman, soon followed suit. Dubner defended himself and co-author Levitt against Romm’s accusations of intentional distortion in this post, and one of the primary sources for the chapter, physicist (and all-around guru) Nathan Myhrvold, defended himself from Romm’s accusations of ignorance here.

In the present post, I don’t want to take sides in the charges of intellectual dishonesty. The interested reader can explore both sides from the links above. The problem with a book like Superfreakonomics–and I said as much of their first book in this review–is that Levitt and Dubner try to (a) synthesize a huge amount of information to challenge the conventional wisdom on some point, be it parental influence on children’s success, the effects of abortion on crime rates, or the feasibility of geoengineering; and (b) write in a snappy, cutesy way that doesn’t tax the average reader’s attention span.

The result is pretty predictable: If the reader agrees with the unorthodox view that Levitt and Dubner are pushing, then their analysis seems wonderful (if incomplete). On the other hand, if the reader happens to endorse the “conventional wisdom” that is subject to their irreverent attack, then Levitt and Dubner will come off as sloppy amateurs, dabbling in an area better left to true experts.

So when it comes to the issue of climate alarmism, I would simply caution fans of limited government to tread lightly in their support for our bestselling authors: Let’s not forget how Levitt dealt with John Lott and his arguments against gun control. Even though Joe Romm et al. are certainly over-the-top in their denunciations, it’s still possible that Levitt and Dubner really did do a slipshod job summarizing the climate science in their new book. I would argue that it’s happened before.

As an economist, I’m not qualified to judge whether they have fairly summarized the state of the climate science per se. However, in the remainder of this post I do want to defend Levitt and Dubner from some of Brad DeLong’s sweeping criticisms regarding their economics.

DeLong Forgets That Time Is Money

In a series of posts (one, two, and three), DeLong heaps extreme criticism on our authors. Under normal circumstances, DeLong’s criticisms would be described as “scathing,” yet compared to Romm’s treatment, it’s kid-glove stuff. For our purposes here, I want to focus on just two of DeLong’s (many) complaints. First DeLong quotes Levitt who said (during an NPR interview):

Mr. LEVITT: …[I]f you look at the history of modern mankind, I think you will be hard pressed to find any particular problem that was serious that was solved by a behavioral change, as opposed to by a technological solution…

DeLong is astounded by this claim, and responds:

That’s just not economics: economics is that incentives change, and as incentives change people’s behavior changes.

DeLong is right, what Levitt said is “not economics.” Rather, it’s a historical claim. Maybe it’s right, maybe it’s wrong, but DeLong can’t trump it by citing a tautology from microeconomics. I am sure that Levitt would concede the narrow point, that if governments around the world instituted a massive carbon tax, and enforced it with draconian penalties for evasion, then global emissions would indeed fall quickly.

But one of Levitt’s main points is that governments around the world are not going to do this, that it is naive to expect them to sacrifice their own economies when (in Levitt’s opinion) the climate science is not nearly certain enough to justify this painful step. Levitt is making a prediction–based on his interpretation of history–that if manmade global warming really does require drastic measures in the next few decades, that the response will involve various forms of geoengineering, which (Levitt predicts) will cost a tiny fraction of what the carbon mitigation proposals would require. To repeat, I’m not saying I necessarily endorse Levitt’s glib proclamations on these points, but DeLong is wrong for dismissing them as somehow “not economics.”

Finally let’s deal with another point on which DeLong completely misses Levitt’s valid argument. He first quotes Levitt:

LEVITT: Now, in the long run, perhaps you’ll want to deal with the [high] carbon[-dioxide] issue [even with geoengineering] because we’re going to have acidification of the oceans and the coral reefs will die if we don’t do something about the carbon. But if you just buy the time to keep the Earth cool for a while longer, I am certain that if we invest we will come up with technology that will allow us much more effectively in the future to pull carbon out of the air than we currently have….

DeLong points out that whatever mechanism our descendants use to suck CO2 out of the atmosphere, it will require power generation. He then argues:

So now we have (a) our normal power plants to power our civilization, plus (b) our atmosphere carbon-scrubbing industry, which is (c) powered by even more carbon power plants to generate the power to break the carbon-oxygen bonds that our first set of power plants made. But plants (c) put more carbon into the atmosphere than plants (a) did.

I know, says Steve Levitt, we can power our carbon-scrubbing industry (b) by power plants (c) that use nuclear or solar or… But then why not power our original civilization-sustaining power plants (a) by nuclear or solar or whatever?

Now this is frankly silly. Let’s be clear, I think Levitt and Dubner made some major goofs in their chapter, and DeLong (as well as Romm and Krugman) nailed them. But here DeLong is making an obvious mistake. He is neglecting the fact that it will be much much (relatively) cheaper to engage in carbon-free energy production the longer we wait. Does DeLong really not see that elementary point, and how it makes Levitt’s argument perfectly sensible?

For an analogy, consider people who contract a terminal illness and then elect to have their bodies cryonically frozen, so that they can be resuscitated and cured in the future. Now maybe that’s a good idea or maybe it’s not, but would it really make sense for someone to say, “That’s just bad economics! Why go to the trouble of having your cancer cured in the future? Just do it now.” ? Yet that is exactly the argument DeLong has deployed against Levitt.

Conclusion

There is a reason that the energy infrastructure in today’s market economies is so heavily based upon fossil fuels: They are by far the cheapest, most reliable forms of energy, given the needs of modern society. Regardless of their (alleged) sloppy scholarship, Levitt and Dubner raise an interesting possibility that deserves careful scrutiny, not ridicule: Even if it turns out that unfettered use of fossil fuels will spell unacceptable climate damages to future generations, it does not follow that the only solution is immediate and drastic reductions in carbon emissions. Another possibility is to buy a few decades’ worth of “breathing room” (Myhrvold’s phrase in the book) through pumping SO2 into the stratosphere or some other techniques, and then make the transition to carbon-free energy production when it will not be so terribly costly.

It’s surprising that some of the very people who literally warn that the fate of the planet itself is it stake, are so dismissive of what could be a crucial component of humanity’s response to the dangers of which they’re warning.