The Economic Case for Net Zero Is Zero
by Gordon Tomb
Implementing net zero will depress the global economy more than the atmospheric warming that the campaign against carbon dioxide emissions is supposed to prevent, according to a comparison of research by recognized experts. In other words, abandoning efforts to eliminate the greenhouse gas emissions of fossil fuels likely would make virtually everybody richer.
The comparison is presented in a short 12-minute video titled “How human disruptions impact GDP” by Dr. Lars Schernikau, an energy economist, commodity trader, and author of The Unpopular Truth… about Electricity and the Future of Energy.
Dr. Schernikau reviews the cost of “human” disruptions such as from Covid or the Ukraine-Russia war with estimates of implementing net zero, which were calculated by consultants McKinsey & Company and Wood Mackenzie, and projections by the Intergovernmental Panel on Climate Change for atmospheric warming’s effect on GDP.
According to the data, the cost of implementing net zero would range from seven to 10 percent of GDP by 2050, while the cost of abandoning net zero would be but a fraction of that—0.5 to four percent of GDP from a temperature increase of 2.5 degrees Celsius by 2100. The difference is measured in many trillions of dollars. Moreover, the higher cost of net zero is compounded by being incurred 50 years earlier than the predicted effect of warming.
“When we step back and look at predictions for warming and GDP growth (gross domestic product), we must consider that the more wealth we create, the better people can withstand severe weather or whatever climate impacts there might be,” says Dr. Schernikau.
Neither McKinsey nor Wood Mackenzie acknowledges in its report that it would be more harmful to the global economy to implement net zero than to allow the projected warming to occur. In advocating for a reduction of CO2 emissions, they simply accept the narrative of proponents.
Significant uncertainties are noted in all the analyses, leading one to think that Dr. David Wojick may be onto something when he writes that the “math of chaos” makes long-term predictions of climate impossible.
A Nobel Prize-winning economist referenced by Dr. Schernikau also agrees that GDP growth would be greater without a net zero campaign and concludes that avoiding the predicted temperature rise is virtually impossible in any case. Writing in the American Economic Journal, Dr. William Nordhaus says that “there is virtually no chance that the rise in temperature will be less than the target 2°C even with immediate, universal, and ambitious climate change policies.”
So, in addition to the economic case for net zero being, well, zero, the chance of averting the supposed greenhouse warming is nil, and predicting the climate 80 years from now is impossible. It gets even worse for the narrative of Green New Dealers when the benefits of fossil fuels and CO2’s fertilization effect are taken into account.
For example, fossil fuel-dependent technologies have increased agricultural yields directly or indirectly by at least 167 percent, according to a report by Dr. Indur Goklany, a 30-year veteran of the climate debate and an author of books on the subject. Consequently, the world sustains ten times more people today than at the start of the Industrial Revolution—about 8 billion versus fewer than 800 million—while supporting more biomass.
For a bit of context, included in Dr. Schernikau ’s analysis is a report from British oil company BP, which lists the costs of the Russia-Ukraine conflict to be as much as six percent of global GDP by 2100. That is 50 percent more than the alleged effect of man-made global warming—if there is any such thing—and nearly the cost of eliminating carbon emissions.
At the very least, political leaders backing the net zero agenda should reconsider imposing on their citizens economic damages equivalent to a war, with no good result.
CO2 Coalition Senior Advisor Gordon Tomb is a senior fellow with the Commonwealth Foundation, a Pennsylvania-based free-market think tank.