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PaperclipPerfector  5d ago (text post)   16163 thread views

Culture War Roundup for the week of May 25, 2026

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Every so often, I see a number that strikes me in a particular way. More than once, the way that it strikes me has been in comparison to climate change damage estimates. Yes, yes, there are many many different estimates out there, and they're even presented in different terms, too. Some are in percentage of GDP/GWP; others are dollar figures. One of the numbers that has stuck in my brain, thanks to David Friedman back at the old old old place, comes from one of the early world leaders in trying to produce such estimates, Nobel-winning William Nordhaus. It would take epsilon more effort to find one of his old old old comments at the old old old place, so I just found an example from his substack.

Nordhaus’s final and most important point was based on his own research.

My research shows that there are indeed substantial net benefits from acting now rather than waiting fifty years. A look at Table 5-1 in my study A Question of Balance (2008) shows that the cost of waiting fifty years to begin reducing CO2 emissions is $2.3 trillion in 2005 prices. If we bring that number to today’s economy and prices, the loss from waiting is $4.1 trillion. Wars have been started over smaller sums.

What he does not mention is that his $4.1 trillion is a cost spread over the entire globe and an extended period of time. I initially assumed his calculations of cost were for the rest of the century, making his $4.1 trillion total about $48 billion a year, but in A Question of Balance he appears to be summing over the next 250 years which reduces the annual cost to $16 billion.

It's a quote from Nordhaus' 2012 NYT opinion piece, citing his 2008 book, so yeah, the estimate is quite old. There are many many other estimates out there since then, but this one stuck in my brain. I think he was trying to get it to stick in your brain. "Wars have been started over smaller sums," is meant to do that. It worked.

This morning, Tyler Cowen posted How Much Has Shale Gas Saved U.S. Consumers? It's just quoting an NBER working paper. I'll just reproduce the whole quote, so there's no need to click through:

It may seem like a distant memory now, but as of the mid-2000s, U.S. natural gas production had been flat for a decade, and the U.S. was importing liquefied natural gas (LNG), with plans to import much more. Then shale gas happened. Advances in hydraulic fracturing and horizontal drilling caused U.S. natural gas production to increase significantly, and the U.S. went from being a net importer of natural gas to being the world’s largest exporter. This paper calculates how much shale gas has saved U.S. natural gas consumers. Using price differences between the United States, Europe and Japan, we calculate that U.S. natural gas consumers have saved $3.1-$4.3 trillion between 2007 and 2025, equivalent to $164-$227 billion annually. Access to low-price U.S. natural gas has been particularly valuable during major supply shocks such as the war in Ukraine, and the benefits of shale gas have been experienced broadly across sectors and states.

It's not a direct analog, but that number, though. It's in my brain. $4.1T is right in that range of $3.1-4.3T. That's a swing in one country over less than 20 years, not 250 years. The dynamics of economic systems can move fast, much faster than climate change. But how big of a swing does that 'feel like'? Sure, life would have been more awful in a variety of ways in the counterfactual without the shale revolution. But, like, cataclysmically bad?! End of the world bad? I kind of doubt it.

I don't really like to focus too much on any particular estimate. There are higher ones; there are lower ones. I actually think the entire endeavor of estimating economic impacts of climate change is probably impossible, but we're stuck in a world where we have the various estimates we have and they matter to people. But I never underestimate how difficult the scale of numbers is to folks, so I appreciate when I occasionally see numbers of roughly similar scale in different contexts.

Have you actually examined the details of Nordhaus’ models?

Nordhaus assumed that the majority of the economy (which is to say > 87%) is immune to climate change because it takes place in "carefully controlled environments" (i.e., indoors). That’s an elementary mistake of taking the “climate” to be the “weather.” Climate change can destroy infrastructure, disrupt supply chains and completely upend the availability and distribution of energy and resources, regardless of whether the work occurs under a roof or not.

His math also uses a simple quadratic function to estimate the relationship between rising temperatures and output and his approach is mathematically incapable of adequately capturing tipping points or any non-linear breakdowns. Also the standard discount rates you have in Neoclassical models are bad for the existential timescales involved in climate change. And other economists have actually pointed out that his rates lead to an artificial undervaluation of future damages, and so you can’t accurately estimate economic growth over the long-term habitability of the planet.

The fact that Nordhaus ever won the Nobel Prize is a scientific travesty and sad state of affairs, and behind closed doors was aggressively challenged by others. If you want to understand climate change and why it’s so catastrophic, you have to model and understand the complex interactive feedbacks and it’s abundantly clear that he doesn’t.

Here’s why it’s a problem. (Some basic science)

If you have a steady state equilibrium condition, the first law of thermodynamics (which is conservation of energy) says that inflows of short-wave light into the Earth have to be balanced by energy outflows in the form of infrared heat. Otherwise what happens is the Earth heats up too much or cools down too much. Both of these outcomes are bad. Normally the energy imbalances are small and responses to changes are slow. But now due to human activity, the climate is changing faster than the response to it. One of the problems with comparing the climate at other points in the Earth’s history, is that it doesn’t take stock of cyclical phenomenon like the gains or losses in natural systems like glaciers, forests, deep water, etc. The problem with getting human beings to understand this is most of us have only two modes of psychological operation: complacency and panic.

A better person to listen to and read on this is Nate Hagens (he’s also very entertaining).

Here’s why it’s a problem. (Some basic science)

Slopslopslop.

And not even good slop, no, non-thinking low parameter slop.

If you don’t have the fundamentals you’re not going to understand the rest.

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