Lord Ridley’s flawed article in ‘The Spectator’

This week’s issue of ‘The Spectator’ features an article by Lord Ridley, the Conservative hereditary peer, which addresses an important question: what are the overall impacts of climate change so far, and what will they be in the future?

Unfortunately, having asked a good question, Lord Ridley’s shallow grasp of the issues and ideological approach leads him to a flawed interpretation of research findings and ultimately to an unfounded conclusion that “climate change has done more good than harm so far and is likely to continue doing so for most of this century”.
Lord Ridley bases his entire thesis on just two academic papers, both by Richard Tol, a professor of economics who, like the former Northern Rock chairman, sits on the “academic advisory council” of the Global Warming Policy Foundation, Lord Lawson’s lobby group for climate change ‘sceptics’.

The first of Professor Tol’s papers cited by Lord Ridley was published in 2009 in the ‘Journal of Economic Perspectives’. It presents a meta-analysis of 14 studies, from which Lord Ridley draws the conclusion that “climate change would be beneficial up to 2.2°C of warming from 2009”.

However, Lord Ridley is apparently unaware that, of the 14 studies considered, only three show overall positive impacts, and of those, two are openly acknowledged to be incomplete assessments of the consequences of climate change, while professor Tol simply makes a mistake with the third study.

One paper by Professor Robert Mendelshohn and colleagues, which was published in 2000, used two methods to produce estimates of impacts from warming of 2.5°C of 0.1 per cent and -0.1 per cent of global GDP. But it only considered effects on some economic sectors and omitted consideration of, for instance, damage to human health. The authors stated that their results “cannot be compared directly against estimates of all impacts”.
Similarly, the other paper genuinely estimating a positive impact from warming of 1°C, published by Professor Tol himself in 2002, excludes a long list of impacts, including those relating to recreation, tourism, extreme weather, fisheries, construction, transport, energy supply and morbidity.

The third paper that apparently supports Lord Ridley’s conclusion was published by Professor Chris Hope in 2006, and estimated that warming of 2.5°C would result in economic impacts of 0.9 per cent of GDP, according to the 2009 analysis by Professor Tol. However, he confirmed in an email to me this week that this was a typographic error and the Hope (2006) paper actually shows impacts of -0.9 per cent.

Hence the conclusion that there are net positive benefits for human welfare from global warming up to 2.2°C is really based on just two of the 14 studies included in Professor Tol’s 2009 analysis, and both of these openly acknowledge that they exclude a large number of impacts. Hence there is no real basis for Lord Ridley’s claim that there is a “consensus of opinion” that climate change is doing more good than harm.

The uncertainties and big gaps in knowledge are features not just of the papers that show overall positive impacts but also of the other studies included in Professor Tol’s 2009 analysis. For instance, it also includes a paper by Professor Bill Nordhaus which was published in 2006. Professor Nordhaus estimated that global warming of 3.0°C would result in a reduction in global output of 0.9 per cent, but assumed no change in rainfall. However, the paper also suggested that when changes in rainfall are taken into account, as well as variations in the densities of human populations that are exposed to the impacts, the loss in global output would be 2.95 per cent (this result was not included in Professor Tol’s analysis). But like the paper by Mendelsohn and co-authors, the Nordhaus 2006 paper does not take into account so-called non-market impacts, such as damage to human health.

As Nicholas Stern pointed out in his new paper in the ‘Journal of Economic Literature’ , many scientific models appear to substantially underestimate the risks posed by future climate change because they omit key factors that are hard to capture precisely, and “many economic models add further gross underassessment of risk because the assumptions built into the economic modelling on growth, damages and risks, come close to assuming directly that the impacts and costs will be modest and close to excluding the possibility of catastrophic outcomes”.

Professor Tol is well aware and upfront about the limitations in his 2009 analysis, warning that “the level of uncertainty here is large, and probably understated – especially in terms of failing to capture downside risks”. This applies particularly to the estimates of potential future impacts due to warming of 2.5°C to 3.0°C, which 12 of the 14 studies cover. Professor Tol stated: “While it is relatively easy to imagine a disaster scenario for climate change – for example, involving massive sea level rise or monsoon failure that could even lead to mass migration and violent conflict – it is not at all easy to argue that climate change will be a huge boost to economic growth”. He added: “The policy implication is that reduction of greenhouse gas emissions should err on the ambitious side”.

But Lord Ridley ignores all of these errors, limitations and caveats, while also wrongly assuming that the analysis of the 14 studies indicates how costs would accumulate from temperature rise over the course of the 21st century. In fact, Professor Tol warns: “Of course, it is something of a stretch to interpret the results of these different studies as if they were a time series of how climate change will affect the economy over time, and so this graph should be interpreted more as an interesting calculation than as hard analysis”.
Lord Ridley’s article goes on to cite another paper by Professor Tol which has just been published in a book edited by Dr Bjorn Lomborg, who runs the Copenhagen Consensus Center NGO based in the United States. Lord Ridley again turns a blind eye to the shortcomings and uncertainties about impacts, highlighting an average estimate that global warming could result in a positive economic impact equivalent to 1.5 per cent of GDP by 2025, which reduces only gradually and does not become negative until about 2080.

But Lord Ridley neglects to mention that Professor Tol’s paper assumes that global average surface temperature will only be about 3.6°C higher than pre-industrial by the end of the century. This is much lower than the top of the range of projections published by the Intergovernmental Panel on Climate Change (IPCC) in September 2013, in which its highest emissions scenario leads to a 66 per cent or higher probability of global warming of 3.2°C to 5.4°C above pre-industrial by the last two decades of this century.

Similarly, Professor Tol’s paper suggests that sea level will only be 73 centimetres higher by the end of the 21st century compared with 1900, while the IPCC’s high emissions scenario suggests sea level could be 1 metre or more higher by 2100 compared with the start of the 20th century.

Not only does Professor Tol’s paper not take into account the full range of uncertainty around future rises in global average temperature and sea level, but it also makes extremely optimistic assumptions about the impacts of climate change.

For instance, it indicates that agricultural productivity in all regions of the world benefited from climate change throughout the 20th century, and that this will continue throughout this century. This is because the fertilisation effect on plants of higher levels of carbon dioxide in the atmosphere are assumed to outweigh all other consequences of climate change, such as possible reductions in rainfall or increases in heat stress. Professor Tol acknowledges that “this is in contrast to the empirical literature”. For instance, a major review by David Lobell and colleagues which was published in 2011  concluded that “the net effects of higher CO2 and climate change since 1980 have likely been slightly positive for rice and soybean, and negative for wheat and maize”.

Having provided an incomplete account of Professor Tol’s papers, Lord Ridley proceeds to cite some cherry-picked pieces of information to try to coax readers into believing his thesis that climate change is good for the world.

For instance, he claims that people in the UK who are at risk of cold-related deaths will “benefit from global warming”. Official estimates published by the Health Protection Agency last year show that this may be true, with global warming expected to lead by the 2050s to a reduction in cold-related deaths compared with the 2000s of 1,011 from 41,408 to 40,397 in the UK. However, Lord Ridley does not mention that the same projections show that heat-related deaths would increase by a much larger figure of 5,066 from 1,974 to 7,040 over that period.

Much is uncertain about the impacts of climate change, even at moderate levels of warming, let alone the extreme levels that could occur by the end of this century if greenhouse gas emissions continue to increase at their current rate. Yes, there are likely to be some beneficial as well as negative effects in the short-term, but Lord Ridley’s sweeping ideological conclusion that climate change is good for the world can be reached only through a very selective reading of the research literature.

Bob Ward is policy and communications director at the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science.