The New York Times' stunningly false and deceptive hit piece to preserve climate alarmism

Joe Stiglitz wrote a lengthy review of my new book for The New York Times. It is overwhelmingly negative, but also overwhelmingly false.

The piece consists of Stiglitz enumerating four specific and compounding mistakes that I apparently make, and then another six separate observations. I will go through all of them below, starting with the four mistakes.

My first “mistake”

My first mistake is that I draw “heavily on the work of William Nordhaus of Yale University, who came up with an estimate of the economic cost to limiting climate change to 1.5 to 2 degrees Celsius above preindustrial levels.” Instead the High-Level Commission on Carbon Prices, which Stiglitz co-authored, showed that 1.5°C-2°C goals “could be achieved at a moderate price.”

This is triply wrong. I don’t rely on Nordhaus for the cost on limiting temperature rise for 1.5°C to 2°C, simply because Nordhaus does not make that estimate. Nordhaus explicitly writes, as Stiglitz would know had he read Nordhaus or my book: “A limit of 2°C appears to be infeasible with reasonably accessible technologies even with very ambitious abatement strategies.” Indeed, this point is part of Nordhaus’ abstract:

Secondly, Stiglitz claims that his report estimates “a moderate price” for reaching the Paris agreement. This is false. There is no estimate of the total economic cost of a 2°C or 1.5°C target in his High-Level Commission on Carbon Prices.

Compounding Stiglitz’ error is the fact that the background report for his high-level commission does indeed list the UN Climate Panel cost estimate for reaching 1.5-2°C at more than 4% of GDP by 2100 (p2), which makes Nordhaus’ 1.38% GDP economic cost at the lowest temperature scenario of 2.35°C by 2100 substantially smaller (not larger, as Stiglitz claims).

Stiglitz throughout his piece neglects to inform the reader that Nordhaus is not just any old economist, but actually the only climate economist to get the Nobel prize for his work on climate economics. For reference, Stiglitz got his Nobel prize in economics for analyses of markets with asymmetric information like the selling and buying of used cars.

For the first mistake, Stiglitz makes two false claims and no correct, relevant claims.

My second “mistake”

My second mistake is “Nordhaus’s and Lomborg’s underestimation of the damage associated with climate change.” Stiglitz is in reality informing us that he knows much better than the world’s only climate Nobel economist.

But curiously, Stiglitz never tells us what the right cost is. As such, Stiglitz makes an absurd claim, essentially asserting he knows better than the best peer-reviewed evidence — but just couldn’t be bothered to share that knowledge publicly.

Notice, Nordhaus’ cost is based on all the peer-reviewed cost estimates listed by the UN Climate Panel and updated to 2018. Like all good scientists, Nordhaus actually bases his estimates on data and makes it clear where that data comes from.

Again, I also show and reference all this in my book. Here is Nordhaus’ crucial graph:

Stiglitz gives one indication of his knowledge on this matter. He claims that a significant part of the cost of climate change “includes more extreme weather events — more intense hurricanes, more droughts, more floods, with all the devastation to life, livelihood and property that accompanies them. In 2017 alone, the United States lost some 1.5 percent of G.D.P. to such weather-related events.”

Yet, again, he seems to have forgotten to actually acquaint himself with the best evidence on the science and economics of extreme weather events. As the leading researcher on economic impacts of extreme weather events says, Stiglitz is “just wrong.”

Perhaps most conspicuously, Stiglitz seems to suggest that the 1.5% US cost of extreme weather is the climate cost. But of course, even he knows that many of these hurricanes and other impacts would have happened anyway, so clearly it can only be a part of the 1.5% that is the climate cost.

But more importantly, Stiglitz is just cherry-picking and ignoring the actual data. He picked the costliest recent data point and he neglects that the trend for the US (and similarly for the world) is declining.

Stiglitz picks 2017, because it is a large number (not 2018 or 2019, which wouldn’t have worked as well rhetorically) and simply declines to inform that the relative costs are actually declining.

Stiglitz is simply doubly wrong on his only indication of how Nobel Laureate Nordhaus and I should be wrong, so for the second mistake, Stiglitz makes two false, one unsubstantiated and no correct, relevant claims.

My third “mistake”

Stiglitz suggests that “A third critical mistake, compounding the second, is not taking due account of risk.”

Ah, if only the world’s only actual Nobel laureate in climate economics had thought of incorporating risks.

Of course, Nordhaus has included risk and that I describe this very inclusion in the book. Nordhaus explicitly includes — and I explicitly write about it in the book — the costs from risks, both of omitted areas of damages, of catastrophic risk and of uncertainty. He does so by increasing the damage estimate by 25%, based on an expert survey. He also models a different impact of risk in his newest American Economic Journal article.

Of course, Stiglitz could still have quibbled about a different way to model risk, and added his own take on this. But he does not. He simply — and falsely — suggests that Nordhaus or I have not taken this obvious point into consideration.

As Stiglitz often does, he cannot help himself being so sure of his own abilities that he ends up adding a point, that he thinks strengthens his argument, but which is simply provably incorrect. Specifically, Stiglitz assuredly tells us that the best damage estimates are underestimates because “as we learn more about climate change these best estimates keep getting revised, and, typically, in only one direction — more damage and sooner than had been expected.”

No, they do not. This is the kind of claim one makes if one gets most of one’s climate information from news media.

Stiglitz’ claim is equivalent to asserting that the social cost of carbon estimate would be increasing over time. It is not. Here is the clearest statement in a 2009 review: “estimates of the economic effects of greenhouse gas emissions have become less pessimistic over time.”

And this was reconfirmed again in a 2018 review, confirming that the overall picture is still one of a gradual decline (contrary to Stiglitz’ claim) and that neither upwards nor downward revisions are supported:

For the third mistake, Stiglitz makes two false, one unsubstantiated and no correct, relevant claims.

My fourth “mistake”

Stiglitz seems to claim that Nordhaus and I use a discount parameter that is too low for his liking. I cite the whole paragraph, because it is unclear what his actual point is except a rant against the Trump administration:

Stiglitz apparently suggests that Nordhaus and I use a 7 percent discount rate to spew out the numbers that are in my book. This is demonstrably false. Perhaps Stiglitz knows he’s fibbing, given that he settles for criticizing Trump and then conflating the 7% with the “models Lomborg loves.”

Instead, Nordhaus’ discount rate is calibrated to the real interest rates, meaning a 4.8% discount rate in 2015, declining to 3.5% in 2100. Again, Stiglitz would be welcome to argue that he finds it should be even smaller (although the Nordhaus interval is clearly within the Obama IWG discount rate range). But he should do so honestly, and recognizing that this discount rate range is absolutely defensible.

As he would know, having been World Bank chief economist, it is one thing what rich, liberals in Manhattan want for a discount rate. Most of the rest of the world has much higher discount rates. When we worked with the government of Haiti, the central bank decided on 12% (even contemplating 20%), while Ghana decided 8%.

For the fourth mistake, Stiglitz makes one false and no correct, relevant claims.

Other claims

For the four central mistakes, that Stiglitz claim I make, he actually makes no correct, relevant claims, but seven false and two unsubstantiated claims.

Let us just look at the rest of the Stiglitz substantial points.

Media drives alarmism

He seems to brush off my points that the hyperventilating media is one of the main causes of alarmism simply by saying “fake news”:

Of course, simply suggesting that I mean to say “fake news” (which even Stiglitz acknowledges I don’t say), doesn’t make the facts go away. For example, I outline how New York Times claims that South Vietnam by 2050 will “all but disappear” because it will be “underwater at high tide.”

While the story was reported in almost all media, it was clearly incorrect. Because almost all of South Vietnam is already under the high tide mark today, and almost all of South Vietnam is already well-protected today:

When an intellectual like Stiglitz ignores this example and many, many others I show throughout the book, with the simple wave of “fake news” it comes across as abdicating on his duty to be intellectually honest.

Regulation

Stiglitz claim that I miss discussing good regulations as a way to tackle climate. It is ironic that he complains I talk mostly on a carbon tax and not regulation, given that his own High Level Panel almost exclusively discusses carbon taxes.

When Stiglitz claims that “preventing coal-burning electric generators” is apparently a better approach than a carbon tax, he is essentially saying that he knows across all settings that coal-burning is never the most effective generation even with a carbon tax. This is just implausible.

But actually, I do discuss regulation, and show that it is mostly less effective than a carbon tax (this is the standard find in climate economics). Specifically, I point out that Renewable Portfolio Standards typically result in twice the costs of carbon taxes.

But more importantly, Stiglitz seems to have missed at least the last third of my book. Here I talk about

1.    Innovation: how we should invest $100 billion per year in green R&D (regulation, not taxation)

2.    Adaptation: regulation like zoning, building regulation and more pervious city surfaces (to ensure less flooding)

3.    Geoengineering: which will be almost entirely a regulatory approach

4.    Prosperity: mostly about better policies including regulatory policies

Stiglitz’ claim that I ignore regulation is blatantly false.

Wall Street underwater

Almost bizarrely, Stiglitz chides me for not including in my book that Wall Street could be underwater by 2100:

I’m sure he mostly included it because it is a funny rhetorical point. But that does not make it true.

The research very clearly shows that at least when an area has sufficient value (as Wall St and surrounding areas certainly have) all will be safeguarded through adaptive policies (like sea walls etc.).

I even show this in a graph in the book, based on this paper. We only see significant flooding when we disregard adaptation:

So when Stiglitz chides me for not including that Wall Street might be underwater in my book, it is because such a claim would be false. His is a good example of bad information from hyperventilating media.

Copenhagen Consensus

Stiglitz writes a slyly derogatory paragraph about the think tank I work for, Copenhagen Consensus:

The paragraph doesn’t seem to say anything but that the experts are conservative and that we didn’t include any “true experts” on climate science.

On his first claim, we have worked with more than 300 of the world’s top economists and seven Nobel Laureates. Our main focus is all the world’s problems, not just climate change, so many are experts in the economics of malaria, infrastructure, water, education etc.

We certainly don’t have a ‘conservative’ bias — we’ve actually invited Stiglitz to be a member of several eminent panels together with his Nobel colleagues. But it also shows that Stiglitz seems to be suggesting that only liberal economists such as himself can be trusted to help set priorities for the world.

On his second claim, we have worked with many climate economists, and when we did our big climate consensus, we worked with 27 of the world’s top climate economists, publishing the results as a book with Cambridge University Press, which even got a favorable quote from the IPCC’s chairman (“This book provides not only a reservoir of information on the reality of human induced climate change, but raises vital questions and examines viable options on what can be done to meet the challenge.”).

Stiglitz’ derogatory two claims are simply incorrect.

Lack of prioritization

One of the key points of my book (and the Copenhagen Consensus’ work) is that we have to prioritize. No matter the amount of resources available, there is never enough to do everything, and hence we have to make sure we spend resources where they can do the most good first.

The allocation of scarce resources with alternative uses, of course, is the key definition of economics.

Stiglitz seems to acknowledge this, and then immediately backtracks by claiming that “it is possible to walk and chew gum at the same time.”

It is true that one can both walk and chew gum. I’m not sure how that relates to the fact that one can’t spend $100 on one thing and still spend it on another thing. Allocating resources to one choice simply means there are fewer resources to address other choices.

This is basic economics, and a quip can’t make that go away. All serious analysis shows that tackling climate change will be costly and have consequences for available resources elsewhere. This is true for all the analyses done across all energy-economic models in the Stanford Energy Modeling Forum, see e.g. for the world, EU and the US.

This is why (as I reference in my book) the Paris Agreement will lead to more poverty:

Glibly telling people “you can walk and chew gum” doesn’t actually help the extra people stuck in poverty.

When Stiglitz claims that advocates of the Green New Deal claim it could usher in a new era of prosperity, this is hardly surprising, and it is certainly not a good academic argument.

He claims his own his High-Level Commission on Carbon Prices shows that the green transition can promote economic growth. Well, what it does show, is that the revenue of the carbon tax could be used for generating more sanitation, paved roads or social transfers (p42ff). This is correct, but utterly irrelevant. Obviously, money from a tax can be used on many things (some of which I’m sure Stiglitz wouldn’t like), but they can still only be used once. And the point is, that with more stringent climate policies, GDP will be slightly lower, hence there will be less in total to spend.

It is still possible this is overall a net benefit, because there will also be fewer (often non-market) climate impacts. That is the whole point of the cost-benefit analysis that Nordhaus has spent most of his career on developing (which I describe in the book, and that he got the Nobel prize for), but simply saying that “walk and chew gum” is possible and claiming that campaigners think their project is good is a false way to reject the central point of economics, namely allocation of scarce resources.

The new IPCC report shows end-of-world

Stiglitz finally claims that because I cite the UN Climate Panel so often, one could believe I might be right. But, he comforts his readers, “nothing could be further from the truth”:

In the new 2018 report (Stiglitz gets the year wrong), apparently the researchers are so worried that Stiglitz can divine how they really disagree with Nordhaus’ and my models.

This is wrong. When you actually read the 2018-report (and I quote this on page 85), it says that unmitigated climate change will cost 2.6% of GDP by 2100. It moreover says that yes, 2°C will be worse than 1.5°C — it will be a cost of 0.5% of GDP rather than 0.3% (page 256) — a problem, but certainly not the end-of-the-world:

This undercuts Stiglitz’ claim. What I say in the book is also what is in the IPCC 2018 1.5°C report.

Then Stiglitz goes on to make the exact scare scenario in which the media excels and that I have criticized. The 60 feet sea level rise is from a world in an entirely different part of the state space. He knows very well that such statistics are only meant to scare but not informative for what will happen for us, in this part of the state space. That, of course, is exactly what the IPCC reports are about. They talk about a high outcome of 3 feet of sea level rise by 2100. The only reason to throw out 60 feet is to scare people silly.

Summary

Stiglitz makes 12 substantial claims in his review. Stunningly, all 12 are demonstrably false:

1.    Stiglitz claims I draw heavily on Nordhaus for a high cost of 2°C and 1.5°C. This is false, because Nordhaus manifestly says it can’t be done.

2.    Stiglitz claims that his report estimates “a moderate price” for reaching the Paris agreement. This is false. There is no estimate of the total economic cost in his High-Level Commission on Carbon Prices.

3.    Stiglitz claims extreme weather has already become more expensive. This is demonstrably false.

4.    Stiglitz claims that the US experienced 1.5% cost from extreme weather, suggesting this is because of climate change and is increasing. The fact is, it is mostly or entirely not because of climate change, and the trend is decreasing. False.

5.    Stiglitz claims that Nordhaus and I don’t take risk into account. We do, demonstrably and repeatedly. False.

6.    Stiglitz claims that social cost of carbon estimates are increasing over time. They are not. False.

7.    Stiglitz seems to claim that Nordhaus and I use too high a discount rate. This is an opinion and seems unsubstantiated. But his specific suggestion that we use a 7% discount rate is straight-out false.

8.    Stiglitz claims I ignore regulation as an alternative for a carbon tax. This claim is manifestly false — the whole third part of my book is about regulations beyond a carbon tax to tackle climate.

9.    Stiglitz claims I should have written that Wall Street could be underwater by 2100. I didn’t because writing this is actually false. In any realistic scenario Wall St (and almost all other valuable areas) will be protected. False statement.

10. Stiglitz claims that Copenhagen Consensus lacked “true experts” but we actually included 27 of the world’s top climate economists. False.

11. Stiglitz says I’m right that there are other problems in the world, but that is a false choice, because it is possible to walk and chew gum at the same time. That is just glib: all peer reviewed climate economics show that there are real tradeoffs on climate policy — more expensive policy has benefits, but also leads to fewer resources for other areas. Indeed, the Paris Agreement will lead to more poverty. Saying “walk and chew gum” does not make the hard choices go away. False.

12. Stiglitz claims that the new 2018 IPCC report shows that I’m wrong. But unfortunately, they actually quote numbers that are similar (and somewhat lower, not higher as Stiglitz claims). False.

Moreover, Stiglitz claims that Nordhaus and Lomborg underestimate of the damage associated with climate change. He doesn’t provide any alternative estimate or indication of this estimate. The used estimate is the one from the UN Climate Panel. This claim is unsubstantiated.

Stiglitz also ignores my many examples of the media hyperventilating on climate reporting and brushes it off with an incorrect claim of “false news.” At best, this is dereliction of Stiglitz’ academic duty.

Making 12 substantial criticisms of my book and that they are all false, is quite an achievement. It is hard not to conclude that Stiglitz’ review of my book is a deceptive and false hit piece. It is perhaps not surprising that Stiglitz actually said that he was going to give the book a bad review even before he read it. In many ways, it seems like he still hasn’t read it.

I have asked New York Times to rectify this terrible article.