300,000+ per annum dead due to Climate Change?

The claim by the Global Humanitarian Forum that over 300,000 people per year is unsubstantiated and most likely false. It is based on a selective reading of data and should be challenged. In particular, the assumption that 40% of the increase in disasters is climate change related and the implication is that we should severely curtail greenhouse gas emissions to mitigate it.

The case studies from the full report (here) illustrate why.

–         Hurricane Katrina (p.21). Latest evidence is that there is most likely a link between global warming and hurricanes, but the nature is unknown. It may be temporary whilst temperatures rise. The deaths and much of the economic destruction in Hurricane Katrina was a result of poorly-maintained levees breaking. The human costs (lives and $) was due to a powerful hurricane hitting land on a major population centre. The probability of any one hurricane doing this is very low.

–         2003 European heat wave — 35,000 deaths (p.33).  Unique events cannot be easily adapted to. Contingency plans have been put in place, but in almost 6 summers since there has been no repeat. However, higher temperatures mean than winters are milder. In the UK alone there are thousands of deaths amongst the elderly with elderly every time due to extremes of cold. So the net impact of global warming (even with more extreme conditions) could be a reduction in climate-related deaths.

–         Ethiopian drought and flooding (p.32). The report quite rightly points out that many of the population is malnourished, there is severe water shortages and there are frequent droughts. However, they fail to point out how this is increasing as global temperatures rise. If my memory serves correctly, there has been no famine matching that of 1984, despite the population having increased. There was also a large famine in 1973. Unless there are strong counter-arguments to the contrary, any climate change may have had a positive impact. The counter-arguments are that a) There has been economic growth in the last 25 years. Although still one of the poorest countries on earth, there is sufficient wealth around to cope with famines. b) Aid agencies have structures and plans in place to avert potential disasters. c) There is no longer a pro-Marxist government pushing through collectivization of agriculture and placing obstacles in the way of relief efforts.

The implication from my reading of these examples is that even if they are wholey due to climate change, the way to mitigate them is a targeted response at the local level. In the 3 cases above, it is unlikely that similar scale weather events would cause similar scale disasters, as there are now contingency plans in place. Further the evidence of earthquakes is that the most deaths occur in the poorer parts of the world. A similar-sized earthquake to that of China in 2008 or Bam, Iran in 2003 replicated in California or Japan would not cause the same number of deaths because of better buildings. and better emergancy services. And these are as a consequence of much greater wealth.

In terms of deaths through hunger, the greatest famines in the 20th century were due to authoritarian governments and wars. The suffering under various communist regimes trying to instill their various brands of utopianism should be a cautionary tale to trying to regulate the world economy. This was based on the certainty that theirs was the perfect system, implementation was not an issue, and those who disagreed were deluded, or in the pay of the capitalist class.

The vast reduction in the proportion of the world’s population suffering hunger is partly due to the green revolution (higher-yielding crops and better types of agriculture of the 1950s & 60s – not the organic fad of the rich countries) but mostly due to sustained economic growth promoted by globalization. The growing countries (China & India, along with others) have turned their backs on state control and embraced globalization and let enterprise flourish. A consequence of that growth has been a massive rise in greenhouse gases. A government managed reduction carries the very great risk that the growth will be reversed, with a consequent increase in human suffering far greater than 315,000 live per year. For these reasons, analysis of the impact of climate change need to be better justified before they form the basis of policy decisions.

Other Sources

  1. The Economist made similar comments when the report came out, commenting that the 40% of the increase in disasters is climate change related is arbitrary and also that money thrown at the problem will not necessarily provide answers. They do not point out the risks to the global economy, nor the local solutions to mitigate the impact rather than global reductions in greenhouse gases.
  2. Christopher Booker in the Telegraph said “Then there was the 103-page report launched by Kofi Annan, former UN Secretary-General, on behalf of something called the Global Humanitarian Forum, claiming, without a shred of hard evidence, that global warming is already “killing 300,000 people a year”. But Mr Annan himself had to admit that this report, drawn up by a firm of consultants, was not “a scientific study” but was “the most plausible account of the current impact of climate change”. He contrasts this with recent evidence that the planet has not warmed, and the recent cold winter.
  3. Robert Pielke Jr (c/f wattsupwiththat) gives a more scientific (and thorough) debunking of the basis of the report, concluding “This report is an embarrassment to the GHF and to those who have put their names on it as representing a scientifically robust analysis. It is not even close.” Link broken (02/13) , but referred to by Delingpole in the Telegraph and Climate Depot
  4. Willis Eschenbach in Feb 2013 at Wattsupwiththat, points out that the source of the figure is from Munich Re, the huge reinsurance company. The company has a vested interest in hyping the weather effects of global warming, as false perceptions  of risk leads to a willingness to pay higher premiums, and to over-insure. This in turn leads to larger profits for the insurance industry.
  5. Indur Goklany points to a figure of 141,000 deaths a year from the World Health Organisation. This figure puts it well down the list of risks, may well be excessive, and ignores the reduction in excess cold weather mortality that occurs with milder winters. 
  6. I looked at how the WHO figure of 141,000 deaths per year was estimated, finding a more balanced estimated is virtually zero.

Climate Change Camp – for good or evil?

The Tax Payers alliance have a posting on the Climate Change Camp set up in Blackheath.

 

Here is my comment:-

 

The comment you make is a fair one. Before proscribing a painful and potentially harmful course of treatment, an ethical doctor would

–         check the diagnosis is accurate – both in type and to the extent.

–         Make sure that the treatment is likely to improve the condition of the patient.

In a similar vein

–         The assessment of the extent of the climate change is not helped by failing to examine validity of the data or statistical analysis.

–         Nor by ignoring contrary science.

–         Nor by ascribing every bit of extreme weather to anthropogenic factors.

–         Nor by ignoring the benefits of warming (e.g. less old people dying in the winter cold)

–         Nor by assuming that a global policy is both the best available and that it will improve the situation.

–         Nor by ignoring the harmful effects of oppressive taxes and regulation. You could reduce economic output and bankrupt the government. This could lead to the collapse of public services (with many dying as a consequence) and millions permanently unemployed. In the emerging nations, reduced output will lead to the mass hunger from which many have just escaped. It will also lead to an increase in wars.

 

To establish that climate change is the “biggest threat the world has known” needs substantiation. In the last century the cause of every major famine was either caused authoritarian government policies or by war. On the other hand, global growth ensured that, for the first time in human history, the vast majority of the worlds population can live free from hunger as a normal state of affairs, and each generation can look forward to better livings standards than their parents. For those who believe in peace and helping the poor should make sure that these achievements are not reversed.

Pensions – The Missing Factor

We are told (for instance here and here, the major reason increase in the real cost of pensions (and the consequent demise of private sector final-salary pension schemes) over the last few years are

1. The increase in life expectancy.

2. Changes to accounting rules, meaning that companies have to include future pension liabilities in their balance sheets

3. The low returns from the stockmarket since 2000 – exacerbated in the current recession.

4. In the UK the 1997 Gordon Brown tax on the investment income of pension funds.

But the biggest cause of the rise of the pension deficits is the fall the long-term real rate of interest. This not only impacts on the compound returns to the pension “pot”, but also the size of the annual annuity that can be purchased on retirement. As a consequence, a fall of just 1% in the rate of interest might increase the contributions by 50% to obtain the same size pension. Always low interest rates benefit borrowers to the disadvantage of savers. Like sub-prime, pensions are another long-term hangover from the low-interest party since 2000.

In the UK, as a consequence of the low interest rates and high government spending we now have the following problems.

EITHER – We have low interest rates, meaning those working now have to save more for retirements

OR – We have higher interest rates, meaning higher taxes to fund the ballooning national debt and a steep fall in house prices.

The short-expediency of boosting the economy by low interest rates and deficit spending has reduced living standards for the elderly in the long term.

Cameron fails to understand the Booze Problem

ToryDiary reports David Cameron as saying yesterday

“We need to look at the unbelievable availability of very cheap drink, getting three litres of cider for £1.99, at all hours of day and night. We’ve got to do something about this and I’m exploring what we can do to deal with the drink that’s fuelling so much of the crime in our country.”

Please, please, Mr Cameron can you rise above the thinking of the Labour government?

On my ‘O’ Level economics course I learnt that raising taxes on booze was a good way of raising revenue, as demand is inelastic with respect to price. This is still true, so to plug the budget deficit they could look to raising the tax.

The other side of the coin is that it is a poor way to reduce consumption. For young people it may have more of an impact of their expenditure on alternatives (alcohol in pubs or nightclubs, clothing or car expenditure, or saving). For some it may be a Giffin good. Their consumption will increase on booze at home, and they will spend less on going out.

Minimum price is even worse. You may get people going up market,as the differancial between white cider and better alternatives diminishes. Also the quality may improve. But what will increase massively in the profit per unit to the retailer. Supermarket and Off-licence shares might rise is this is pursued.

 The social problem of alcohol will not be solved by stricter laws or by higher price. It needs a social change. It is only when large numbers of people stop believing that the best way to have a good time is to get totally pissed; and when it is seen as a weakness to lose control of one’s faculties. Then the consumption and the binge drinking will go down.

 Update 23 08 09

The Adam Smith Institute similarly see this as a social problem.

 

Relying on accurate weather forecasts & Fumbling the Statistics

Tim Harford has an interesting blog on weather and the accuracy of forecasts. However, he does not look at two aspects.

1. The Consequence of Reliance

Harford comments

“A recent case in point: Bournemouth’s woes during the bank holiday at the end of May. The Met Office predicted storms, but the beach resort in fact enjoyed the sunniest day of the year. Bournemouth’s tourist office reckons the town missed out on at least 25,000 visitors and more than £1m of revenue as a result. Subtler losses and gains were registered by the would-be tourists, and the lucky ones who enjoyed both a sunny day and a quieter beach.”

Imagine if this had been the USA. Would the BBC have received class-action suits unless every 2 minute weather forecast had the sub-titled with long sentances about only being an opinion, and no responsibility held for the accuracy. Would they also become increasingly like prophesies from the Delphic Oracle?

2. The Statistical Interpretation.

Harford says

MIT economist Michael Greenstone has studied the impact of local temperature surges on deaths in both India and the US. He calculates that a year with one extra “heatwave” day – temperatures above 32°C instead of 12°C-15°C – would raise the annual death rate by eight per million in the US. In India, the temperature vulnerability is more than five times higher, notably in rural areas where agriculture suffers and wages drop.

The population of the USA is around 320 million. So an extra day of heatwave will cause 2.5% of the population to drop dead.

In India the 5 times higher vulnerability means that one-eighth of the population could be wiped out. Or is could mean that the death rate is only one third higher, allowing for the population is 4 nearly times that of the US.

Maybe the USA figure should be 8,000 and not 8,000,000. It is a shame someone cannot sense check these figures, as Harford has some interesting insights on his blog at the FT.

Socialist Economics

 

Tim Worstall has a blog today on the socialist calculation problem. Here he concentrates on the impossibility of collating the data necessary for inputting into computers. This is the only a part of the problem.

 

1. The Relevancy Problem

Mises said (in Human Action). “Knowledge is about the past, decision is about the future” Past information can only be a guide to future decisions. But if any actor acts differently then past information becomes imperfect, unless the changes follow regular patterns – move along known demand and supply curves in economics language. If there is a structural change, then that past information becomes outdated.

 Example – the credit crunch

A major feature concerning the credit crunch is that we have “entered uncharted territory”. That is, the previous macroeconomic models approximations of the economy are incorrect. The relationships that economists have spent years refining are now irrelevant. This is why the government is going to get things wrong in tackling the credit crunch. There is no past data to model, so they are just guessing. Even if they chose the best policies (unencumbered by ideology or political spin), choosing the optimal combination of quantity, time and place is impossible. However, solving for the macroeconomy is much simpler that the millions of products making up the microeconomy.

 

2. The Disequilibrium Problem

To solve the price problem mathematically is to find the solution to the simultaneous equations.

 P = -x1D+a1

P = x2S+a2

 Where P = Price, D = Demand quantity, S = Supply Quantity, x1 = Elasticity of demand, x2 = Elasticity of supply.

 In the real world, the market is rarely in equilibrium. There are so many things changing that a best you can only characterize the “solutions” as transitory and approximate. At worst, they may be a long out. These equations are for each of many millions of products available, and have to be all solved to produce a general equilibrium. If individual calculations are out, then the relative quantities will be out, having a knock-on effect to all other products. If the relative prices are out in one period, then the information for the next recalculation will be out.

 3. The Philosophy of Socialism

 But even with these problems sorted out, socialism is about equality and “fairness”. In other words, the price of labour is not market determined, nor the price of many items – e.g. healthcare, education, food etc. No Socialist Government is going to suppress the democratic will of the masses, to that a dictatorship of a computer. The “socialist solution” means suppressing the very values in which socialists believe.

 Example – Social housing

A socialist system might hold that people should be allocated housing on the basis of need, rather than ability to pay. So a single person would get much smaller accommodation than a large family. If the rent was controlled or housing was free at the point of consumption, people would want to trade housing. A retired couple, whose children had left home may want to trade for a smaller property in a more desirable area. Someone may be willing to pay more rent for a property near to friends, or to their work, or for a something more desirable (with a garden, near to the country, near to the train station etc.). A socialist may want to override these signals with other aims.

 

BNP’s Economic Policy from a 16 year old

I thought I would look into the BNP’s policies to see if they have any depth. On the BNP Chronicle (a blog that slavishly follows the party line, but is not the official mouthpiece of the BNP) is and article on “Why the BNP can get us out of the Recession” by Jason Newton Aged 16. In the light of his being a minor, I will try to inform than put down.

 

The errors are as follows

 

  1. The solution is less exports and imports.

 

“The solution it seems would be to reduce foreign imports and reliance on them. This would not only reduce who would be involved in this mess but also make it more manageable since by the use of Occam’s razor we can deduce that if less countries are reliant on each other the less that can go wrong.”

 

This is incorrect. The Great Depression of the 1930’s was made much worse by the Smoot-Hawley Tariff Act of 1932, where the US Government sought to protect it’s own industries. Other countries retaliated. Industries that faced foreign competition were helped. They could raise prices and increase output. But, when other countries retaliated, the exporting industries suffered. So jobs are gained in some areas, but lost in others. But with less competition, profits are higher. This is fine for the minority, but not for the majority who pay for the profits with higher prices and less choice.

 

  1. Recessions are caused by an excess of Aggregate Demand

 

“A recession is a temporary retraction in the economy. This means that a recession happens when the current aggregate demand of the economy is greater than the total output.”

 

An excess of aggregate demand is a boom that is out of control. In Keynesian theory (to which I do not subscribe) this leads to inflation. John Maynard Keynes wrote that you could get stuck into a depression by a deficiency of aggregate demand – a circular situation where people without jobs have no money to spend, but without people spending no jobs would be created. The current crisis is due to the financial system seizing up. It was caused by two factors. First, a policy in the United States of helping the poor those in high risk jobs to get mortgages (the sub-prime). Second is keeping interest rates too low for too long (they were lowered after the dot.com bubble burst, and again after 9/11, then raised too high in 2005 and 2006). It was like encouraging some teetotalers to drink a beer. Then when they start feeling a little dizzy to have another and turn the music up. The world economy has collectively passed out. They are each waiting their turn for the stomach pump.

 

2. The way out of recession is through investment.

 

Spending more money would increase aggregate demand which is too high in the first place, if it weren’t we wouldn’t be in a recession. We need to cut back on spending and increase investment that, way more goods and services will be produced, and the long-run equilibrium will be at a higher point.”

 

Investment will help recovery out of the recession, but it must be of the right type. The sort of investment that produces real returns, not job creation schemes that will lead to higher taxes forever. The problem is, government expenditure is already out of control. The cut-backs in spending required will depress aggregate demand far more than some investment will increase it.

 

3. There is only a finite level of output.

 

“With this in mind it shows how the bnp will help to create a stable economy and won’t be driven by the ideology that an economy will continue to grow. The world isn’t big enough for us all!”

 

British economic output in total (after adjusting for inflation) is over 2,000 times higher than in 1700. Per person it is 250 times higher. In purchasing power it is 40 times higher than in the poorest countries. Globally in the last millennium, output per person grew by 20 to 30 times (2000% to 3000%). Most of this was in the twentieth century. But in 1900 or 1950, most people would have said the economy can’t grow any more. Further, an economy that does not grow will be an incredibly miserable place to be, Spain from 1940 to 1975, or Portugal 1945 to 1970. The biggest example is India from 1947 to 1990. They shut off the economy to foreign goods & foreign investment. Instead, they sought to control investment and business with a licencing system. The system was corrupt with the political elite prospering, whilst the vast majority were kept poor.

 

Jason. I sincerely hope that you go on to study economics seriously. But do not be fooled by the fancy graphs (or algebra at higher levels). They are but abstractions that can aid understanding, but also provide blinkers to that knowledge.. The real economy consists of billions of people, who by mechanisms that we do not fully understand, in serving their own immediate purposes, also serve the common good. A source of Britain’s Greatness was being the first country who let the market mechanism flourish.