Fallacies Galore in Ridley's Scarcity Fallacy

A weekend ago, Matt Ridley wrote an engaging piece for the Wall Street Journal that was originally titled "The Scarcity Fallacy" - the title has since changed to "The World's Resources Aren't Running Out". The basic thesis of his essay is this:

Ecologists worry that the world's resources come in fixed amounts that will run out, but we have broken through such limits again and again

In the body of his essay, Ridley says:

Ecologists call this "niche construction"—that people (and indeed some other animals) can create new opportunities for themselves by making their habitats more productive in some way. Agriculture is the classic example of niche construction: We stopped relying on nature's bounty and substituted an artificial and much larger bounty.

Economists call the same phenomenon innovation. What frustrates them about ecologists is the latter's tendency to think in terms of static limits. Ecologists can't seem to see that when whale oil starts to run out, petroleum is discovered, or that when farm yields flatten, fertilizer comes along, or that when glass fiber is invented, demand for copper falls.

...and adds:

I nowadays lean to the view that there are no limits because we can invent new ways of doing more with less.

I tend to generally agree with Ridley's premise that innovation of various kinds has allowed us to extend the use of resources or find alternate ways to meet our needs. I very much share this optimistic view of humanity and future possibilities.

That said, some of the claims in his essay made me wonder how well researched the essay is and how accurately it represents the facts or mainstream views on some of the areas of discussion. Since I write now and then on climate change, I figured I'd pick that as an example to discuss Ridley's essay - sure enough, a quick read of Ridley's claims makes it evident his discussion is amazingly superficial and creates many fallacies of its own in terms of how it represents the scientific/economic thinking on this subject. In fact, I would not be surprised if his discussion of topics other than climate change were likely as superficial and fallacy-ridden, because the last time he wrote on similar subjects in 2012, the claims were problematic to say the least.

Let's start with these two passages in his current essay (I've highlighted some portions in bold text):

This disagreement goes to the heart of many current political issues and explains much about why people disagree about environmental policy. In the climate debate, for example, pessimists see a limit to the atmosphere's capacity to cope with extra carbon dioxide without rapid warming. So a continuing increase in emissions if economic growth continues will eventually accelerate warming to dangerous rates. But optimists see economic growth leading to technological change that would result in the use of lower-carbon energy. That would allow warming to level off long before it does much harm.

It is striking, for example, that the Intergovernmental Panel on Climate Change's recent forecast that temperatures would rise by 3.7 to 4.8 degrees Celsius compared with preindustrial levels by 2100 was based on several assumptions: little technological change, an end to the 50-year fall in population growth rates, a tripling (only) of per capita income and not much improvement in the energy efficiency of the economy. Basically, that would mean a world much like today's but with lots more people burning lots more coal and oil, leading to an increase in emissions. Most economists expect a five- or tenfold increase in income, huge changes in technology and an end to population growth by 2100: not so many more people needing much less carbon.

Dictionary.com defines "fallacy" as follows:

1. a deceptive, misleading, or false notion, belief, etc.: That the world is flat was at one time a popular fallacy.
2. a misleading or unsound argument.
...

Ridley's two passages that I excerpted above promote some key fallacies of their own - by leaving readers with a very misleading impression of what the ecologists, scientists and economists who are part of the IPCC actually believe. In my view, the fallacies propagated by Ridley are that:

1. The IPCC [merely] forecasted that "temperatures would rise by 3.7 to 4.8 degrees Celsius compared with preindustrial levels by 2100"
2. The IPCC assumed that in 2100 we would have a world "basically....much like today's"
3. There is a disagreement between "pessimists" and "optimists" (presumably in the scientific/economic communities) about the ability of technological change to "result in the use of low-carbon energy" that "would allow warming to level off long before it does much harm"

The fact that these are just fallacies in Ridley's essay become abundantly clear if one takes some time to quickly peruse through some of the high-level summaries that are freely available online from the IPCC Fifth Assessment Report (AR5) - all published prior to Ridley's article appearing in the WSJ. Specifically, we could refer to:

• Climate Change 2013: The Physical Science Basis [published in 2013 by the IPCC Working Group I or WGI]
• Climate Change 2014: Impacts, Adaptation, and Vulnerability [published earlier this year by IPCC WGII]
• Climate Change 2014: Mitigation of Climate Change [also published earlier this year by IPCC WGIII]

The first and second fallacy created by Ridley are easily addressed. The IPCC has always provided several projections (or scenarios) of future global temperatures with assumptions tied to each projection (or scenario) clearly stated. These scenarios are usually referred to using the acronym RCP - that stands for Representative Concentration Pathway - and the typical scenarios shown by the IPCC are discussed here along with their assumptions. More specifically, here is a key chart (Fig. SPM.7) included by the IPCC WGI in their Summary to Policy Makers:

As we can see, the IPCC did not merely project that temperatures in 2011 would rise by 3.7 to 4.8 degrees C compared to preindustrial levels by 2100 based on an assumption of rough status quo compared to today. They modeled and projected multiple scenarios, each with differing assumptions - including one where global temperatures change only slightly from where they are today, under the assumption that methods and approaches to cap and reduce emissions over time are put in place.

This leads us to Ridley's third fallacy - which suggests there is a disagreement between pessimists and optimists and that pessimists are not bought in to the worldview that technological changes and innovations could allow warming to level off. This must be news to the folks at the IPCC because, if anything they've done a remarkable amount of work to provide insight into what can be done to mitigate and reduce emissions and the associated economic costs.

In IPCC WGIII Summary for Policy Makers points out several things.

Firstly, the authors reflect the high-confidence scientific view of what we should expect if we basically allow the status quo to continue. This is very important in order to give policy makers and average people a sense for the gravity of the problem we are facing today:

Without additional efforts to reduce GHG emissions beyond those in place today, emissions growth is expected to persist driven by growth in global population and economic activities. Baseline scenarios, those without additional mitigation, result in global mean surface temperature increases in 2100 from 3.7 to 4.8°C compared to pre-industrial levels¹⁰ (median values; the range is 2.5°C to 7.8°C when including climate uncertainty, see Table SPM.1)¹¹ (high confidence).

Secondly, rather than stopping at that (shocking) baseline, they go into an extensive discussion on mitigation pathways:

There are multiple scenarios with a range of technological and behavioral options, with different characteristics and implications for sustainable development, that are consistent with different levels of mitigation. For this assessment, about 900 mitigation scenarios have been collected in a database based on published integrated models.¹⁴

Thirdly, they specifically call out a high-confidence pathway to cap global temperature rise:

Scenarios reaching atmospheric concentration levels of about 450 ppm CO2eq by 2100 (consistent with a likely chance to keep temperature change below 2°C relative to pre-industrial levels) include substantial cuts in anthropogenic GHG emissions by mid-century through large-scale changes in energy systems and potentially land use (high confidence). Scenarios reaching these concentrations by 2100 are characterized by lower global GHG emissions in 2050 than in 2010, 40% to 70% lower globally¹⁶, and emissions levels near zero GtCO2eq or below in 2100. In scenarios reaching 500 ppm CO2eq by 2100, 2050 emissions levels are 25% to 55% lower than in 2010 globally. In scenarios reaching 550 ppm CO2eq, emissions in 2050 are from 5% above 2010 levels to 45% below 2010 levels globally (Table SPM.1). At the global level, scenarios reaching 450 ppm CO2eq are also characterized by more rapid improvements of energy efficiency, a tripling to nearly a quadrupling of the share of zero- and low-carbon energy supply from renewables, nuclear energy and fossil energy with carbon dioxide capture and storage (CCS), or bioenergy with CCS (BECCS) by the year 2050 (Figure SPM.4, lower panel). These scenarios describe a wide range of changes in land use, reflecting different assumptions about the scale of bioenergy production, afforestation, and reduced deforestation. All of these emissions, energy, and land-use changes vary across regions.¹⁷ Scenarios reaching higher concentrations include similar changes, but on a slower timescale. On the other hand, scenarios reaching lower concentrations require these changes on a faster timescale. [6.3, 7.11]

Fourthly and finally, they take the extra step of estimating the economic impact of the mitigation pathway to cap global temperature rise:

Estimates of the aggregate economic costs of mitigation vary widely and are highly sensitive to model design and assumptions as well as the specification of scenarios, including the characterization of technologies and the timing of mitigation (high confidence). Scenarios in which all countries of the world begin mitigation immediately, there is a single global carbon price, and all key technologies are available, have been used as a cost-effective benchmark for estimating macroeconomic mitigation costs (Table SPM.2, green segments). Under these assumptions, mitigation scenarios that reach atmospheric concentrations of about 450ppm CO2eq by 2100 entail losses in global consumption—not including benefits of reduced climate change as well as co-benefits and adverse side-effects of mitigation¹⁹—of 1% to 4% (median: 1.7%) in 2030, 2% to 6% (median: 3.4%) in 2050, and 3% to 11% (median: 4.8%) in 2100 relative to consumption in baseline scenarios that grows anywhere from 300% to more than 900% over the century. These numbers correspond to an annualized reduction of consumption growth by 0.04 to 0.14 (median: 0.06) percentage points over the century relative to annualized consumption growth in the baseline that is between 1.6% and 3% per year. Estimates at the high end of these cost ranges are from models that are relatively inflexible to achieve the deep emissions reductions required in the long run to meet these goals and/or include assumptions about market imperfections that would raise costs. Under the absence or limited availability of technologies, mitigation costs can increase substantially depending on the technology considered (Table SPM.2, orange segment). Delaying additional mitigation further increases mitigation costs in the medium to long term (Table SPM.2, blue segment). Many models could not achieve atmospheric concentration levels of about 450 ppm CO2eq by 2100 if additional mitigation is considerably delayed or under limited availability of key technologies, such as bioenergy, CCS, and their combination (BECCS). [6.3]

Here's the amazing part of what the IPCC said - assuming certain innovations, technologies and practices can be adopted in time, the economic cost to humanity is estimated to be ~0.04 to 0.14% points on an annual growth baseline of 1.6 to 3.0%. In other words, the mitigation cost is in the noise level of our growth - virtually nil. That is an amazingly low mitigation cost to prevent planetary-level human catastrophe in the second half of this century. If that isn't an optimistic message from our foremost experts in the world (scientists and economists) I don't know what is.

Ridley ends his essay with this:

If I could have one wish for the Earth's environment, it would be to bring together the two tribes—to convene a grand powwow of ecologists and economists. I would pose them this simple question and not let them leave the room until they had answered it: How can innovation improve the environment?

Sad to say, this is absolutely not the right question to ask simply because ecologists, scientists and economists have been doing exactly what Ridley asks of them and have repeatedly highlighted ways to move faster on technology and mitigation to solve the world's environmental challenges. As I discussed above, the IPCC WGIII report goes into considerable detail discussing not just the climate change challenges to be overcome but also ways to mitigate them meaningfully. The fundamental issue is not the lack of will or ideas in these communities. The fundamental issues as I see it are twofold:

• Certain fossil-fuel interests have ridiculous sums of money invested in the status quo and have been going to great lengths to deliberately confuse or mislead people and policymakers about the realities of climate change
• Driving the kind of mitigation envisioned by our scientists and economists requires nationally and internationally coordinated, non-partisan, policy measures to reduce net carbon emissions - which has been very challenging in an atmosphere of both partisan agendas as well as legitimate differences of views across the developed and emerging economies of the world

One can understand this pictorially in a simple chart from the IPCC WGIII - reproduced below - that highlights the investment changes required to cap global carbon emissions and by extension global warming.

Notice the required large negative change in fossil fuel investment flows?

• This is a huge problem for some of the executives of companies that are in those industries - given their future profit flows will be massively impacted by this.
• This is also - quite understandably - very problematic for many developing or emerging economies that currently depend heavily on fossil fuels to enable their own economic growth.

So where does that leave us?

I guess I'd like to end by saying that if I could have one wish for Matt Ridley it would be this:

Rather than discuss largely imaginary disagreements in well-intentioned essays, would he consider directing more of his attention towards:
(a) getting non-partisan political support in the US and elsewhere to
(b) accepting the high-confidence scientific consensus on the onerous future for humanity if we do nothing different from today (including enormously wasting scientists' time trying to defend what we know for a fact) and
(c) acting quickly to support the various mitigation actions in terms of migrating to newer technologies and land use patterns that have already been identified by scientists and economists as a pathway to keep humanity in good shape?

P.S. The main reason I wrote this post is that this is not the first time Matt Ridley has mangled basic facts on climate change nor is it the first time he has presented a thesis on the need to rise above scientific alarmism using incorrect information. His WSJ op-ed aims to present a hopeful picture for humanity. That is certainly welcome and well intentioned - but one cannot solve these types of problems if the problem statements one starts with are either fundamentally wrong or badly distorted.