Wednesday, November 15, 2006

The World May Be Warming ...

Amazingly for a tree-hugging conservative (how's that for an oxymoron!), this will be my first post on global warming! That's because I've been cautious about popular scientific predictions - be it the global warming warnings or the claims that the world is running out of oil. I simply do not know enough about the science of these subjects to make an intelligent argument one way or the other. I have watched 'An Inconvenient Truth', but still remain far from convinced that the science definitively states that the world is warming due to human activity. I'm impressed by the massive consensus in peer-reviewed literature that the world is warming due to human activity, but also know that sometimes the peer-review process forces consensus when none should exist. Add in the fact that scientists do not acquire grants for postulating the absence of a problem, and you have reasons to be skeptical of the scientific community.

So why have I chosen to break my silence on the topic? Simply because I've become convinced in the wisdom of one man. Jeremy Grantham, co-founder of Grantham, Mayo, Van Otterloo & Co. (or GMO) , an investment firm, pointed out in a recent newsletter that in reality, the need to act due to global warming despite the uncertainties is not unique to this topic. In fact, it is the underpinning of the insurance business. And therein lies the paradigm the policymakers need to embrace - dollars invested in a reduction of greenhouse gas emissions need not require certainty in the facts, but rathet simply that the consequences of a reasonably possible outcome far exceed the incremental costs to alleviate such an outcome.

Really the costs are not likely to be significant if an adequate trading system is implemented. Emissions in China (which contributes to 15% of global greenhouse gases) and other third-world countries is actually rather cheap to fix given adequate investments, which could be achieved in the form of purchase of carbon credits by firms in the developed world, which would have a much tougher challenge squeezing efficiencies from their already advanced systems. (There are other issues, including local air pollution that would have to be worked out)

The reality then is that while not simple, the global warming crisis (or threat) can be handled by approaches not unlike other threats. That the world's dominant economic superpower has not shown more leadership on this issue is then a travesty!

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