"Humanity is playing dice with the natural environment through a multitude of interventions"--William Nordhaus, 1999

I am taking a course in System Dynamics and a recurrent topic is the understanding of the so-called exponential growth or decay of our world phenomena. There is nothing in our world's phenomena that has the characteristic of either a linear growth or linear decay. The only people who accept the linearity of our world are the neoclassical economists, however, they all concede that their God, the invention of Money, has an exponential function.

The House of Commons has voted for the ratification of the Kyoto protocol after all the provinces expressed their opposition to it. The strongest opposition came from Alberta which conducted a study showing that the Kyoto protocol would cost between $23 to $40 billion a year if Canada ignores economic realities. Now we all must understand that the economic realities are all preached by the top economic advisers serving the banks, the corporative business and the privatized governments.

The economic implications of global warming on the Gross World Product (GWP) have been contradictory, and there are now prominent economists disputing the economic scenarios developed by the Intergovernmental Panel on Climate Change (IPCC). In 1994, economist William Nordhaus conducted a survey of distinguished economists and scientists to assess their views on the economic effects of global warming on the Gross World Product. Nordhaus found that there was a huge gulf between the estimates of the scientists compared to the economists. Reviewing the work of Nordhaus, John Sterman writes

"scientists estimated the probability of a high consequence event (a catastrophic change in climate cutting GWP by 25% or more) as 20 to 30 times more likely than the economists did. Estimates of the most likely reduction in GWP were similarly bimodal, with scientists generally estimating large impacts and economists generally estimating small or even positive impacts of warming on the global economy."

Nobody knows who is right or wrong on the economic impact of global warming but I am very skeptical of the neoclassical economists as they exponentially discount the future dollar costs and the future dollar benefits of global warming at the expense of our children.

References

Kyoto could cost Canada up to $40 billion Government of Alberta, February 01, 2002 http://www.gov.ab.ca/home/news/dsp_feature.cfm?lkFid=90

Corcoran, Terence, An 'insult to science' (pdf) Leading economists want a full review of the UN's 100-year economic models for climate change, which they say contain "material errors" that invalidate temperature forecasts. November 30, 2002, National Post http://www.ftlcomm.com:16080/ensign/ensign2/pdfarchive/nationalPost/insult2science.pdf

Sterman, John, Business Dynamics: Systems Thinking and Modeling for a Complex World, Irwin McGraw-Hill, 2000, page 273 http://www.mhhe.com/business/opsci/sterman/