G8 to gauge cost of species loss from climate change

Fri, 2007-03-16 11:51Bill Miller
Bill Miller's picture

G8 to gauge cost of species loss from climate change

The ministers conducted deliberations during a two-day meeting in the eastern German city of Potsdam. Also in attendance were ministers from Brazil, China, India, Mexico and South Africa.

Germany’s environment minister said 150 species were lost to extinction every day, and that loss of plant and animal species was an economic disaster fuelling poverty in many areas.

The Stern report estimated that climate change could cost between 5% and 20% of annual gross domestic product.

Previous Comments

For so many years, some in the environmental movement were against putting a dollar value on species loss. At least, as I remember from my environmental ethics class, there was concern that putting a dollar sign on species was a way of giving up on moral arguments about intrinsic, inherrent value of species in favor of an extrinsic cost-benefit analysis. In other words, just because we can’t make money off of some species (not all of them are going to be the key to a miracle cure) doesn’t mean that someone who could make a greasy buck by making it extinct should be allowed to do so. I’m not sure I’m any more comfortable putting a dollar value on species now.
Just a somewhat different perspective … It is a simple truth that there are more worthy causes than there are resources to fully address them. Like it or not, we need to assign priorities to the causes that we will address and face the fact that some of those further down the list will not be addressed. Various organizations have identified hundreds to thousands of species that face some degree of risk. To launch programs to protect all of them would be prohibitively expensive. We simply don’t have the money. We can allocate some resources (i.e. money) and try to save all of them but the likely result is that it will be mere tokinism which may make us feel better but will be too little to have any measurable effect. Assigning a “benefit” to protection of species is not a matter of someone “… make[ing] a greasy buck …” from their extinction. It is a necessary measure if we are to allocate the limited resources we have to effective programs to save those we can save. Given that the constraint is on money (or what we can buy with it,) we are pretty much driven to using a dollar value as the decision criteria for where those limited resources are applied.
BCH, to argue my point further: the question is not whether or not to figure out costs and benefits. The question is whether or not to act in a moral way. Acting in a moral way does not always cost money; sometimes it saves money. In terms of ‘saving the environment,’ acting morally often means NOT expending energy ($$) to do things. When this argument is brought up, then developers or whomever will cry about ‘opportunity cost’. What they inevitably end up saying is that we have to allow the destruction of nature to make the money so that we can save nature. It’s easy to fall into that empty thought pattern if one puts dollar values on everything.

Here’s something sombody said sometime that may be helpful: Economic considerations are a wonderful way to figure out the most efficient way to steer the ship from the harbour to some destination. Economics is, however, a lousy way to choose that destination.
If there is a proposed action … moral or not … that will be effective and demonstrably costs nothing then I don’t know of anyone that would oppose it. I also don’t know of any proposed project that meets that description. Further … whose “morals” exactly? Yours? Mine? GW Bush’s? David Suzuki’s? We all make the assumption that our moral position is superior but without some agreed basis for decision making, concerted action by the larger group will never happen. I’m not comfortable with accepting any of the above sources of “moral” perspectives as the best one to use … my own excepted of course. Ultimately any action that will have some effect (environmental or otherwise) is going to consume resources of some kind (materials, manpower, etc.) To mangle your metaphor even more … economics may not the way to select the destination but it will tell you if you can afford to go to there. I for example believe that it is immoral to deny a third of the world’s population access to clean water, sanitation, proper medical care and economic development. Major environmental NGOs like Greenpeace, The Sierra Club and WWF disagree and actively oppose development in the third world out of some “moral” obligations to preventing AGW for future generations or the saving the environment.

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The Stern report card: “If a student of mine were to hand in this report as a Masters thesis, perhaps if I were in a good mood I would give him a ‘D’ for diligence; but more likely I would give him an ‘F’ for fail. “There is a whole range of very basic economics mistakes that somebody who claims to be a Professor of Economics simply should not make.”
And yet, it’s the best review of the costs there is. Scare mongers keep printing headlines about how reducing CO2 output will bankrupt the Earth (just as a more vigorous version of how they complained about the clean water act and the ban on CFCs), but those projections have never been critically evaluated. All the people who supposedly are skeptical of climate science never seem to apply their skepticism to such reports.
like some scientific studies, are more equal than others. What I love is when people who claim to be upholding “science” use a highly unscientific selection of the science to uphold.
Agreed, Drew, that CO2 emission reductions are more likely to result in negative economic consequences in the short term than some other things. You complain about an unscientific selection of examples – how representative do you expect a sample of 2 to be? Also, this wasn’t about science (duh), it was about economic projections in the media. Finally, look at who the people were who argued against CFC controls. They are many of the same people (Tim Ball, Fred Singer, etc). Perhaps you should reconsider whether or not the example was relevant!
That quote from Richard Tol is buzzing around the web, and is funny not only because a Master’s thesis is acceptable or not, and typically not be rated as D or F (even a C is a failure in graduate school, and that is for classes, not the thesis). More to the point, is he is an independent judge. He has a previous result that looks very questionable now, in the light of not only Stern’s report, but many others:

Tol, R. 2002. Estimates of the Damage Costs of Climate Change. Part 1: Benchmark Estimates

Environmental and Resource Economics Volume 21:47-73

Abstract: A selection of the potential impacts of climate change – on agriculture,forestry, unmanaged ecosystems, sea level rise, human mortality, energy consumption, and water resources – are estimated and valued in monetary terms… Using a simple sum, world impact of a 1 ̊C warming would be a positive 2% of GDP, with a standard deviation of 1%. Using globally averaged values, world impact would be anegative 3% (standard deviation: 1%). Using equity weighting, world impact would amount to 0% (standard deviation: 1%).

Good grief.

Come on! That’s wet snow and they’re all dressed appropriately. You can’t get hypothermia doing that!

You’re going to have to try better than that!

Oh, well then it’s just more proof that protesting actually can change the weather.

Keep up the good work, protestors!

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Looking at the state of the world’s fisheries, reefs, and tropical rainforests, it is clear we’re doing a fine job obliterating species all by ourselves.

I have no problem looking at the environment in monetary terms. It’s time corporations started putting a value on clean air, clean water, and functioning ecosystems. They have been left off the balance sheets for too long and it’s showing.

I wouldn’t invest in a company that doesn’t take these things into consideration. To ignore natural capital and global warming is reckless and threatens the long-term viability of a venture. That’s bad business.

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