The more carefully you analyze what it makes sense to do about climate change, the more clear it becomes that on average government policies make things worse.
Here is link to an example of a more careful analysis by Ross McKitrick. It's worth reading the entire analysis.
Some excerpts follow.
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IntroductionI hold a Ph.D. in Economics from the University of British Columbia where I specialized in natural resource and environmental economics. At the University of Guelph I have, for 25 years, taught courses in environmental economics and policy, econometrics and microeconomic analysis.
Canada is a world leader in finding ways to protect the environment while maintaining growth in economic opportunities and living standards. Over my lifetime we have achieved impressive gains in air quality and resource management, reductions in water pollution and preservation of wilderness; while simultaneously supporting a growing population and attaining steadily-increasing real income levels. Achieving such outcomes depends upon making sound policy choices, and I hope that the information learned through these hearings will assist your Committee as you aim to do so.
While most of my research is aimed at peer-reviewed academic publications I have also written extensively in the public domain, including think tank reports and media op-eds. Anyone familiar with my writings will know that I have certain biases, which I can summarized very simply. I believe that policies should be evaluated in an economic framework that identifies options where the benefits exceed the costs. As much as possible, we should try to avoid imposing cures that are worse than the disease. In this regard it needs to be emphasized that not every environmental goal is sufficiently valuable to be worth the cost of achieving it, and when a goal has been chosen it is incumbent on policy makers to try to achieve it at the lowest possible cost. Because we live at a time when there is a great deal of enthusiasm for setting ambitious goals around greenhouse gas reductions, yet most climate policies cost more than mainstream estimates of the benefits of reducing greenhouse gas emissions, it tends to fall to someone like me to point out that most climate policies under current technology do not pass cost-benefit tests. Although I often find myself in settings in which I am the only person pointing this out, I don’t want you to think it is an unusual position for someone in my field to hold. As one climate researcher recently pointed out:
Mainstream climate economics takes global warming seriously, but perplexingly concludes that the optimal economic policy is to almost do nothing about it… The contrast is striking. While climate science is sending out loud-and-clear messages that fossil-fuel disinvestment must start now, letting go of coal and oil and diverting resources into renewable energy technology systems, to keep warming below the 2°C limit (IPCC 2014), mainstream climate economics claims that overly ambitious climate targets will unnecessarily hurt the economy and immediate de-carbonization is too expensive. Most climate economists thus recommend humanity to just wait-and-see. (Storm, 2017)
At times the economic message is unpopular but let me give you an example of the costs of ignoring it.
In Ontario we are living with the consequences of a series of bad policy decisions made between 2004 and 2014 concerning the electricity sector. Enthusiasm for phasing out coal power and adding large amounts of wind and solar capacity, combined with uncritical acceptance of claims that doing so would create jobs without raising costs, put us on a path of rapidly rising electricity commodity prices relative to competing jurisdictions. The Province of Ontario began subsidizing electricity to stem an exodus of manufacturing and relieve hardships on households. A new report1 from the CD Howe Institute estimates that these measures now cost the province $6.5 billion annually. This is $700 million more than Ontario spends annually on Long Term Care facilities.
Think about that. The cost of a few bad energy policy decisions is not simply abstract dollar amounts on paper, it is the lost opportunity to expand and improve Long Term Care for seniors and severely disabled individuals in Ontario. This trade off was not necessary and could have been avoided.
The key concept to bear in mind is opportunity cost: the value of what you will give up to obtain the benefit you are after. Your committee is studying policy options that could potentially do to Canadians’ transportation costs what Ontario did to its citizens’ electricity costs. In an atmosphere of high enthusiasm for declaring ambitious greenhouse gas reduction targets without regard to costs, it can be unpopular to point out that not every goal is worth pursuing, sometimes the price is too high, and even climate policy has opportunity costs. Ontario is living with the consequences of policy makers being unwilling to acknowledge these things fifteen years ago.
Conclusion: The Costs of Inaction
People who want to circumvent cost-benefit analysis often appeal to the “costs of inaction” and they say something like “we can’t afford not to.” They might cite estimated costs of extreme weather or climate damages over the coming century as a contrast to the costs of the policy. Let’s suppose the amount is very large and indeed is far higher than the costs of the proposed biofuels policy. The problem is the comparison is irrelevant. The proper comparison is this:
[The costs of climate change over the coming century without the policy]
versus
[The cost of climate change over the coming century with the policy]
+
[The cost of the policy]
These are the kinds of cost comparisons economists like William Nordhaus undertake and the results inevitably argue against aggressive mitigation policy. The problem is that the policies we are talking about, up to and including full compliance with Paris (or Kyoto before it) have such small effects on the climate that when standard climate models are run with and without the policies, the accumulation of CO2 in the atmosphere and the resulting costs of climate change come out about the same (Wigley 1998, Lomborg 2016).
Don’t forget that as we pile costs upon ourselves from these aggressive climate policies, our geopolitical rivals, chiefly Russia and China, are rapidly expanding their fossil fuel-based infrastructure and more than offsetting the small effects of our actions. We incur all the costs of our climate policies, and the world sees no change in emissions. Russia and China are also financing fossil fuel-based capacity investments in developing and developed countries alike, occupying the role abandoned by the west in its pursuit of fossil fuel “divestment” and thereby acquiring a considerable amount of international geopolitical dominance. It strikes me as very unwise to squelch our own domestic oil and gas industry and weaken ourselves economically while hostile foreign entities use their own energy assets to secure a position of dominance over the global economy.
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