Climate change essay

[Porker]

With respect to my wealth destruction assertion:

(From Wikipedia - quicker than typing out a precis of the story myself)

The parable of the broken window was created by Frédéric Bastiat in his 1850 essay Ce qu'on voit et ce qu'on ne voit pas (That Which Is Seen and That Which Is Unseen) to illuminate the notion of hidden costs associated with destroying property of others.

Bastiat uses this story to introduce a concept he calls the broken window fallacy, which is related to the law of unintended consequences, in that both involve an incomplete accounting for the consequences of an action.

The parable describes a shopkeeper whose window is broken by his young son, and who has to pay for a glazier fixing his window. It conveys some thoughts on economy and money circulation. Bastiat's original parable of the broken window went like this:

“ Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation—"It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?"

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen."

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.”

The fallacy of the onlookers' argument is that they considered only the benefits of purchasing a new window, but they ignored the cost to the shopkeeper. As the shopkeeper was forced to spend his money on a new window, he could not spend it on something else. For example, the shopkeeper might have preferred to spend the money on bread and shoes for himself (thus enriching the baker and cobbler), but now cannot because he must fix his window.

Thus, the child did not bring any net benefit to the town. Instead, he made the town poorer by at least the value of one window, if not more. His actions benefited the glazier, but at the expense not only of the shopkeeper, but the baker and cobbler as well. Moreover, the benefit to the glazier is relatively small, because most of what he charges is to compensate him for his tedious and strenuous labour, as well as the materials he uses.

(End of Wikipedia quote)

My contention therefore is that doing things that are less productive than other things that you could do with the same money destroys wealth. In the climate change example, every pound we spend on wind-generation, for example, is a pound we can't spend on food, healthcare, defence, improved manufacturing technology, research and so on.

Moreover, much of that technology will come from abroad, further worsening our balance of payments.

Additionally, the less we spend on remaining competitive in the world, the less competitive we become, which has a real and very pronounced effect on wealth.

I could go on, but I hope that makes the point.

regards
P.

[Porker]

...non-human-influenced changes which are undoubtedly occurring.

That fact is often noticeable by its absence. I'm sure its understood by those doing the science, but I don't have much of an idea from the mainstream discussion about what the climate should be, and I think that's rather important. It's one thing to try and stop having an effect we might be actively having at the moment, quite another to try and manage the climate beyond that.

Gavin

I completely and utterly agree about there being no value (or set of values) for what the climate "should" be.

I do however think it's beyond doubt that the climate does change over time.

regards
P.

[MGF]

With respect to my wealth destruction assertion:

(Wikipedia quote)

That's not wealth destruction it is opportunity cost. Investing money in one thing means not investing in another. It doesn't destroy wealth, it just creates it in a different way.

My contention therefore is that doing things that are less productive than other things that you could do with the same money destroys wealth. In the climate change example, every pound we spend on wind-generation, for example, is a pound we can't spend on food, healthcare, defence, improved manufacturing technology, research and so on.

But in terms of wealth creation productivity is not measured by the benefits of the end result, hence my reference to pointless consumer goods. Consumption creates wealth not necessarily the way we consume.

Let me give you another example. The most productive use of land in terms of wealth creation would be for there to be little legislative control over development. The value of residential development land would plummet and we would all have a lot more money to spend on improving the quality of our lives. As it happens the wealth we create goes to developers and moneylenders.

The only reason we have planning controls is to protect the environment. That is a purely political choice not based on any scientific evidence that our environment would be harmed catastrophically if we had more freedom to build homes.

But we accept that without question. The difference in my view is that we can perceive our neighbourhood as being ruined. We cannot perceive great swathes of the world in general being ruined. So we don't care. And if it does happen it will most likely affect poor people as they are least able to protect themselves from the forces of nature.

So without cast-iron proof we simply deny that there is any need to do something about it.

Furthermore we convince ourselves that taxation will be invested in climate change control in the same way as it is invested in health or education etc. That is not true. The vast majority of the 'cost' of averting potential man-made climate change will come from private enterprise, innovation and entrepreneurship as you allude to below.

Moreover, much of that technology will come from abroad, further worsening our balance of payments.

Additionally, the less we spend on remaining competitive in the world, the less competitive we become, which has a real and very pronounced effect on wealth.

I could go on, but I hope that makes the point.

regards
P.

So what you are really complaining about is not the destruction of wealth per se but your lack of faith in British enterprise, innovation, entrepreneurship and technological know-how. You believe there will be a shift of wealth from one part of the workd to another. Quite simply we can't compete and so we should - pathetically in my view- cling on to our rapidly declining status in the world by resisting change.

We need to be careful about reducing consumption in the short term but there is no harm whatsoever in technology making a change in direction.

[Gareth]

Now I've started to think about it, I'm finding the concept of wealth to be particularly difficult to grasp. Nevertheless I think there is something that can be said about wealth destruction in relation to this discussion.

So what you are really complaining about is not the destruction of wealth per se but your lack of faith in British enterprise, innovation, entrepreneurship and technological know-how. You believe there will be a shift of wealth from one part of the workd to another. Quite simply we can't compete and so we should - pathetically in my view- cling on to our rapidly declining status in the world by resisting change.

It seems to me that there is an overall destruction of wealth when goods are destroyed for reasons other than they've come to the end of their working life. Older cars is the obvious example here, and one that appears to make little sense from a 'green' point of view.

Within the context of the British economy, and therefore the well-being of British people, it seems to be a certain kind of destructiveness to make decisions that will result in large amounts of money being spent on goods of foreign manufacture, especially if those decisions are made for ideological reasons without their being a corresponding pragmatic benefit. I don't know if this is the case for the proposed massive expansion of wind turbines, but I'm not convinced it's good for the country. Related to that I also despair that Britain isn't in the position to build it's own nuclear reactors for power generation, and wonder what decisions over the years have lead to us being in this unenviable position.

I expect most of it comes down to the idea that service industries, and financial services in particular, are all that's required for a country to survive as an economic power in the current age. It seems we are all too easily held hostage by others that supply the goods and raw materials we need.

[fungus]

Gareth wrote,

It seems to me that there is an overall destruction of wealth when goods are destroyed for reasons other than they've come to the end of their working life. Older cars is the obvious example here, and one that appears to make little sense from a 'green' point of view.

Within the context of the British economy, and therefore the well-being of British people, it seems to be a certain kind of destructiveness to make decisions that will result in large amounts of money being spent on goods of foreign manufacture, especially if those decisions are made for ideological reasons without their being a corresponding pragmatic benefit. I don't know if this is the case for the proposed massive expansion of wind turbines, but I'm not convinced it's good for the country. Related to that I also despair that Britain isn't in the position to build it's own nuclear reactors for power generation, and wonder what decisions over the years have lead to us being in this unenviable position.

I expect most of it comes down to the idea that service industries, and financial services in particular, are all that's required for a country to survive as an economic power in the current age. It seems we are all too easily held hostage by others that supply the goods and raw materials we need.

The car scrappage scheme has nothing to do with the environment and everything to do with bolstering the sales of new cars that had fallen due to the recesion which was largely brought about by the finance industry. This in turn has the effect that the smaller independant garage is loosing business because some customers are scrapping in some cases perfectly good servicable cars and buying cheap foreign imports. One garage/tyre bay that we use has lost six customers due to the scrappage scheme. one customer scrapped an eleven year old Micra with 20k on the clock. The garage owner said he would have liked it as a courtesy car, but it was not worth £2000. He was prepared to pay up to £1200. So a perfectly good car went for scrap. The irony is that most people running old bangers are not the ones trading their cars in.

Gareth is correct when he says that we have relied on service industries in this country. We no longer have a sound manufacturing base. Over powerfull unions and bad management in the late sixties and early seventies saw off our car industry. The boom in the financial sector and housing market through out the last forty or so years has caused borrowing on an unprecidented scale, resulting in a boom and bust economy, with opperating costs higher than in the old Soviet block and the far East, so manufacturers are re locating to countries with lower wage economies and where there are more favourable manufacturing conditions.

Our neuclear power industry has suffered from a lack of investment for years, unlike the French who invested heavily and are now seing the benifit. The relience on alternative energies will surely not be sufficient to supply the needs of our growing population, and we will be even more relient on other countries to supply our needs, just as we are with gas.

We continue to sell off industries to foreign competition who often asset strip and close down the plants in Britain. I can see the the situation in a few years time where very little in Britian is British owned.

[fungus]

YES I've managed to quote and get it into a neat box.

Fluke?

[Gareth]

It seems to me that there is an overall destruction of wealth when goods are destroyed for reasons other than they've come to the end of their working life. Older cars is the obvious example here, and one that appears to make little sense from a 'green' point of view.

The car scrappage scheme has nothing to do with the environment and everything to do with bolstering the sales of new cars that had fallen due to the recesion which was largely brought about by the finance industry.

I wasn't thinking just about the scrappage scheme; the various ways in which cars are taxed includes a large bias towards 'green' cars which ultimately must result in some older cars being scrapped earlier than if the various taxes were applied in a neutral fashion.

[crr003]

YES I've managed to quote and get it into a neat box.

Fluke?

No - I got Darren to sort it out. It was doing my head in!

[martine]

Porker and Fungus: the idea the earth has not warmed since 1998 is a red-herring (sorry red-herring!).

For a start the global temperature you are referring to is a sqwiggly line showing large variation up and down year to year. It the trend that's important and secondly take a look at:

http://www.skepticalscience.com/global-warming-stopped-in-1998.htm

Porker: you refer to experts being wrong in the past...agreed, it happens and the majority could be wrong over this but since you are (I assume) not a global climate scientist yourself, why do you choose to believe the tiny minority? Are you a betting man? It seems perverse as a lay-man not to listen and give most credence to the majority of experts.

[Gareth]

For a start the global temperature you are referring to is a sqwiggly line showing large variation up and down year to year. [...] It seems perverse as a lay-man not to listen and give most credence to the majority of experts.

Although not addressed to me, here is my answer ...

1. The climate is changing and it has always changed. I don't think anyone disagrees with this. The fundamental question is whether mankind is having a significant effect on this process. I'd be curious to know the answer to this as, I suspect, would many of the 'protagonists'. Is mankind's contribution significant compared to that of a volcano erupting? How about when compared to variations in the sun's energy output?

2. Nobody seems to be saying how we want the climate to be. Should it be warmer than it is now? Should it be colder? Are we in the position to control our climate to any significant degree anyway?

3. How can an outsider accurately assess what climate researchers have found? A large proportion of the 'experts' in the IPCC process appear to have little to do with climate research, so presumably we should discount the 'weight' of their opinions. We know that some climate researchers have conspired to deny access to peer reviewed journals for some other climate researchers who perhaps have come to different and less fashionable conclusions.

4. The standard model for scientific investigation is that a null hypothesis is proposed and experiments devised that attempt to disprove the hypothesis. This approach appears to conspicuously lacking when it comes to climate research, especially on the side that promotes the idea we're heading towards disaster.

5. The arguments appear to revolve around computerised models of the earth's climate, but the raw data isn't available for those who would like to investigate and independently corroborate, or otherwise, the findings. Indeed we've learned that much of the raw data has been 'massaged' before being used in these models. Sometimes, we've also learned, 'data' has been created or, at least, creatively generated.

6. There appear to be many vested interests, especially so since the science has been largely politicised.

Through all this, the question of whether mankind's contribution is significant and even if it is whether it is likely to be beneficial or not has become yet another religion that so polarises debate that, in my view, rational discussion has become all but impossible.

[TripleS]

Well said, Gareth.

I've no idea whether or not climate change is being used as a basis for yet more tax gathering measures - a laughable notion to some - but it wouldn't surprise me to learn that it is being so used. These politicians are sneaky pillocks so I'm inclined to play it safe(ish) by tootling around quietly and economically in a nice 406 and thus saving the planet, rather than teararsing about at great expense in, er, for example, a noisy and thirsty Focus ST.

Hello, Martin.

Best wishes all,
Dave.

[x-Sonia-x]

I'm inclined to play it safe(ish) by tootling around quietly and economically in a nice 406 and thus saving the planet, rather than teararsing about at great expense in, er, for example, a noisy and thirsty Focus ST.

well for me....I wouldnt mind teararsing about in an ST

[TripleS]

I'm inclined to play it safe(ish) by tootling around quietly and economically in a nice 406 and thus saving the planet, rather than teararsing about at great expense in, er, for example, a noisy and thirsty Focus ST.

well for me....I wouldnt mind teararsing about in an ST

Indeed, but you're relatively young and enthusiastic - and long may you remain so - whereas I'm aged and crotcherty and generally 'past it' so it niggles me to see other people enjoying themselves.

Best wishes all,
Dave.

[jont]

More fuel for the fire:
http://www.guardian.co.uk/environment/2 ... false-ipcc

[martine]

More fuel for the fire:
http://www.guardian.co.uk/environment/2 ... false-ipcc

Yes embarassing indeed for the IPCC and others here have made reference to it...it's had a lot of media attention...but so what?

Out of the thousands of word/statements/pages/reports digested and issued by the IPCC it would be surprising if some errors didn't crop up wouldn't it? I really don't see it as being significant in the overall scheme of things.

SSS: just to clear my conscience, I rationalise driving an ST by paying loads more tax (road and petrol). I am a firm believer in giving people the option as long as they pay their way. I dread the day when all new cars are hyper-efficient, slow and no fun - the great god: Jeremy Clarkson did a stunning film on Top Gear last year which summed up my feelings...