How climate change panic costs us trillions, hurts the poor, and fails to fix the planet

by Bjorn Lomborg

(Basic Books: 2020)

Reviewed by Thomas P. Sheahen

Danish Economist Bjorn Lomborg is already well known for eight other books at the intersection of economics and public policy. “The Skeptical Environmentalist,” published in 2001 established him as a perceptive observer of the cost of addressing the world’s environmental problems. He provided evidence to show that, with prosperity, civilization is addressing the major environmental issues.  

Lomborg’s attention to the numbers hidden beneath the slogans gave his analysis a credibility that could not be brushed aside, to the chagrin of some prominent politicians and environmental organizations of the time.

Lomborg’s facility in using simple language to explain economic concepts is put to work once again in this new book “False Alarm,” which is devoted to the topic of climate change.

His first chapter, entitled “Why do we get climate change so wrong?” warns the reader to anticipate a critical examination of prevailing public beliefs about climate change.

That critical examination compares exaggerated headlines with numerical realities in a very sober way, using graphs to condense large quantities of data into clear presentations. 

His fifth chapter asks, “What is global warming going to cost us?”

Rather than enumerate big numbers with lots of zeroes, Lomborg displays the expected costs as a percentage of global GDP (Gross Domestic Product), which gives a much better representation of the relative importance of climate-related costs. That writing technique holds the reader’s attention, as contrasted to the glaze-over effect of many economic treatises about world issues.

In a cluster of 5 chapters, Lomborg addresses “How not to fix climate change.”

With his global perspective on economics, he explains why strategies like the Paris Accord won’t work.

Chapter 10 “How climate policy hurts the poor,” is perhaps the most important chapter in the book.  

After recognizing the projected multi-trillion costs of proposed global climate strategies, Lomborg then presents to us the real numbers pertaining to real poor people. Toward the end of the chapter, he reminds us that

“Today there are about 650 million extremely poor people in the world.”

He then summarizes:

“It turns out that the theoretical cost to lift everyone on the planet out of extreme poverty would be less than $100 billion per year. Compare this to our current trajectory: we’ve committed to spending $1 trillion to $2 trillion a year just on the almost entirely ineffective Paris Accord. 

“Every month the cost will be the same as the amount that could lift everyone from extreme poverty. This strikes me as obscene. As rich countries commit to going carbon-neutral, the cost will escalate to tens of trillions of dollars per year, to make a small temperature change in a century’s time. 

“Just a couple of days of these new, higher costs could transform the world by ending extreme poverty entirely.”  

Lomborg’s figures are correct; his explanation is clear; his argument is compelling.  It is obscene to continue on such an international spending trajectory.

The fourth major block of the book, “How to fix climate change,” presents several much better ways to approach the climate change problem. 

Bear in mind that Lomborg definitely believes that mankind’s production of CO₂ is harmful, because it will cause the global temperature to rise.

Lomborg employs the economic model named DICE, primarily associated with Nobel-prizewinning economist William Nordhaus, to analyze a proposed tax on CO₂ emissions.

The consecutive figures in chapter 11 show the different costs of achieving certain temperature-change targets, culminating in the very important Figure 11.7.

There the “optimum” solution is compared with the cost of achieving certain smaller temperature changes, and with the cost of doing nothing.

It turns out the “optimum” and the “do nothing” options differ by only a small temperature margin (0.36 C) and a small change in costs (97.4% of total global GDP vs 97.0%). 

Those differences are both entirely within the “noise level” of any world-forecasting economic model.  Lomborg does not draw attention to that point, but it’s clear to the attentive reader that there is no point at all in further considering a “carbon tax.”

In consecutive chapters Lomborg stresses the value of investing in R&D. 

The gloomy presumption that we’re stuck with existing conditions has never been true before.  He cites examples of how innovation has changed our lives in many ways, and it is reasonable to expect more innovations in the future.  It’s not a zero-sum game.  

Adaptation (as contrasted to mitigation) is what mankind has always done before, and it’s both simple and inexpensive. Lomborg also endorses spending money doing research on geo-engineering, but he doesn’t want to implement any such schemes yet.

Most important of all, however, are actions that advance prosperity. Trade-offs are always necessary but helping the poor rise out of poverty is much cheaper and more effective than any other plan to protect the environment. 

Policies aimed at reducing human greenhouse-gas emissions

“… cost us resources that could have been spent making people’s live healthier, longer, and more prosperous.  If we focused some of these resources on effective development and human capital investments, then people would be more able to afford expensive green energy sources and more capable of investing in adaptation.  As a society, we would have more money to respond to climate change.” 

— Again, not a zero-sum game.

In his final chapter, Lomborg emphasizes the importance of improving the world, and underlines the inevitability of trade-offs. He points to the low cost of addressing problems like malnutrition and tuberculosis, which are under-funded.

He laments that “…one-fourth of aid today is diverted to climate aid projects.”  Among other things, he strongly supports free trade, because it is also a smart climate policy.

At the end, it is clear why this book is entitled “False Alarm”: “Fixating on scary stories about climate change leads us to make poor decisions. … Overspending on bad climate policies doesn’t just waste money, it means underspending on effective climate policies and underspending on the opportunities we have to improve life for billions of people, now and into the future.  That’s not just inefficient. It’s morally wrong.”

Lomborg has a compelling case, and he makes it quite clearly with common-sense reasoning, a grasp of numerical values, and a comfortable writing style. It contains no equations, only graphs. 

Everyone who is concerned about pursuing the best approach to climate change will find merit in reading this book. It certainly could be used in an undergraduate college course that addresses climate issues.  It is also accessible to sharp high-school readers, especially those whose classmates are fearful of their future because of the changing climate.

Review

“Lomborg does not lack solutions. In False Alarm, he advocates a range of cost-benefit tested policies to address both climate change and global poverty…. Lomborg does a service in calling out the environmental alarmism and hysteria that obscure environmental debates rather than illuminate them.” ―National Review

“Meticulously researched, and well worth a read.” ―Forbes

“An important book. Mr. Lomborg is a long-standing environmentalist regarded as a heretic by hardliners in the movement because he is an optimist who says that humanity is not doomed.” ―Iain Martin, The Times (UK)

“The best way to deal with global warming is to increase global prosperity…. The choice we face, Lomborg writes, is between a human future driven by fear and one driven by ingenuity. On that, he is exactly right.” ―The Bulwark

“Lomborg’s most basic premise remains that there are better ways to alleviate human misery than spending taxpayer subsidies than on panic-driven, political non-solutions to a changing climate. Few would argue with that goal.” ―American Thinker

“Lomborg brands climate change warnings as alarmist and argues that a massive reduction in fossil fuels would exacerbate global poverty, in this detailed account…. Lomborg is careful to back his cost-benefit analyses of climate policies with surveys and statistics.” ―Publishers Weekly

“[Lomborg] follows his previous critiques of climate change policy…with a hard-hitting analysis of failing strategies for addressing what he acknowledges is ‘a real problem.’…A serious, debatable assessment of a controversial global issue.” ―Kirkus

“Bjorn Lomborg’s new book offers a data-driven, human-centered antidote to the oft-apocalyptic discussion characterizing the effect of human activity on the global climate. Careful, compelling, and above all sensible and pragmatic.” ―Jordan Peterson, author of 12 Rules for Life

“This is a very important and superbly argued book. Those who have been persuaded that climate change is not happening, and those who think catastrophe is imminent should both read it and know they can rely on Lomborg’s meticulous analysis to put them right. The rest of us can be alarmed by his relentless revelation that the world is spending a fortune on making the plight of the poor and the state of the environment worse with foolish and expensive policies.” ―Matt Ridley, author of How Innovation Works

“False Alarm is a timely and important book. Based on the latest scientific evidence and rigorous economic analysis, it provides a welcome antidote to widespread, irrational panic about a coming climate apocalypse. Instead, it provides a set of smart, rational policies for addressing global warming — while not losing sight of the myriad other problems that beset our planet, including poverty and inequality. This book is essential reading for anyone who cares about our shared human future.” ―Justin Yifu Lin, former chief economist, the World Bank

About the Author

Bjorn Lomborg is the best-selling author of The Skeptical Environmentalist and Cool It. He is a visiting professor at Copenhagen Business School and at the Hoover Institution at Stanford. His work appears regularly in New York Times, Wall Street Journal, the Economist, the Atlantic, and Forbes. His monthly column appears in around 40 papers in 19 languages, with more than 30 million readers. In 2011 and 2012, Lomborg was named Top 100 Global Thinker by Foreign Policy. In 2008 he was named “one of the 50 people who could save the planet” by the Guardian. He lives in Prague.

TOP 1000 REVIEWER

5.0 out of 5 stars The moral, human costs of environmentalist panic–from the perspective of an environmentalist

Reviewed in the United States on July 14, 2020 Bjorn Lomborg made waves in 1990s with The Skeptical Environmentalist, bucking against the conventional wisdom of environmental alarmists. His new book “False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet” updates this message. Global warming and environmental issues are not easy issues, but Lomborg has a rather simple message.

First of all, Lomborg is not a “climate change denier” who hates science and rejects the mainstream scientific consensus that the earth is warming. His message is this: “climate change is real,” and “global warming is mostly caused by humans,” but “fears of a climate apocalypse are unfounded. Global warming is real, but it is not the end of the world.”

Lomborg wants scientists and their willing accomplices in the press to dial back the panic, and put in place policies and strategies that will actually address problems related to global warming, not waste money trying to reduce carbon emissions. Most policies designed to address carbon emissions are exceedingly costly with minimal impact on temperature change. For example, on the question of rising ocean levels and the risk of low-lying areas being permanently flooded, Lomborg argues that the cost of building dikes and flood control measures is minuscule compared to losses from any potential flooding. Similarly, when a drought or famine occurs, many will respond by calling on reduced carbon emissions to address warming, but the impact of those measures is insignificant, and a much smaller investment can address poverty and food production in affected areas.

But the larger point is that the alarmists are simply wrong about the impact of global warming.

“Deaths caused by climate-related disasters have declined precipitously over the past century.” “Is extreme weather causing more damage to human life? The answer is a resounding no.” “The incidence of flooding is not on the rise, nor is there any evidence that global warming has led to more floods.” And when the media and scientists promote an alarmist perspective, it “leads to policies that while well intentioned, crowd out much more effective ways of helping people.”

The ways we have tried to address climate change have not been effective. Lomborg concludes that “today’s popular climate change policies of rolling out solar panels and wind turbines have insidious effects; they push up energy costs, hurt the poor, cut emissions ineffectively, and put us on an unsustainable pathway where taxpayers are eventually likely to revolt. Instead, we need to invest in innovation, smart carbon taxes, R&D into geoengineering, and adaptation.” His perspective also places the human condition at the center.

“We can improve the human condition far more by opening the world to free trade, ending tuberculosis, and ensuring access to nutrition, contraception, health, education, and technology.”

Lomborg rejects mainstream responses to global warming while accepting the mainstream view that global warming is a real, man-made problem with serious consequences. He just wants the scientific and public policy decision makers to stop and examine the costs and benefits of policies they promote. To many are costly and ineffective.

To him, the problem is not simply that resources are being wasted, but that diverting funds from “opportunities we have to improve life for billions of people” is “morally wrong.” I wish I had confidence that U.S. political and thought leaders shared this perspective.

This book like Apocalypse Never uses a solid approach to assessing the impact of climate change, climate change policy and misreporting of climate change reality. It’s sometimes hard to work through the data, so the book would be significantly improved by a summary showing exactly how little will be achieved by the Paris accord and similar massively expensive policy solutions.

The bottom line is that climate change is being overblown by media looking for readers, by politicians looking for votes and by green organizations looking for subsidies and beneficial regulations. A more rational approach is needed, for sure. His proposals are interesting. His data are also interesting, but data rarely convinces religious followers of the climate gods. They are caught up by emotion and not susceptible to factual arguments. Good book, though.

First off, Lomborg gives away the store by claiming a scientific consensus. Page 6 states:

“Scientists agree that global warming is mostly caused by humans, and there has been little change in the impacts they project for temperature and sea level rise.”

This is false. There are many projections as the common spaghetti graph chart of models demonstrates.

Second, Lomborg refers to “pre-industrial revolution temperatures” as some sort of baseline for the planetary average global temperature he would posit as some sort of ideal even though the industrial revolution began in the middle of the Little Ice Age.

And what pre-industrial revolution temperature was the norm? That of the Medieval Warm Period? And what exactly would the ideal temperature for a geo-engineered climate be?

Because these are tough questions, natural climate variability denialism has become popular among hysterics but Lomborg pays no attention. Worst, Lomborg claims that there is some kind of consensus that by 2100 the average global temperature will be 7.2 degrees F warmer than ?? but that is the RCP 8.5 projection and if there is any consensus at all it may be that the RCP 8.5 projection is highly unlikely and useless to policy makers.

But other than those minor quibbles, the book is a useful refutation of a lot of the drivel the public is so regularly subjected to.

False Alarm (Amazon)