Economics, Health, and Global Warming

This article seeks to contribute to the discussion around prioritizing economic health compared to fighting climate change. Here, I’ll argue that the negative health consequences of a weakened economy and significantly under-appreciated.

A recent video showed a group of vandals destroying a Van Gogh painting. Apparently, this was supposed to be a climate change protest. The video stated that “there are very few things that are not justifiable when it comes to protesting climate change because [climate change] will lead to millions of people dying.” I replied that some economists think global warming will lead to an increase in farmable and habitable land, so it’s not clear that we can causally attribute any net deaths, let alone millions, to climate change.

If we ignore the important qualification of “net” on deaths, then yes, there are many studies linking climate change to a variety of death counts in a variety of ways. One article from the EPA identifies “more than 1,300 deaths per year in the United States are due to extreme heat” and another article from the EPA states that “more than 19,000 Americans have died from cold-related causes since 1979.” At the global level, the World Health Organization forecasted that “Between 2030 and 2050, climate change is expected to cause approximately 250 000 additional deaths per year, from malnutrition [and other reasons].”

These numbers are serious and tragic, but they pale in comparison to current and future death counts directly attributable to a weakened economy. In addition to an outright loss in face-value comparison, the analyses from the EPA and the WHO have additional issues:

  1. Some researchers indicate that nutrition per capita could improve due to global warming. It’s not an accurate comparison to count nutrition harm without also counting nutrition gains.
    1. As an example, David Friedman here mentions that IPCC estimates of possible global warming would be associated with a 20-30% increase in crop yield, the benefit of which is ignored in standard analyses like the WHO analysis.
    2. Policy interventions designed to solve climate change have negative side effects on the economy and so contribute to malnutrition by reducing incomes, raising prices, reducing innovation, and so on. Malnutrition doesn’t solely result from climate change, it also results from trying to prevent climate change. Counting malnutrition in one case and not comparing it against malnutrition in the other case is not an accurate counterfactual analysis. It results in an overestimation of the gains from policy.
  2. IPCC estimates on long-term global warming potential tend to be revised toward zero over time. Initial estimates tend to be more fantastic than the realized values and later estimates. Similarly, long-range forecasting from WHO may exaggerate.
  3. Government bodies generally are subject to regulatory capture, all sorts of negative biases documented in the public choice literature, and particularly tend to favor results that would grow the sizes of government and their own agencies. In the case of climate change, that is, they would be expected to exaggerate the would-be state of the world in the absence of intervention and ignore autonomous solutions from the free market.
  4. Substantial amelioration of climate change has already occurred on the market. The idea that climate change is a problem and therefore destruction of art, private property, and government intervention are automatically optimal solutions is absurd. Government policy in general is a failure, why would climate regulation be a special case?
  5. In the same link provided above, David Friedman also notes that net deaths from extreme temperatures should decrease in the case of global warming because deaths from cold are more numerous and they would be less common in a warm world.

Contrast those tiny numbers with the massive number of individuals that die monthly, not annually, due to poverty and related conditions. Suicide, homicide, starvation, war, mental illness, developmental issues, reduced medical care, inability to research new medical advances, and many other issues are directly attributable to a stagnated economy. Various estimates:

  1. “A 5% reduction in GDP per capita in 2020 was estimated to cause an additional 282,996 deaths in children under 5” in this analysis that only involved 129 of the world’s 195 countries.
    1. About 27% of the US population is under age 5, and the World Bank estimates under 27% of the global population is under age 14, so conservatively 4x the 282k death number, and notice that even before multiplying, the original number was already larger than the total of deaths forecasted to climate change.
    2. The world population is generally expected to grow, so a death now is equivalent to more than one death in the future (accounting for the growth rate). Today there are 7.75 billion people in the world and the UN expects 8.6 billion in 2030 and 9.8 billion in 2050.
  2. According to a Harvard Study, “The economic crisis of 2008-10, and the rise in unemployment that accompanied it, was associated with more than 260,000 excess cancer-related deaths”
    1. To reiterate: This is cancer deaths alone! Cancer is only one of myriad health concerns that contribute to mortality and are linked with economic health.
    2. This study only counted deaths in OECD countries! The OECD only includes 38 member countries and over 190 countries are recognized in the world. The OECD accounts for less than half of the global GDP. In short: This study vastly underestimates the death count attributable to a weakened economy.

Thinking beyond simplistic ideas of minimizing carbon emissions or maximizing single measures of any kind leads us to realize an evergreen truth of policy, engineering, and economics: Choices involve tradeoffs. In turn, we need to look at specific choices to understand the specific tradeoffs. In particular: Even a meager 5% reduction in GDP seems to be far more harmful than the problems climate change would introduce by 2050. So we must ask: Do particular plans to mitigate climate change cost more or less than 5% of GDP?

One answer: The market is already voluntarily seeking to reduce climate change at a cost of zero to the taxpayer. That is, without policy intervention. According to the EPA, “U.S. greenhouse gas emissions decreased from 2019 to 2020 by 9 percent,” so our contribution is already declining with no further action needed. Now consider a particular policy on the current stage of debate in the US: AOC’s Green New Deal. This proposal has cost estimates between 6.6 and 93 trillion dollars. According to the BEA, the nominal GDP in 2020 was $20.94 trillion, making AOC’s bill conservatively in excess of 25% of GDP. Demonstrably dangerous, and not demonstrably able to impact global climate change trends over the period from 2030 to 2050 and beyond.

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