David Friedman makes some good points about the positive aspects of global warming. I would like to put the positives of global warming into context and pointing the way to making the analysis of the consequences of global warming more rigorous.

The consequences of global warming may have positive and negative consequences. The severity of any consequence should be assessed according to three factors.

1. Magnitude – how large it will be. This can be over a number of dimensions. So a predicted worsening of hurricanes, for instance, might be in frequency, power and area.
2. Likelihood. The Probability of a forecast event it occurring.
3. Randomness. It is predicted the weather systems will become destabilised, so the weather will become the norm.

When extreme events are postulated, the magnitude that is most often over-stated is time. So sea levels are imagined to rise by a foot a year, not a century at the current rate (3.2mm per year is the best estimate). The rate of change is crucial here. Incremental changes over generational times scale we will not notice globally, as economic conditions change much more rapidly than this. Also there are unstated assumptions about the likelihood of the events. From an economic point of view, the potential costs can be many times over-stated by a combination of magnitude and likelihood. There are two main reasons to believe this is the case – adaptation and way-markers.

Adaptation is people changing to changed circumstances. The reason that living standards are over 30 times greater and the world population is more than 10 times greater than 300 years ago is than the human race cannot just adapt to changing conditions – in wealthy countries extreme weather events and failed harvests are hardly a problem. Look back to the 1960s and 1970s, the mainstream forecasts were for increasing poverty and starvation. With the exceptions where governments are extremely bad (North Korea, Zimbabwe) or there has been extensive conflict (Zaire), this has not been the case. But many of the prophesies of doom assume no adaptation at all. So literally, farmers will grow the same crops they always have, and people will not think of moving as the sea immerses their houses.

Way-markers are the signals of climate change happening now. Many of the extreme short-term forecasts have been falsified, or shown to be based on pseudo-science. Sea levels have failed to rise by 25 metres anytime soon, the Arctic was not ice-free in the summer of 2008, nor will it be in 2013; the snows of Kilimanjaro are not primarily disappearing due to rising temperatures; and the Himalayan glaciers will not be gone by 2035. The Bangladesh landmass has increased; the Amazon rainforest is not about to reach a tipping point; and the Maldives will not disappear beneath the waves. With these clear near-term failures, it is reasonable to say that more long-term extrapolations will be unlikely and exaggerated in magnitude.

On the other side, whilst individuals and communities are incapable of adapting to changes, the assumption is that Governments can fix anything at minimal cost. So, subject to a global agreement, CO2 can be constrained (according to the UK Stern Review) at one fifth to one twentieth of the likely costs of doing nothing. No allowance is made that government projects tend to overrun on costs and underperform on benefits, nor that the this degree of underperformance tends to proportionately rise with lack of planning, vagueness of objections, complexity of organisations involved and scale.

Finally, for those with a grounding in economics, I have an unfinished project analysing the above issues graphically here and here.