“The science and evidence in Roland Emmerich’s anticipated blockbuster Independence Day may be flawed and the posited scenario may be impossible as far as we know, but the movie has the potential to do a lot of good. It will raise awareness of the possibility that a race of hostile aliens may someday attempt to exterminate humanity. What’s more, it may convince the White House to address this pressing issue.”
Is there any chance that a paragraph like that would have made it onto the editorial page of a major newspaper in anticipation of Roland Emmerich’s mid-nineties blockbuster? Doubtful. And yet Emmerich’s The Day After Tomorrow has generated a lot of publicity and a lot of “dialogue” by positing a doomsday scenario that is only slightly more realistic than the alien invasion scenario that was the centerpiece of Independence Day (or the giant nuclear lizard that wreaked havoc in Emmerich’s update of Godzilla).
Lots of people have spilled ink—including the New York Times—about the disaster flick The Day After Tomorrow (Peter Klein links to Bjorn Lomborg’s review in the Blog). The NYT tells us that even though the science in the movie is seriously flawed, it has the virtue of elevating the dialogue about global warming and its impact on human civilization. Noble though it may be, should we take this claim seriously?
Presumably, the film will get us to devote more resources to research on climate change. Maybe we’ll adopt the Kyoto protocol. Maybe people will make radical lifestyle changes that will reverse the trend toward a hotter planet. Unfortunately, important economic principles get in the way: specifically, nothing is free. These changes come at a cost.
What the film’s more radical supporters are proposing is nothing less than the destruction of commercial society. We can dismiss them out of hand because it is easy to show that the socialist reforms they propose will spread poverty, disease, and destitution the whole world ‘round. But what about well-intentioned, minor changes? Shouldn’t these be implemented to insure ourselves against the remote possibility of environmental disaster?
Absolutely not. Again, there are no free lunches. Implementing Kyoto would be expensive—$150 billion annually, writes Bjorn Lomborg, all to push minor global warming back by six years. For that price, others have noted, we could provide clean water for the entire world’s population. Moreover, as Brad Edmonds points out, environmental quality is a normal good. As people get richer, they demand cleaner natural environments. American Airlines’ American Way magazine makes this point in an article about eco-friendly developments that are rapidly gaining popularity among the super-rich.
Do we all want to breathe clean air? Yes. Do we all want to live in places with lots of green space? A lot of us do. Do we get our jollies by dumping sewage and toxic chemicals in streams and rivers? Do any of us want to see the earth destroyed by climate-induced natural disasters? I really doubt it. The fact of the matter is, though, that the probabilities of cataclysmic disasters like those we see in movies like The Day After Tomorrow and Independence Day are very, very low.
For the sake of argument, let’s suppose that we have a pile of cash that we can sacrifice for some noble cause. For concreteness, suppose it’s the capitalized value of a stream of $150 billion cash flows over 100 years (the calculations are left to the reader as an exercise—it’s a ton of money). Spending these resources in anticipation of global warming-induced falling skies is quite like spending resources in anticipation of an alien invasion.
To the extent that we want to change things, we have far more pressing concerns. Diarrhea—easily preventable, easily treatable—kills more children than any other disease on earth. Official injunctions against DDT brought about a resurgence of malaria in poor countries and are responsible for millions of deaths. European resistance to genetically-modified foods condemns millions in Africa, India, and elsewhere to poverty and starvation. And so on.
How can we know what threats society’s resources should be used to combat and what issues should be addressed? This is not a small issue. In fact, it is the core economic problem that scarcity itself gives rise to. It can be solved only through market means. It is the market, not the state, that provides mechanisms (risk premiums, prices, profit and loss) to check ideological extremes. Political institutions are not in a position to make realistic evaluations of risk; instead, they are buffeted about by the latest fads.
To the extent that something in the world needs to be “fixed,” our resources are better spent developing the institutions of capitalism—private property rights, capital, and well-functioning markets—than on shot-in-the-dark attempts to prevent ultra-low probability (and ultra-overrated) “disasters.”
