Monday, April 07, 2014
The Wall Street Journal on the IPCC's New Report
Now that it is acceptable to talk optimistically about climate change adaptation, the WSJ's editorial writers are having some fun. In today's piece, they throw some tough punches. A more nuanced view would point readers to take a look at the IPCC's report and to Weitzman and Wagner's preview of their forthcoming book. My view is simple; while I'm not happy about this --- I predict that global GHG will continue to rise so that carbon dioxide levels probably reach 500 ppm in the next 25 years. We will need to adapt to this reality. Given that the world's population will be highly urbanized at that time, the idea of the "system of cities" will become crucial. I discuss these issues in my 2010 book Climatopolis. We will grow our food in new places, using new technologies and international trade will play a key role in protecting specific areas from idiosyncratic shocks. The world will learn a good lesson about how free market capitalism and the invisible hand diversifies risk. What about fat tail risk? I reject the view that climate change will strike every inch of the globe will equal force. Within every continent there is "higher ground" and we will collectively retreat to those areas living in high density.