THE CLIMATE CASINO
Yale University Press, 392 pages, $30
William Nordhaus expects that economic damage from climate change probably will be quite small compared with economic growth over the next half-century to century. Yet Nordhaus worries about the “unknown unknowns” — that Mother Nature may play her hand in a way that upends logical forecasts and leads to disaster.
The Yale economist frets in particular about four tipping points: the collapse of the ice sheets of Greenland and West Antarctica; large-scale changes in ocean circulation; situations when warmth prompts more warmth (say, by the thawing of frozen methane); and the possibility of a warming trigger that may double the Earth’s temperature increase, to 6 degrees Celsius. (Even three degrees is now considered extreme.)
In “The Climate Casino,” Nordhaus picks through an impressive tool kit of the latest findings in climate study and economic theory. From these, he pieces together a highly nuanced argument with rare clarity.
At stage center in these pages is DICE, a computer model devised by Nordhaus and his colleagues. It combines projections of pollution and climate change with projections of global economic growth, and then computes how they can be expected to affect each other. The model drives his findings the way a souped-up engine drives a NASCAR sprint car.
DICE informs him that if there is an increase in temperature of 2.5 degrees Celsius, global warming in 2070 can be expected to inflict economic losses and damage amounting to 1.5 percent of global output. That would not be trivial, but it wouldn’t be devastating, either.
Nordhaus also understands that major uncertainties remain. Computer models help, but they can disagree. Nevertheless, he says, we have no choice but to make our best guesses and most prudent choices, relying on a “fuzzy telescope.”