Instead of enacting phenomenally expensive policies, we need to come up with low-cost solutions to global warming that all nations can embrace

Carlos Barria / Reuters Visitors look at the Hongyashan water reservoir on the outskirts of Minqin town, Gansu province, China, on Sept. 20, 2013

On Friday, the U.N. climate panel, the Intergovernmental Panel on Climate Change (IPCC), produced its first overview in six years. It wasn’t about panic and catastrophe, which unfortunately has dominated our climate debate, leading to expensive but ineffective policies.

The IPCC is now extremely certain that more than half of the past six decades’ temperature rise was caused by man. But it does not support the scary scenarios of temperature rises of 9°F or more bandied about by activists — the likely rise over the 21st century is about 1.8°F to 6.7°F. Similarly it makes short shrift of alarmist claims that sea levels will rise 3 ft. to 6 ft. In reality, the IPCC estimates the rise by the end of the century at 1.5 ft. to 2 ft.

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Moreover, little or no temperature rise in the past 15 to 20 years reinforces this moderate message. Since 1980, the average of all the current climate models have overestimated the actual temperature rise by 71% to 159%. This does not mean that there is not some global warming, but it makes the worst scenarios ever more implausible.

Yet, our climate conversation has been dominated by fear and end-of-the-world thinking. While panic is a great way to raise awareness and to win votes, it is a terrible way to ground smart policies.

Remember Al Gore’s movie, An Inconvenient Truth, which was all the rage just seven years ago? His most shown clip vividly illustrated how a sea-level rise of 20 ft. would inundate Florida, along with Beijing and Bangladesh. Yes, it was terrifying. But it had no basis in reality.

Sea-level rise of 1.5 ft. to 2 ft. poses a quite more manageable challenge. For scale, sea levels rose about 1 ft. over the past 150 years. Our forefathers, poorer and less technologically adept than us, handled this challenge quite deftly, and there was no catastrophe — in fact, it is unlikely even to be mentioned in a list of problems of the 20th century.

We need to get back to reality. Yes, global warming is happening. In the long run, it has an overall negative impact. But actually — and surprisingly for many — economic models generally find that moderate global warming is a net global benefit. Worldwide and in almost all regions, many more people die from cold than heat. With increasing temperatures, avoided cold deaths will vastly outweigh extra heat deaths. By midcentury, researchers estimate 400,000 more heat deaths but 1.8 million fewer cold deaths.

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Likewise, CO 2 fertilizes crops and will increase production more in temperate countries than it will slow down crop increases in tropical countries. It will reduce heating costs more than it will increase cooling costs.

A new study by climate economist Richard Tol that is featured in my forthcoming book, How Much Have Global Problems Cost the World?: A Scorecard From 1900 to 2050, shows that since 1900, global warming has been an increasing net benefit for humanity and will peak around 2025 with an annual benefit of about 1.5% of GDP. Only toward the end of the century will global warming turn to a net loss — so while we need to do something, it must be cost-effective.

The problem is that we have been enacting policies that are phenomenally expensive but do little good. Take the world’s most significant climate policy, the so-called EU 20/20. The average of the top economic-energy models show that this policy costs $250 billion annually, mostly in reduced growth. Over the 21st century it will cost about $20 trillion in total. Yet, on a standard climate model, by the end of the century, it reduces the temperature rise by a trivial 0.1°F. For every dollar spent, it avoids 3¢ of global-warming damages.

Perhaps tellingly, the IPCC report got much less attention outside a worried Europe. The U.S. media was entirely consumed with the government’s looming debt-ceiling crisis. Meanwhile, much of the developing world understandably has more important priorities. We need to fix global warming, but we need to find smarter strategies to do so. Economists including three Nobel laureates in the Copenhagen Consensus for Climate found that the smartest, long-term solution would be not to subsidize today’s hugely inefficient green technologies but to focus on innovating to push down the costs of future generations of wind, solar and the many other, amazing possibilities. If future green technology becomes cheaper than fossil fuels, everyone would switch, not just subsidized, well-meaning Westerners.

The moderate new IPCC report ought to make our debate more constructive. Instead of being scared silly, we need to realize that global warming is one of many challenges to tackle during the 21st century and start fixing it now with low-cost, realistic innovation.

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