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Brooks Wilson's Economics Blog: Global Warming and Measuring GDP

Monday, October 12, 2009

Global Warming and Measuring GDP

GDP is a statistic and is subject to measurement error.  Economists have long recognized that pollution harms resources and economic activity and that the lost value should be subtracted from GDP, but this is a difficult and costly practice.  Anthropogenic global warming offers an example of the problems researchers would encounter measuring pollution cost.  The first problem is to measure the portion of the recent increase in temperatures due to nature and man.  Paul Hudson of  BBCNews describes the fight in the scientific community over the causes of climate change in "What happened to global warming?
This headline may come as a bit of a surprise, so too might that fact that the warmest year recorded globally was not in 2008 or 2007, but in 1998.

But it is true. For the last 11 years we have not observed any increase in global temperatures.

And our climate models did not forecast it, even though man-made carbon dioxide, the gas thought to be responsible for warming our planet, has continued to rise...
Note the error in the next quote which refers to "climate change skeptics."  As the author notes in the ensuing paragraphs, some skeptics believe that climate change is predictable by measuring solar output and presumably, not carbon emissions.  The quote should begin, "anthropogenic climate change skeptics." 
Climate change sceptics, who passionately and consistently argue that man's influence on our climate is overstated, say they saw it coming.

They argue that there are natural cycles, over which we have no control, that dictate how warm the planet is. But what is the evidence for this?

During the last few decades of the 20th Century, our planet did warm quickly.

Sceptics argue that the warming we observed was down to the energy from the Sun increasing. After all 98% of the Earth's warmth comes from the Sun...
Other sceptics look to the oceans as drivers of climate change.
The oceans, he [Professor Easterbrook] says, have a cycle in which they warm and cool cyclically. The most important one is the Pacific decadal oscillation (PDO).

For much of the 1980s and 1990s, it was in a positive cycle, that means warmer than average. And observations have revealed that global temperatures were warm too.

But in the last few years it has been losing its warmth and has recently started to cool down.

These cycles in the past have lasted for nearly 30 years.

So could global temperatures follow? The global cooling from 1945 to 1977 coincided with one of these cold Pacific cycles.

Professor Easterbrook says: "The PDO cool mode has replaced the warm mode in the Pacific Ocean, virtually assuring us of about 30 years of global cooling."
Scientists that support theories of anthropogenic global warming caused by carbon emissions don't agree with the theories that the sun or oceans are driving recent climate change.
The UK Met Office's Hadley Centre, responsible for future climate predictions, says it incorporates solar variation and ocean cycles into its climate models, and that they are nothing new.

In fact, the centre says they are just two of the whole host of known factors that influence global temperatures - all of which are accounted for by its models.

In addition, say Met Office scientists, temperatures have never increased in a straight line, and there will always be periods of slower warming, or even temporary cooling.

What is crucial, they say, is the long-term trend in global temperatures. And that, according to the Met office data, is clearly up.
After deciding if the earth is warming or cooling and man's contribution to the change, scientists must determine if the change is good or bad for economic activity.  The answer is clear that small increases in temperature have aided human development.  Henrik Svensmark gives a one paragraph summary of 1,000 years of climate variation on economic activity in "While the sun sleeps by Henrik Svensmark."
Solar activity has always varied. Around the year 1000, we had a period of very high solar activity, which coincided with the medieval warmth. It was a period when frosts in May was an almost unknown phenomenon and of great importance for a good harvest. Vikings settled in Greenland and explored the coast of North America. For example, China’s population doubled over this period. But after about 1300, the earth began to get colder and it was the beginning of the period we now call the Little Ice Age. In this cold period all the Viking settlements in Greenland disappeared. Swedes [were surprised to see Denmark to freeze over in ice], and the Thames in London froze repeatedly. But more serious was the long periods of crop failure, which resulted in a poorly nourished population, because of disease and hunger [population was reduced] by about 30 per cent in Europe.
Without reference, other scientists believe that anthropogenic climate change from carbon emissions will cause more warming than experienced in the past and that it will lead to large declines in economic activity. 

Economists would have difficulty measuring the impact of anthropogenic climate change on the economy.  I understand why it is not attempted.


  1. Roberson.Ryan21/10/09 9:21 PM

    Everyone recognizes that there are phases when the Earth cools and heats. However, has anyone truly figured out how to predict these phases with dead accuracy? So how can these skeptics say that global warming is nothing more than a hoax? It may be, it may not be; but until someone can prove beyond a doubt that it is just the phases warming the planet, not carbon dioxide, we at least need to attempt to factor this pollution into our GDP. If it is just a phase, oh well. At least we were prepared for the worst. If it is the pollution that is actually warming the planet, then perhaps taking the time to factor it into the GDP will help people, these skeptics included, realize the gravity of the situation.

  2. Kirsten Wiggins25/10/09 9:36 PM

    I agree with the skeptics, in that global worming is a hoax. I believe it is a cycle. One that no one can predict because it has to do with placement of the earth to the sun. People are not going to be able to predict or understand this world completely. Therefore people are not going to know when the earth is closer to the sun, and when it it is further away while it spins around the sun. I don't think people need to keep polluting, but i don't think that the pollution is causing a global warming either.

  3. Jared Groppe28/10/09 2:07 PM

    I belive that global warming is not true either. The meteorologists rarely get the next days forcast correct, how can they predict what is going to happen in years to come? We do not know really anything about the earth we live on today. Polution to me has little effect on global warming. I do not approve of polution but i do think we should focus our thoughts else where like where has the earth been spinning the past 500 years. I think that polution may have an effect on global warming but is not significant enough to think the world is going to end soon.

  4. Michelle Toups2/11/09 8:05 AM

    I understand why it has not been attempted too. We don't even know if global warming is actually occuring. People are so confused that some think it is warming and some think it is cooling...but they are going to try to measure it? Good luck. The people, after much study, still can't figure out the basics of whether 1. global warming exists or 2. what is it? global warming or global cooling?. I think it's funny that we are even talking about trying to calculate it. Let's first find out what is going on. Economists are so anxious. :)

  5. libby sullivan5/11/09 1:38 AM

    Whenever the subject of "global warming" comes up, I immediately admit to myself that I am not a scientist. The very concepts being discussed and debated are, for the most part, beyond any layman's understanding. That is why it is so ludicrous to me when someone without any scientific expertise flatly states that "global warming is a hoax" (or is "a fact," for that matter).
    That being said, I can read and I can deduce, and the overwhelming majority of scientific evidence put forth states without reservation that the earth IS warming at an alarming rate, and that WE have a lot to do with it. Scientists with absolutely no agenda are stating this, over and over.
    However, in order to actually factor this into any GDP formula with any accuracy or certainty, more needs to be understood. Both scientists and economists would need to find harder and more consistent data. A formula suggests predetermined, known variables and constants; are we anywhere near that when it comes to the subject of global warming? The effect of this phenomenon on economic activity, good or bad, is too important to deduce without the required evidence. Simply stating that global warming is occurring is not enough--exactly how to determine its effect on economic activity is a different, and even more complex, set of questions.

    1. I think that they, the people studying this, want us to believe in global warming so we can use their new "techniques" to prevent it. There is no proof showing us that global warming is the reason for our heat and such. People should be skeptical about a topic this vague, there is no security to the people who actually care about the matter to look into it.

  6. Kaitlyn Wooley8/11/09 2:20 PM

    I agree with this. Climate change does have a effect on the economy. When you hit colder periods, people get sick more easily and die, like the example you used of Greenland in 1300. However when the climate slowly heats up, people are less likely to get sick and die, therefore they live longer and our economy prospers. However, we still can not figure out if the earth is actually warming or cooling, therefore we can not figure out how exactly it will effect our economy.

  7. Laura Ehlers8/11/09 7:44 PM

    The GDP has so many variables to consider. It is unnatural to believe that humans could actually factor in all the economic issues to come up with an accurate GDP. The global warming topic shows that humans once again do not have the ability to predict the future. We are not in control of most situations. Yes, humans(and our pollution) affect our environment, but we aren't willing to consider more energy efficient lifestyles.

  8. Mikel Caddell8/11/09 8:25 PM

    I feel that accurately measuring GDP or the dominate cause of global warming (cooling in some opinions) cannot be calculated. There are many factors that go into each, & I remain skeptical when analyzing any updates in our economic situation because many opinions are biased from one study to the next. I agree that pollution does nothing positive for us, but I do not believe it is the sole cause of global temperatures. I found the theory about the ocean cycles very interesting & highly possible. Due to the fact that humans cannot 100% accurately predict really anything in the world (take the daily weather for instance), I do not believe that an answer to global warming or accurately calculated GDP will ever be obtained without always raising new theories or questions.

  9. Morgan Shaw8/11/09 8:48 PM

    To properly understand the GDP we need to have to clear on our understanings to get any kind of accuracy. Like in the global warming situation, humans get day to day weather predictions wrong. So how is it possible to believe that we could possibly predict that the world is getting warmer or possibly colder?

  10. Caitlyn Boyd9/11/09 5:06 PM

    I believe that measuring the GDP accurately can not be determined. Yes, humans contribute to pollution and could maybe cause SOME of the alleged global warming, but I do not believe that we are the main cause. I think that we should still try to invent news ways of conserving energy and to reduce pollution but I think most of it is over stated and just ways to scare people into spending their money.

  11. Rina Patel16/3/10 8:50 PM

    Global warming needs to be measured accurately in order to measure GPD. Not to lie, we, humans, do contribute to pollution, but we are not the main reason why we have pollution. Over the years, technology has grown and we have gotten new ways to reduce pollution, but nothing that was going to drastically reduce the pollution.

  12. I believe that our actions do have some part in the global warming but not completely....i don't think we are ever going to be certain, even with all of the technology advancements, that we will ever have answers to what drives our global warming....speculations, yes. but there are just too many factors to have to record and study.....and then factoring in constant change....we will never be 100% certain....

  13. Patricia Gager22/3/10 12:58 PM

    I am on the fence whenit comes to discussing global warming. I think this is one area that is certainly hard for scientists to pinpoint. It's also difficult to believe some of the data from these studies, because of the admittance of information doctoring that was intended to support a bias outcome. During my 41 years living on planet earth, I have observed both very cold seasons to long periods of warm seasons. This being said, however; I am a firm believer that for every action, there is some reaction. Unfortunately, factoring this into natural occurances of mother nature cannot be accurately determined.

  14. I feel that either way one looks at this issue, there are certain facts that must be contended with. One fact is that the carbon dioxide air pollution on Earth keep rising higher and higher. Another fact is that, even if the skeptics are correct when they say that global warming doesn't exist, the increasing levels of carbon dioxide air pollution do exist. So, either way one looks at the issue, carbon dioxide air pollution is the issue. Since carbon dioxide air pollution is the issue, the best way to handle this situation, to better our planet, is to factor it into our GDP. There is nothing to be lost by doing so, and everything to be lost by not doing so.

  15. Rachel Ledbetter25/3/10 2:22 PM

    People have been talking forever about global warming and how bad it is. About how the carbon dioxide is causing it and the whole world is just going to burn up. It's good to see that people finally realize global warming does not exist. However, like Janet said air pollution caused by Carbon dioxide does. It is important to take care of problems that really do exist rather than trying to find a solution about something that doesn't.

  16. William Lee Morrow25/3/10 11:31 PM

    Until it is possible to figure out exactly how much humans pollution has to do with climate change in real statistics, climate change should not be considered when deciding what to subtract from a GDP. To use all climate change as the base of what to subtract would be unhelpful, because the nation would be unable to correct their now low GDP because some climate change is natural. So until we are able to determine what is natural climate change and what is anthropogenic climate change, climate change should not be factored into GDP.

  17. James Jones30/3/10 11:15 AM

    IT is hard to say whether global warming is a hoax... THere have been studies on glaciers where they study air bubbles within the ice that have been there for hundreds of years and even test the amount of carbon gas..... Its is a feild of study that we have yet to master and need to take the time to understand the many vairibles of the situation other wise we are just grasping a what we think is causeing it. This is a very complex earth and to think that one problem is the cause is at most a grasp in the dark. Yes this need to be add or subtracted as a vairable from the GDP. To be able at least have some kind of ideals or models to cantrast with the problems cause by the changes the earth is going through. For example if there is a drought and all veggitation on the western states is lost then how will that affect the over all output of the economy and would it not cuase a huge rise in cost on food which would then affect the standard of living so would it no have some kind of corrlation to the Gross Demostic product.....

  18. Logan Fraser (Eco Student)31/3/10 7:07 PM

    I think the biggest reason why they don't try to work with the weather is because it's unpredictable. They can try all they want but it almost has a mind of it's own. Living in Texas all my life the famous saying is "If you don't like Texas weather, wait five days and it will be something different". With stating this, which i find very true, how can you predict on a good economic model with all the disruptions during it?

  19. Rosalva Medina31/3/10 7:18 PM

    een right on track, while other results have sI agree that pollution has in some way affected how the earth works, but i dont think that humans are completely responsible for the earth's weather patterns. Many scientists themselves dont agree that the changes in weather are caused by pollutoin, and that weather is on an ever-changing cycle. Like economics most predictions have burprised us. If the weather is not 100% predictible, then it will be very hard to apply it to economics predictions.

  20. Global warming or Global cooling, or other kinds of environmental hazzards. It really does not matter because in computing the Gross Domestic Product (GDP), the quality of environment is excluded or not a part of the equation.

  21. Brandon Baxter1/4/10 7:17 PM

    Although I am very skeptical of global warming, I believe it is real and not a hoax. However, there are several factors that influence global warming and not all are determined or attributable. When taking global warming into consideration for adjusting the GDP many difficulties are present. Such difficulties are the hardships and uncertainties of measuring the impact productivity contributes to global warming. The uncertainties can not be easily measured based on the fact they are unknown. How can we attribute the unknown? I truly understand why economist have difficulty measuring the impact of climate change and taking it into consideration, thus causing them to leave it out. Since so many factors contribute to the effects of global warming, how can we be certain and place measurements to adjust the GDP. One factor to take into consideration for the increase of global warming over the years despite the cooling cycles is population growth. If carbon footprints directly effect global warming, shouldn't growth in population be a factor of global warming. Life does contribute to the production of carbon dioxide, so wouldn't an increase in population increase global warming? For whatever reasons cause global warming, attempting to adjust the GDP for it is simply unfeasible in my eyes.

  22. rebecca kolosci1/4/10 10:41 PM

    Okay, so while you may think global warming doesn't exist but you have to admit that things are changing in our seasons and enviornments. Also, you cannot possibly think that what we do to the planet is helping it any either. I do believe heavily in going green and I also believe that everything we can do to prolong the existence of our one and only planet then why not do it. I believe that whatever you call the change in our planet, the population growth could attribute to changes in our planet but I hope it is just the planet changing as it was supposed to.

  23. Gabe Edwards3/4/10 5:40 PM

    I am unsure of the validity of global warming, and think it would be a big waist of time and money to research on its impact to the economy. Most people aren't even sure if global warming exists, so why research its impact on our pockets. If there ever comes a day when global warming is completely proven then perhaps this research would be necessary, but until that day comes it is absurd.

  24. Andrea Garza4/4/10 12:31 AM

    I think global warming is real, but that it is a cycle. Whether we are causing it or not it is happening because there are natural causes. Scientist as well as others don’t know how much human do or do not contribute to global warming; therefore it is really hard to predict GDP without all the statistics and facts.

  25. Allyssa Welch4/4/10 9:47 PM

    Yes as a whole I believe we humans contribute to pollution which causes an increase in global warming. But I don't believe that should be considered when measuring GDP.

  26. Kellie Duncan5/4/10 5:46 PM

    I'm no expert but I don't think there is such a thing as global warming. It's normal for the climate to change from year to year. But I also think that pollution can't be good for the Earth. I don't understand why GDP takes this into consideration when global warming hasn't been proven.

  27. I feel that attempting to adjust the GDP for global warming in unfeasable. There are too many factors that must be considered that influence global warming, most of them being too difficult to measure or to measure accurately, however I do feel that the climate change does have an effect on the ecomomy. It's common sense that when the weather stays cold, more people are sick, therefore additional medical bills and loss of wages. When it gets warmer, there are fewer occurrence of sickness. I don't think there is any precise prediction or measurement of how it impacts our economy.

  28. Jordan Kelley29/4/10 12:49 AM

    I'm for whatever makes Texas cooler during the summer. If there's global warming happening then I'm heading to a cooler place, but if it is just a cycle of warm and cold, then I will just have 2 houses; 1 where its cooler during the hot years and one in Texas during the cooler years. I will be content

  29. brittnie white29/4/10 10:28 PM

    It is ridiculous to think that someone without any facts whats so ever can make a statement that there is no such thing as global warming, or that there is such a thing as global warming without scientific proof.

  30. Emily Peters3/10/10 10:27 PM

    I do not really understand global warming completely so I don't know which side to pick. But, I agree with some of what others are saying that it is stupid that people say there is or is not global warming who aren't even scientists. I honestly don't believe anyone really knows the truth. There are so many different theories out there that you must choose what you believe. I don't think that economists should factor this in GDP because it is so hard to decide if global warming is real or not. When there are so many theories out there, GDP may not necessarily be accurate enough to some if global warming is a factor.

  31. Elaine Owen ....

    We are warming the planet more because of all the building that we do, look at the amount of asphalt on the roads and parking lots, all this does is reflect heat causing it to feel hotter than it is. But with the better/stricter laws that help lower greenhouse gases we are slowly making a dent in the destruction that we have caused so far. But, could the skeptics be right? Since no one has ever been alive long enough to see the complete warming and cooling cycle of the earth. Since when can anyone predict what nature will do today, tomorrow, or 30 years from now. As far as global warming effecting the GDP, I think it does effect the economy to a small degree. People tend to become sicker during cooler/cold weather which means more trips to Dr.s who prescribe drugs to make you well. While in the warmer/hot weather people tend to stay indoors causing them to run the air conditioner more causing electric (energy) consumption to rise. In each case hot or cold weather adds something to the GDP. But I don't think it had anything to do with global warming I think it is just a cycle like the moon.

  32. Hannah Allen28/2/11 8:29 PM

    Because I am not a scientist, I really have no idea if global warming is a hoax or not. I have read many, many articles about the subject and if I had to lean one way or the other, I would probably say it is not. In addition, I also agree with the comments made about how we should at least be doing something to help and it should also be factored into the GDP. I don't think there is any harm in taking an important precaution in the name of future generations.
    I found it very interesting that this was a blog post. I had never really thought deeply about how global temperature could have a great effect on the worlds economy. I have heard the example of, if it's hot outside, ice cream sales will go up....but other than that, had not thought much more about it. It makes perfect sense.

  33. Rebecca Northcutt1/3/11 9:43 AM

    I don't believe global warming is happening either or that it even exists. The people in the weather forcasting business today can't even get the weather right most of the time for a forcast on the daily news let alone what it is going to be like years from now. I think that what happens is going to happen no matter what and that the pollution in the earth's atmosphere is an issue but I am not quite sure it is a global warming issue. Global warming could be true if you look at it in a certain way but really noone knows what is going to happen it is all just a hypothisis.

  34. Everanit Lopez1/3/11 7:46 PM

    Economists would have difficulty measuring the impact of anthropogenic climate change on the economy since global warming is not a proven fact. Time and money would be spent on something that doesn't even exist.

  35. Carl Schulz2/3/11 6:40 PM

    Factoring pollution into GDP? First question is how? And the next question is who's pollution is it? As well as who's GDP should it come from? China I understand is horrible when it comes to environmental concerns, so should their environmental irresponsibility cut into our GDP? I am in agreement with the scientists who believe in the PDO theory. When the Ice Age hit the earth, i'm fairly sure there were no carbon footprints from the airline industry or from automobiles, so cooling or warming of the Pacific makes more sense than aerosol cans or internal combustion engines.

  36. If global warming is real or not is still up for debate. I do think the climate has an affect on the economy. When it is cold more people tend to get sick and spend more money at the doctor and on medication or on gas to heat their house. But when it is hot outside people spend more on air conditioning, water for their yard and/or pools, grills, etc. I believe car makers and other manufactures use global warming more as a scare tactic so they can charge more for "green" products.

    -Heather Harvard-Roth

  37. I do not know how economists could logically pollution damage from GDP. How would one develop a formula for this? What would one consider damage? Would one also take into account lack of economic growth if the activity that caused pollution was not allowed to exist. A good example of this are coal power plants. While coal causes emissions that may or may not cause global warming, what if coal plants were not allowed. How much higher would electric rates be? How many jobs would not be created? Would there be any electricity at all thereby further reducing GDP? It just does not seem wise to try to measure something as subjective as pollution damage and the effects it would have on GDP, especially when there is a growing debate in the scientific community whether pollution causes global warming, or if the earth warms and cools in cycles.

    Ken Haltom

  38. There are arguements against almost all forms of energy exploration and development. There are opponents of coal concerned about pollution and destruction of land were coal mines are. Those against drilling offshore are fearful of oil spills. Anti nuclear activists are worried about another Three Mile Island event will happen. Concerns against natural gas are primarily concerns about water pollution trying to reach natural gas deposits. There are even those against wind farms expressing concerns of noise pollution for those who live near wind farms, also those who live near these farms express outrage that it ruins the scenic appearance of their property, thereby reducing its value. It appears that almost any energy alternative has it detractors. There is no easy solution in developing new energy sources, if we want to continue economic growth in this country, we are going to have to learn to live with the negatives as well as the positives of future energy development.

    Ken Haltom

  39. My personal belief about global warming is that man is to inconsequential to be able to change the atmosphere. This planet was created by God and we will never know or be able to predict the future. I think trying to calculate the changes in GDP due to global warming would be impossible. Half of the scientific community believes in global warming the other half does not. If it cannot be proven, how can you calculate GDP on scientific theories. My concern for our GDP is if congress passes new laws and restrictions on busineses, because of unproven theories. This could lead to a weaker business climate due to only the possibility of scientific theories by some scientists. There needs to be more evidence and that will take time.

    Elizabeth Rainwater

  40. Shannon Gardzelewski25/9/11 5:52 PM

    I beleive that if global warming does exist it is just a natural occurence of our planet. Now, I also beleive that carbon emmissions may also be effecting our atmosphere, but I doubt they are making such a big difference that it is killing out planet. Pollution does need to be taken into effect for our resources but I think we need to start with the kind that is more easily controlled, like chemicals and run off hurting the natural environment on earth. We are worrying about car emmissions hurting our atmosphere but alot of others do not know that most of it can come from our own ways of producing food like farming chemicals that are actually polluting our drinking water and the waters of wild life habitat. If we can not handle that, how are we going calculate our GDP for something we can barely control, let along predict.

  41. Laura Ledford27/9/11 6:43 AM

    I believe that natural resources causes the change in temperatures on the planet. I feel we can learn what we are aloud to learn about this but it keeps the scientist on their toes and thats why it is so unpredictable. Pollution is not good for our planet and I am not sure if this has anything to do with global warning or not. I do believe that if we are suppose to know what is the cause of this God will give man the knowledge to know. I think there is somethings that we will never know and it would be very costly for something that really does not matter because God is i control no matter what scientist know or think the know.

  42. I do not believe in global warming. Scientist has not been able to prove it with true scientific data. They can only throw in some data here and there and change it up until it proves their theory. How are we to be able to predict the future of weather patterns if we cannot predict the weather a few days from now? Over half of the time the weather forecast is not even accurate in a 10 day forecast let alone a year or more down the road. The Earth has cooled and warmed back and forth throughout the years. Until I hear some concrete proof of the climate changes being due to carbon emissions I will not believe that we can predict the weather in the future years. Global warming has not been proven and I don’t think that it ever will be.

  43. Im kind of in the middle of believe and disbelief when it comes to Global Warming. Although scientist don't have enough info or data to prove Global Warming is occuring I'm not a scientist so I guess I believe them.

  44. Doesn't really matter. I would think to predict or determine if there is a problem would be impossible because of all of the variances and no way to predict what the sun, earth, or ocean waters are going to do. If we could predict the climate or the weather which all would affect global warming, seems to me we would be predicting. Going by temperatures and past history..I guess if we had records that dated thousands of years ago we might somewhat predict what is going to happen. My thought and that is MY THOUGHT is that we may have warmed up a little which isn't surprising but probably if we compared records from a century ago we would probably discover that the temperature varies year by year.

  45. Taylor Perry2/10/12 8:01 PM

    In my opinion I believe that global warming is a myth. There is warming of the Earth due to its natural cycles. We also pollute the Earth which in no way helps with anything, but I do not believe any of this contributes to global warming.