Energy vs Climate

Raising the Heat: How Warming Can Reduce Lifespans & Slow Economic Growth

• Energy vs Climate • Season 6 • Episode 4

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Ed Whittingham: Hi, I'm Ed Whittingham, and you're listening to Energy vs. Climate, the show where my co host David Keith, Sarah Hastings Simon, and I debate today's climate and energy challenges. On November 4th, the day before the 2024 U. S. election, David and I recorded a live webinar with Dr. Michael Greenstone, one of David's colleagues at the University of Chicago.

We called it Raising the Heat, How Warming Can Reduce Lifespans and Slow Economic Growth. It was an illuminating and sobering discussion. And I think you'll take a lot from it. A reminder that Sarah's on medical leave for the time being, so it's just David and me again. Now, here's the show. In our last EBC show and recording, David and I spent time talking about the technical and the governance dimensions of solar geoengineering.

And of course, the starting premise of solar geo is that overall the planet is warming. 1. 45 C. above pre industrial temperatures as of 2023. And with that warming, we will likely have negative consequences for the planet's ecosystems and for the species of life that populate it. And that includes us humans.

And our guest is a preeminent thinker on the economic and health impacts associated with that warming, which is our topic for today. We'll discuss the relationships between temperature change and mortality, the impacts temperature have on public health generally, the economic impacts, i. e. the costs, and of course how public policy can lower the risks.

And now to our guest, Dr. Michael Greenstone is the Milton Friedman Distinguished Service Professor in Economics and Director of the Becker Friedman Institute and Energy Policy Institute at the University of Chicago. He also serves as co director of the Climate Impact Lab, which is a multi disciplinary collaboration of researchers working to Quantified long term impacts of climate change.

Michael's research focuses on estimating the costs and benefits of society's energy and environmental choices. And he has just launched a big new institute that David is involved in called Climate and Sustainable Growth. Welcome, Michael. Thank you. Pleasure to be here. Maybe I'll just turn to David quickly.

David, you think a lot about the effects of heat on human health in your own research. Do you have an opening thought to share? 

David Keith: Well, I can't wait to actually ask Michael a bunch of kind of basic questions, so I think a lot about it, but I don't do any work on it, I use the work that Michael and many of his colleagues around the world do to this work that quantifies the links between them.

say, temperature and human mortality and health. I use that in my own work to try and understand, say, the costs and benefits of climate engineering or what have you. But I think it's really interesting to focus on the kind of work itself and on how it shapes the way people think about climate change, which is what we want to do here.

Ed Whittingham: Great. So, Mike, we'll get ready for both of us to pepper you with questions and I'll, I'll start us off, you know, maybe at the highest level, could you describe for us the relationships between temperature change and health generally? 

Michael Greenstone: Well, maybe I'll refuse to answer your question and answer, uh, a cousin question.

That's fair game. I'll just start with what's the impact of the relationship between temperature, not temperature change. And I think what we've learned in the last few years is with more precision, this was known at some level before, but that there's a new relationship, uh, between daily temperatures and And I want to really come back or emphasize that talking about daily temperatures, not annual averages and, uh, mortality rates and that you relationship means that on very full days, why don't you think of them as, uh, I went to the Chicago public schools and like every year.

The teacher would come in in September and say, this is the year we're going to switch to the metric system. And then about two weeks in, the teacher would give up and say, you know what, that's too hard. Let's just stick with Fahrenheit. So I would call a cold day below 25. That is where the average temperature is below 25.

And a hot day, just for the sake of argument, Uh, maybe above, uh, 95 degrees. 

Ed Whittingham: Yeah. I'm, I'm, when you started giving temperatures in Fahrenheit, I'm using the old formula of double it and add 30 when going from Celsius or minus 30. 

Michael Greenstone: You guys are Canadian, so you're 

Ed Whittingham: way more evolved, uh, than I am. Well, well, I remember by the way, in grade three, when they flipped from Imperial to metric, but they actually stuck with it and, uh, we've been metric ever since.

Michael Greenstone: I think of it as 35 degrees C and minus five C. Okay, got you. Uh, what we've learned is that there's this new relationship and when cold days arrives, there's excess mortality, people, uh, there's extra people, uh, unfortunately die. And when hot days arrive, there's also an increase in mortality. And I think that's not super insightful, uh, but.

What we have, uh, or was new or not especially new some of the work I've done, but what has been new is to have been able to characterize how that varies around the world. And so we collected data covering 400 million death certificates covering about 40, uh, 40 percent of the world's population. And that you relationship varies a lot depending on what the climate is, where you're located and how wealthy, uh, your, your location is.

Ed Whittingham: Let's talk about. The impact that temperature will have on mortality specifically, because that's, that's what we're most worried about. David and I spent some time talking about that a few weeks ago. Uh, what is your research found? 

Michael Greenstone: Uh, so the research has found, uh, so if you get in a day above 35, uh, C.

There'll be about four extra deaths per million population. And if you get a day below, I guess we're saying minus five C, uh, you get about three extra deaths, uh, per million people. And that's relative. Both of those are relative to a 20 degree day. And so how this connects to climate change is we're going to have fewer of the cold days and more of the hot days and how those two balance each other out kind of leads to the kinds of.

Work that David has done on what might be the benefits, uh, of solar geo. Gotcha. 

Ed Whittingham: Uh, I want to, maybe I'll park it for now. I know heat kills, but so too does cold. So fewer of those cold days than would actually have a positive impact on mortality and by positive, fewer mortalities, but let's, let's park that for a second for when we get into the three way conversation, then can you tell us a little bit about economic impacts talked about health and mortality?

How much is this going to cost societies? And where are those impacts and which societies, which geographies are those impacts likely to be the highest? 

Michael Greenstone: Yeah, so one thing that I've tried to bring to this area is not to just count up bodies, I guess, or extra deaths, but to actually also account for how much societies spend protecting themselves.

Uh, and so if it's going to be hot all the time, then people, societies will invest in lots of air conditioning and things like that. And there's a really poignant example, I think, that comes from, sadly, inside the United States, and we're in, uh, effectively in Canada here. I think it's very instructive to consider Seattle and Houston.

They're both basically the same place, very rich country, at least globally, they're both basically the same place, a very rich place, except for one, uh, one thing, which is hot days, days greater than 35 C, come with great regularity to Houston and come very infrequently to Seattle. And so when one of those days comes, uh, the impact on mortality in Houston is pretty small, but.

Full cost of that are not small because they spent a ton to protect themselves. They built a whole underground city. They have air conditioning everywhere. Uh, whereas in Seattle, it's not worth it to make those extra investments because the hot day comes to this point, this will change the climate change.

But to this point, it has not been worth it to do that. And so they actually are willing, and this is like only the way an economist could talk, a horrible way economists could talk, they're willing to accept the excess mortality on the rear day when the hot day comes. And so the full cost of these hot and cold days really has to be measured, and this is the point I want to get across, both in the extra deaths, but in the adaptation expenditures that people are willing to undertake.

Ed Whittingham: And I think, so you've compared and contrasted Seattle with Houston. Houston, both are rich cities. that can afford to invest, uh, in adaptation. And as you say, put people underground. I think the city of Houston, if I recall, or maybe it's Phoenix, sorry, actually has like a, a heat star or a public health specialist who is just focused on, on heat and that kind of adaptation.

But I think I've heard you say elsewhere that if you're in a place that is already hot, And poor, that's where you're at greatest risk. Those are the geographies. And we're talking about equatorial and mid latitude states. Did I get that right? 

Michael Greenstone: It's absolutely right. Uh, so the climate change, the impacts of climate change are going to be highly inequitable.

Uh, and they're going to land, uh, as you said, uh, most dramatically in that belt, uh, around the planet where there's billions of people where it's hot and poor already. Uh, so like, here's an example that I just pulled out, uh, and prepping for this, uh, in 2100, Accra in Ghana is a poor and hot place is projected to be To have 85 extra deaths per a hundred thousand people.

If you take Oslo, which is in Norway and maybe you could think of as almost Canada, they're gonna see a benefit of a reduction of like 230, uh, deaths per a hundred thousand people. And that's really because of these places starting points on the u, on this u between temperature and mortality and the steepness, uh, of the u In those places, Oslo's gonna move down the cold part and get rid of all those cold days that are killing people.

Uh, and OPCRA is already hot and important. It's a very sharp increase in mortality on hot days, and it's, it's going to be very, very challenging for them. 

Ed Whittingham: You know, I said we'd get to it later, but you've talked about Oslo. And of course, we're sitting here in Canada on the metric system where average temperatures are much colder than or cooler than they would be in the United States.

So let's, let's talk about this notion now of heat kills, but so too does cold. So we can expect. Mortality from cold to go down in those northern latitudes. 

Michael Greenstone: And let me pause you right there, Ed. So like, the total impacts of climate change? depend exactly on how people are distributed around the planet. So if everyone lived in Northern Canada right now, climate change would reduce mortality.

The problem is there's not very many people who live in in those very cold places and lots of people who already live who live in places that are already hot and so the current distribution people leads to On net, there being large increases, uh, in, uh, mortality from climate change projected. 

Ed Whittingham: Got you.

Well, after Tuesday's election, we might have more people moving north to Canada from your country and it might be for a couple of reasons, not just politics, but also because they can shield themselves from, from a, uh, a warming city. Siri, I've been, I've been hogging Michael here at David. I know you've got some questions and then let's, uh, let's get into a three way.

David Keith: Yeah, happy to though. I really, the whole metric thing just gets me going and I want to talk about the details of the Mars climate orbiter mistake and the Gimli glider. Two beautiful examples of metric conversion errors and NASA flew a 350 million into our mission into Mars because of a simple metric to a silly unit conversion error.

And of course, Canada, which is, uh, I think the world leader in flying large commercial aircraft with no fuel, um, loaded with passengers, uh, had the Gimli glider accident. So, um, lots of examples of how the kind of half conversion that the U S has just doesn't work. As an engineer, I'm used to living with like metric screws and Imperial screws is just insane, but you can hold me back.

Michael Greenstone: David, you know, man, the Chicago public schools. Every single year they tried 

David Keith: the problem is the way we're caught halfway. That's the lesson from that NASA error is like Lockheed Martin was using one and NASA was using the other and that's how they blew it. Anyhow, um, I want to start with a really nerdy question for you, Michael.

Uh, you know, looking at the econometric this economy, well, you can define econometrics, but these detailed studies that you and others have done. They almost all focus on just the directly measured temperature, this, this thing that we measure with a normal, uh, thermometer, not on wet bulb temperature, that is temperature that takes account of humidity.

We kind of certainly believe physiologically that wet bulbs should matter more. In fact, there's this thing called wet globe that also takes an account of how. how windy it is and how much solar radiation there is. So, you know, a day that's, I'm going to stick with metric, a day that's 30 C and like 80 percent humidity just feels enormously hot, whereas a day that's 30 C and, you know, 30 percent humidity just feels kind of nice, uh, to me anyway.

So I guess I really want to understand why time after time studies that you've done and your competitors have done don't seem to ever include or find effects of wet bulb temperature. 

Michael Greenstone: Papers would be better my, or I don't want to speak of other people. My papers would be better if they could do wet bulb.

We have a wet bulb projection into the future problem. We don't have data on that. Uh, and I think I remember, right. Even getting the relation, current relationship, we may not have comprehensive wet bulb data around the world, but I will confess I didn't prep for this detailed question and I can't quite remember if it's that and that we don't have projections or if it's just that we don't have the projections.

Oops. So, anyway, totally, uh, I, I agree. 

David Keith: No, I think, I mean, I would think in the U. S. or some places there's, there aren't big enough differences to make a difference. But I would think if you're projecting like to Indonesia or other places in what, what meteorologists call the maritime continent, just like all this area where the ocean is hottest there, I would think it might really make quite a big difference and I'd love to look at it.

Anyhow, 

Michael Greenstone: I, I share, I share that, uh, desire. I'm sure it's there. 

David Keith: So here's another kind of, well, geeky one is I've been reading some of this literature and my favorite paper is this giant study that's called ISN 2017 that found the following, I think kind of stunning fact that one extra day above 32 centigrade when you are either in the third trimester of your mother's womb or the first year of your life, reduces your income at age 30.

by one part in a thousand, by 0. 1%. That's, that's 0. 1 percent per day that it was hot. Uh, obviously these econometric papers don't tell you why, but I assume the only plausible answer is brain damage. Like it's just hard to imagine what else it could be. Does that study kind of hold up? Do you take it seriously?

Michael Greenstone: I would call that literature more in the emerging. I mean, I liked that paper quite a bit, but more in the emerging phase. Then in, uh, kind of, we've been inundated with enough evidence that it must be true. Let me phrase it slightly differently. The impact of very high temperatures on human capital accumulation and its consequences for the labor market.

That is a super exciting area. Uh, and that's a really important piece of evidence. It could be brain damage. It could be premature birth. It could be low birth weight, having some channel into long run outcomes. It couldn't do brain damage. So, I, there's a lot to discover there. 

David Keith: Yeah, I think what, what it adds up for me is that, yeah, as you just hinted, there's kind of at least two different categories of effects that heat has.

One category of effect heat has is on the day that it's hot or the week that it's hot. You know, if it's very hot, more people die, especially more old people die. Your data separates it for old and young. And also, and I want you to say a little more about this, people are less productive. They get less work done, both intellectual work and physical work.

Can we see this in. labor receipts and, you know, economic productivity. So that is all kind of on the day. But this second set of ideas, which is that a lot of heat while you're young might actually like decrease your ability for the rest of your life. And that's true both for this potential kind of brain damage thing, but also education.

My, my friend, Jason Park has done this, what seemed to me, but you're, you're more of the economist or. Beautiful work in New York City schools showing that, uh, as I recall his research that a year that's one standard deviation hot, uh, reduces your test scores about as much as having a teacher, which is one standard deviation bad.

Michael Greenstone: So again, I think there's actually a Parallel literature on the impacts of conventional air pollution, where I think the human capital, human capital accumulation side, uh, is a little more developed than it is on the temperature one, but both of them are really exciting areas that we need to learn more.

I would, you know, more broadly, I would say the direction of change is that. We're learning that the impacts of extreme heat are worse than we understood, you know, one thing I'll just on the pure mortality side, one thing that I think has come out of some of the work I've done is before that most of those studies had been done in rich, pretty temperate places.

So a big thing we tried to do was to collect data as best there isn't data for the whole world, but as best we could places that were representative of the whole world. What emerged from that, you know, a given hot day, 335, when it arrives in Houston. is way less harmful than when it arrives in Delhi.

Selecting globally representative data, or as close as possible, I think has deepened our understanding and it all seems to be pointing towards larger impacts than we had understood previously. 

David Keith: My last question, kind of the sequence is about the kind of relative importance of it just being a bit hotter with variability or a bit colder versus like this one kind of extreme day.

And I can't figure out a really precise way to ask the question, but the, the sort of high level thing is that in reporting about climate change, what we hear about are big floods or super duper heat waves, you know, for example, close to where Ed and I live in British Columbia, I'm now getting old and forgetting dates two or three years ago, we had that heat wave that burned Lytton and the Actually, British Columbia coroner had an official finding of some like five or 700 deaths associated with that heat wave, which is pretty stunning.

My impression is that the actual kind of econometric data that folks like you were developing shows that that most of the actual impacts, both economic impacts and mortality impacts are probably Kind of invisible. And yeah, again, my, my friend Jason Park has written what I think is kind of beautiful book called Slow Burn that kind of tries to illustrate that a lot of the climate impacts that really matter are not so obvious and don't report in the paper.

So that's a bit of a vague question. I want to know how you think about the kind of the one hot day versus the accumulation. 

Michael Greenstone: Let me just like go back to like kind of the raw statistics or econometrics. When this literature started, they were doing things like. Your favorite outcome of human wellbeing, maybe crop yields or something like that, uh, and annual average temperatures, what that was masking is that there's a very, just to walk out nonlinear relationship between, uh, temperature and your favorite measure of human wellbeing could be mortality, could be crop yields.

And so let me make that really precise. If a day goes from 20 to 21. It's impact on human well being is much smaller than if a day goes from 36 to 37. So that is a one degree change matters a lot where it's happening in the temperature distribution. And so my own view is that it's very important to relate these outcomes, even if they're annual measures of well being, like total mortality or something like that to daily temperature because of this non linearity.

And if you just average across all the days, that will. Kind of get aggregated, uh, down in ways that are not helpful. Helpful. Let me be precise. Not, not helpful is the wrong word. That obscure the true effect of temperature. That's what I meant to say. 

Ed Whittingham: So I'd love to go back, Michael, because you touched upon it and looking at the impact of pollution on health and cognitive abilities versus the impact of heat.

I'd love to sort of, if we can unpack the similarities. versus the dissimilarities. And I say this because I know you've done research on the Huai River policy in China. So maybe you could just tell us a little bit about that policy, but it also showed pretty conclusively the health impacts of particulate matter pollution from coal use for heat.

Then we could go to say, Are the impacts similar, and then ultimately, what I'd love to know is, should we be prioritizing one form of pollution over another, i. e., should we be prioritizing cleaning up particulate matter versus heat, just strictly from a health and cognitive ability standpoint? 

Michael Greenstone: So terrible of you to ask an academic to explain where the research came from.

We do it all the time. I assume this podcast is not four hours long. Look, what would we like to do to understand the impacts of climate change? Uh, we would like to have two planets, one where we did climate change and one where we didn't, and then we track them over time. We don't get to do that. We got the one planet.

Similarly with conventional air pollution and. Uh, human wellbeing, uh, what we would like to, uh, have is to run a real experiment, uh, where you had the two play one with air pollution and one, uh, without, and for years, I was bedeviled by the fact that we could not do that. I mean, maybe morally good, but from a research perspective, uh, that was challenging.

And so what we were stuck with was trying to understand the effects of pollution for a really polluted day versus a not so polluted day, or maybe a more polluted year versus But that's not really a question you want to know. You want to know what's the long run impact I wandered into and my coauthors, I wandered into finding out China back in the planning period.

They didn't have enough money to provide heating for everyone. And so they did something like out of a social scientist, like dreams. They arbitrarily drew a line across the country. And they said, if you live north of that line, you're in luck. Uh, we're going to build, uh, uh, heating systems for every building.

We're going to give you free coal from November 15th to March 15th. And if you're South of that line, forget it, buddy. No heat for you. No call for you. That was in place for decades. And I was like, Oh, wait a minute. I know what to do with this. What if we compare people for places that are just North to just South.

And when I did that, uh, what we found were very, very large differences in life expectancy, where the intended beneficiaries of this policy had. sharp reductions, uh, in their life expectancy, not just at old and young, but like elevated rates of mortality throughout their life. That changed my thinking, uh, cause now we had evidence on what long run exposure looks like.

And that looks like, uh, the impacts of particulates air pollution are much larger than we had previously understood. I started something called the air quality life index. You can go look up anywhere in the world down to like county level, uh, what the level of air pollution is and what would be the gain in life expectancy.

If your area went into compliance with whatever the national standards are, WHO standards, what emerges the average person on the planet is losing about two years of life expectancy. In place, very polluted places like India. It's more like five years in the U S and Canada. Uh, it's no longer than 1970s and it's much smaller.

So yeah, the costs of air pollution are quite substantial. I would call them, and I phrased this carefully, the greatest current, greatest current external threat to human wellbeing on the planet. And does that mean we should prioritize that over climate? I think that's a totally unfair and unreasonable question that, uh, what society should be doing is looking for opportunities to do things that have net benefits.

And so are there net benefits from reducing particulates? Hell yeah. Are there net benefits, uh, from confronting climate change? Hell yeah. And so they don't have to be, they should make competition with every other public project, uh, we could be doing. 

David Keith: And Ed, since you prompted me to jump in about the Clean Air Act, I can't resist doing that.

So, so, I think Michael did a great job answering that and I agree with precisely the way he said it about current risks. Then he gave an answer that's pointing forward in time. I want to bring up the backward in time thing, which is these. Very careful retrospective studies of the U. S. Clean Air Act and their equivalents in elsewhere in the world, but that's the one that's been studied the most, finds that the U.

S. Clean Air Act added roughly a year and a half is my understanding to the life of an average American, maybe even a little more, and the ratio of the net benefits of that monetized to the cost, the physical cost that the regulation imposed by, you know, making cars more expensive because they had catalytic converters and whatnot, that that benefit to cost ratio was of order 10 to 1.

And that is the benefits being 10 times higher than the cost round numbers, little less, I think that we don't appreciate enough and look back enough at how successful these government policies have been. And I especially think that in that kind of current political environment where, you know, Americans and people around Western democracies have a lot of, I think, actually legitimate questions about how effective their governments are about getting anything done.

And I think it's important to. Look at policies like that before to give you a sense of what government can do when it is doing something pretty effective. 

Michael Greenstone: I couldn't agree more, David. The clean air policies have been one of the best government interventions, uh, I don't know, last century or two. This is a tangent, I'm sorry, one of, and it's not quantitative, I love quantitative things, uh, but I read a sociological study about Gary, Indiana, pre Clean Air Act, and it was the case that the white collar workers.

Brought a second shirt in every day because by noon their shirt was so dirty they had to switch it and one other This is less tangential which I do not think receives enough attention is China declared at war on pollution in 2014 air pollution not co2 it has been remarkably successful much faster than Canada much faster than the u.

s. much faster than Uh, then you're up at reducing particulates, uh, air pollution. It's one of the greatest health, public health programs anywhere on the planet. And I don't think there's anywhere that it's been done as quickly. 

David Keith: Yes. And I think there was this weird way in which Westerners tended to just doubt it.

They tended to assume it was all propaganda, the Chinese government. And some of my colleagues at Harvard had independent measurements of, like, SO2 in the air in China, and it's completely clear that it's real. And I found that kind of revealing how people didn't want to believe it. 

Ed Whittingham: Yeah, I've got a quick story around that.

And forgive me if I've told this on the podcast before, but David and I in the late 2000s were involved in a small team that Harry Vredenberg, who was then at the Haskings School of Business, or I think still is at the University of Calgary, pulled together for a group of visiting professors from the Central Party University, visiting professors from China.

So we got together and spent an afternoon with them. And at one point in the conversation, we talked about premature deaths from respiratory illness related to air pollution. And they asked us, and all of this was being done through an interpreter, how many deaths that they were, you know, premature deaths happened in the United States on an annual basis from, you know, coal fired electricity, other forms of, of heavy air pollution.

And. David, if I recall, we guessed that it might have been 10 to 15, 000 kind of at that time per year. When we put the question back to them, they looked at us and they said 500, 000. And. I think that was an underestimate. I think that was propaganda because I've since seen numbers that at that point in the late 2000s, prior to China's big push and cleaning up its air, that, uh, it was actually, you know, a million to two million premature deaths from respiratory illness.

And that be interesting, the sociological effect is one of the big pushes for that cleanup came from the middle class and the emerging middle class in China, And due to the one child policy, because if you're an urbanite and you've got wealth, you're no longer thinking of just day to day existence, and you're only allowed one child, then you become very partial to that child's health, and then you become upset of that child, your little princess, your little prince, is going to die an early death from respiratory illness, and that really brought about the environmental protests that we saw In the late 2000s and early 2010s that led to China finally moving, 

Michael Greenstone: you know, it actually is this question I've thought a lot about, uh, like what lead why in 2014 in China and why in 19, you know, 70 72 in the U.

S. And I don't know the right year for Canada. I would say a few things have emerged from my study that one is like opacity is the polluter's friend. Uh, and when there's a lack of clarity of how much pollution and where it's coming from, like let the polluters get to let it rip. And so bringing transparency is often like super important kindling wood for then leading the policy and in the case of China, uh, what was really interesting is some combination of, uh, the U S embassy put a monitor, uh, on top of it.

Uh, and that really drew people's attention. Demonstrated that they were not getting reliable, incredible numbers from the Chinese government ones. And then, uh, there was, of course, also, if you were in China in that period, it was dystopian oftentimes, uh, that you couldn't see the sun. And then I, I, I don't want to claim this played a major role, but one, I wrote two of these wide river papers.

Uh, and one of them came out in 2013 and that kind of went viral and attached itself to the U. S. embassy thing. People were like, you know, saying this is causing me three to five years of life and how could this be? And the Chinese government eventually shut that down and my coauthors were no longer allowed to talk about it.

But the key point is research and transparency can actually be an important ingredient in, uh, into bringing about these kinds of societal changes. 

Ed Whittingham: Yeah. So let's let's spend a bit of time just talking about now the public policy dimension. So we know that public policy can bring down the risks of negative health impacts and mortality, both in air pollution, say, from particulate matter and climate, but you know, you're in the business of producing econometrics.

And you're also in the business, Michael, of talking to Congress. And we chatted, you told an interesting story of Ron Johnson, the senator from Wisconsin, Wisconsin. Who, you know, was in a flight of hyperbole, took out a map of Wisconsin, showing that it's going to be a net beneficiary from climate change, which prompted an exchange between you and Senator Johnson, maybe a bit more on that.

And then are these econometrics effective? Are you able to compel policymakers in a way that just talking about crop yields, for instance, or. Or the human capital side that they don't compel policymakers in the same way. 

Michael Greenstone: I think as we're moving into this new era, it's been unlocked by advances in computing and access to more data.

We're able to get much more localized estimates. And I think it wasn't very effective or motivating to say average global GDP would be down by three percentage points. Like, first of all, nobody lives at the average and. People can't evocatively relate to three percentage point decline in GDP in 2100. Uh, so I, I, I think you actually kind of need both.

You need the wrap it up number. Uh, my favorite is the social cost of carbon. That's the damages related to, uh, associated with the release of additional ton of CO2. But I think you also need this kind of granular information and then the granular information Uh, you know, produces things that people can take advantage of for good and bad.

Uh, yes, Wisconsin will benefit and, uh, probably large parts of Canada will, uh, benefit as well. But you got to add that up to where all the human beings, uh, live, live on the planet. That seems 

Ed Whittingham: to be a hard fact for people to accept because David has said that on the pod before of parts of Canada actually benefiting.

We've got tremendous listener pushback on that. It seems almost foreboding and sorry, David, you want to jump in on this point? 

David Keith: Yeah, I just think it's, I think it's so interesting. So I think, you know, Canadians who care about climate change, Canadians probably on the more liberal side, I would think almost uniformly think that climate change will be bad.

Research like yours, Michael, on, on the mortality, uh, and similar research on economic productivity suggests that the kind of warming we're talking about would be a net benefit for Canada, not every single Canadian, but it would be overall a benefit for Canada pretty, pretty clearly. The discordance between those two facts strikes me as really interesting.

And I want to throw in third fact that kind of gets at why it is that people don't believe experts and kind of the how these facts tie into people's, um, kind of intuitive sense of it. And, you know, all these Just to be blunt, kind of liberal, and I'm, you know, pretty lefty Canadian who worry about climate change, when they book holidays, and here I might not be typical, because I do book holidays going further north, but in general, when people book holidays or try to have second homes, they have them in Florida or some South place, they don't, you know, try and get them in like Northern Saskatchewan or a New Vic or somewhere.

So it's pretty clear that people like intuitively have the idea that a little warmth would be better. And the data suggests that. And yet there's this giant gap between the two things. And I really wonder how that plays out. If the kind of data that you are, uh, have developed becomes more. Publicly well known.

What happens? Do we get a kind of Ron Johnson moment where the Canadian right, for example, or Pierre Poliev starts saying, uh, you know, Michael Greenstone says we should benefit. So we don't support any emissions cuts at all. In fact, we should just pump more CO2 in. 

Michael Greenstone: Yeah, it's entirely possible. I think, you know, one thing that is a blind spot is To the kinds of work I do, uh, would be if there was like large scale, massive migration, or if Canadians cared about, uh, human wellbeing in other parts of the planet besides Canada, and they may, or they may not, let me take on your point, but make it a slightly different point.

I have a great solution for climate change. I know it. Uh, and it's really easy to describe it. We should take several hundred million, probably several billion people. Get them off the equator and put them in Canada and put them in Russia and places like that. And then the damages from climate change will be much, much smaller, not because anything physically will change, but because people that where people are located will have changed.

And so I don't know. I wonder as Canadians, if you guys would be in favor of that, 

Ed Whittingham: we can talk about this big event. That's going to happen tomorrow. I'm going to timestamp this recording, but tomorrow is the. US election and not at a couple billion, but a couple million per year coming up from Southern latitudes into the United States.

That seems to be a big Political problem in your country, and I will say that immigration is now a big political issue here in Canada as well, and our federal liberal government has just cut the, uh, the targets for new immigrants coming to Canada per year, but on a, on a political note and going back to an instrument that you've worked on, and you've talked a lot about Michael, well, you've talked about carbon pricing and David and I had a long conversation on the political side.

Of carbon pricing a couple shows ago, but you've also talked about the social cost of carbon and That policy seems to be a great political risk based on the outcome that's going to happen tomorrow. Because if I recall, maybe, and by the way, we're going to get to questions soon, but maybe just a little bit on the social cost of carbon.

It has been 50 bucks or so in the Biden administration. But when Trump came in, he lowered it, I think, to a range between, what was it, eight bucks or near zero. 

Michael Greenstone: You can decide if this is half full or half empty. When I worked in the Obama administration, I went there to work on setting up a cap and trade program for the U.

S. That flamed out terribly. But the president was super clear, we're going to do something on climate. I had the idea, well, then that's the only one I had this idea, but it had to go through the regulatory system. And if you're going to go through the regulatory system that is setting restrictions on how much CO2 emissions can come from power plants or cars or whatever, you need to be able to convert any reduction.

In CO2 into dollars, and that's what the social cost of carbon does. And so my idea was that the US government should have a social cost of carbon, and we set that, I think, uh, and then I, I co-led a process to set it using kind of what was the frontier of understanding, uh, at that point. And that produced the 50 bucks number that you, uh, you talked about.

I thought that was a great success of using research to kind of guide, uh, policy. It's absolutely true that when Trump came in, you know, without a scientific basis in 2017, he just turned the number down, like what you can do. He found it harder to defend in courts, but defectively they were able to do it.

So maybe that's the glass half empty moment. If you want to go back to, was there a subsequent glass half full? Yeah. The Biden administration came in and did a review of the evidence, uh, including some of the evidence. The climate impact lab that I've been co leading has put together and raised it to 225 per ton from either one to seven as Trump or 50 at the end of Obama.

And I thought that was, you know, it's a really wonky thing, uh, social cost of carbon and that a government was able to do that, I thought was, you know, I thought that was at least half full. What Trump would do this time. I don't know. It's, uh, been devised, set up in a much more politically durable way this time.

And could he change it? Yeah, but it would be a little bit harder this time. 

Ed Whittingham: Yeah, and you think, so the big landmark piece of climate legislation has been the Inflation Reduction Act. Uh, since it's topical, do you think that has political durability now? 

Michael Greenstone: I think there's parts, the tax incentives are pretty deep into the bloodstream, so they're going to be hard to rip out.

It's a big and unwieldy bill, so, uh, there'll be spending portions of it that I think will be easier to, But large parts of it, I think, will be very difficult to undo.

Ed Whittingham: Uh, let's get to Q& A. And the first question comes from Peter Poole, my old friend and David's old brother in law. And friend. Peter, I'm gonna read your question. He says, This summer, two different studies were published about the macroeconomic effects of climate change. The first study out of Cambridge University by Mohades and Raisi.

The second study out of the National Bureau of Economic Research by Bilal and Kanzig. These studies seem to indicate a much higher set of costs for climate change on the broad economy than prior studies. Can you help us make sense of these? And then he adds, that's almost like a footnote or would a discussion of these macroeconomic papers be more appropriate for another energy versus climate episode?

Oh, Peter is letting his inner geek rip. Oh yeah. Yay, Peter. You're in the right, you're in the right 

Michael Greenstone: place. I think what's that debate there is. Whether or not, uh, climate affects the growth rate of economies over time or just is kind of a marker, uh, shifts them, whatever the growth rate was going to be, shifts the level down.

There is definitely some emerging work on the growth rate. It's not really my style and it's not my style by choice. I would say in the sense that really I'm a kind of a bottoms up person. I want to see touch feel and. Those studies kind of, they, they, by their very nature, they're effectively relying on a couple hundred observations.

Whereas the work that I like relies on millions and millions of observations. Uh, and you can have a much more careful understanding of, uh, what, what the impacts are in the case of the Bilal and Gantek study, they're really relying on very few observations and. Uh, I think it can be somewhat sensitive to all kinds of wonky specification choices.

So I'm on the, uh, build it up from the bottom approach at some level. Uh, both what's coming out of the build it up from the bottom and these, uh, macro studies produce social costs of estimates, social costs covered that are substantially larger than the costs that any society around the world seems to be willing to endure right now.

So is it, you know, are the growth ones three times too large, four times too large, five times too large? I don't know, but there's, you know, even the micro ones are, uh, Several times larger than, uh, the costs we're willing to impose on ourselves. 

David Keith: I actually have one related question is, some people have told me that, that these new estimates are much bigger.

And that was one particular example you just offered, but actually thinking of even your own estimates in the Carlton et al paper. And yet, when I tried to look at the kind of mean answer to Carlton et al paper and just compare back to the original guess that Nordhaus had for the cost of two times CO2 in the first Nordhaus paper, which is based on some little expert elicitation, vague thing he did in about 1980, if I remember right.

The numbers were not that different. Now that's not to shortchange the work you've done. Always. We certainly know the answer much better, but it feels like the actual answer hasn't got much bigger in the mean. Is that fair? 

Michael Greenstone: Uh, I don't know if that's true. It depends on how much you're willing to bring economics.

In the bear, uh, and what do I mean by that? What you just said is true about the Carlton et al paper. Uh, and some of the early Nordhaus stuff and, you know, without a person, same answer using very different methods. You have to decide which method you like more. One thing we have not appreciated and had been brought into these estimates very well, I think is that.

Where and when the damages are going to occur and our uncertainty around those estimates. We've treated the governments or the social planner as risk neutral. And that is like, do we think a dollar of damages to a poor Indian is the same as a dollar of damages to Canadians? Maybe, uh, right now, most of the estimates do behave that way, uh, or have that assumption.

I don't actually think that's the right assumption. They have not done a very good job of bringing in uncertainty. Uh, that is if you know, the damages are going to be 2 percent and, but you think there's a chance that they could be 10%. And, uh, and a small chance of them being, uh, 1 percent benefits. Would you feel very different than if you knew it was 2 percent with certainty?

Uh, I think you would. We buy insurance all the time, uh, house insurance and fire insurance for exactly that reason. And so as we start to bring these kind of, recognize both that the damages are not equal around the world and when they occur matters, uh, and how uncertain we are, as we start to bring that into our, uh, Reasoning and estimates.

Uh, I think it's leading to much larger estimates, uh, than we had before. And I don't think that's been fully absorbed and nor is that in the comparison you just were referencing David. 

David Keith: Fair point. 

Ed Whittingham: Yeah. Maybe to Peter's point, I, I'm now thinking we could do a whole show on the inequities, either. likely or real or perceived of climate change around the world, uh, and how those, uh, cost impacts or difference depending where you are.

Michael Greenstone: And actually, you know, let me say the sharp way of saying one of the points I was just making is, you know, Hey, do we feel the same about everyone on the planet getting their incomes reduced, uh, by 2 percent or, and 2 percent of people dying probably don't feel the same. Well, 

Ed Whittingham: no. And, and we've talked about Kim Stanley Robinson's book.

Uh, ministry for the future. A few times we had Stan actually on the show talking about it in his book at the outset, 20 million people in India die from a heat event and the world's response was that's terrible. But you know, we're not going to do much. And then in his book, India starts unilaterally use solar geoengineering as a way of trying to counteract that heat effect.

But then it took 15 if I recall the number Correctly. It was 15, 000 people dying from a heat event in the United States. And then suddenly the United States got serious. And when the United States got serious, then things really started to move work of fiction, not hard to imagine that playing out in reality.

Michael Greenstone: I think what the last couple of years are really highlighted around the world is. Lives are not all equal in the way societies make decisions. Uh, some lives seem much more valuable than others in, in motivating action. 

Ed Whittingham: Very 

Michael Greenstone: true. 

Ed Whittingham: Um, Walter and Drief has a question. How can we better connect the public health aspects of wildfire emissions?

To the Alberta population, my home province, and David's as well. Here in the rural north, we are hit harder by a longer wildfire duration of the smoke and the concentration of pollutants. Have you looked at, I mean, you've looked at particulate matter from coal fired electricity and the Hawaii River policy.

Have you done anything specific to wildfires? 

Michael Greenstone: So the climate impact lab, uh, uh, is this group of climate scientists, economists, uh, and computational experts were constantly trying to add new sectors. So we've been talking a lot about our work on mortality. We work on, uh, how it affects labor supply and, uh, storms and energy consumption, agriculture, wildfires, like in the production process.

So, uh, maybe you'll have me back one day when we have that paper finished. 

David Keith: I, I can say, and this is my first plug for a new book I'm writing, I'm trying to write a new popular book and I'm trying to deal with adaptation and adaptation is so vague. I wanted to actually have a personal piece, my own family in Alberta and then a place in Bangladesh.

And so I've been trying to actually figure out from the academic literature. What my chance of dying and my family's chance of dying, how much has changed from wildfires in Alberta. So that's complicated because you've got to go to changes in smoke, which we know, then you've got to attribute how much of that is temperature versus changes in forest management.

Then you got to convert to, to, to mortality. And then what I'm doing with adaptations is sort of thinking about, well, we've. Bought ourselves a, uh, indoor out filter. I know what that costs. And so I can kind of make a cost of differences. So I'm actually trying to play that all out for my family. So stay tuned when I eventually finish this book, but I'd say the answer from actually trying to look at Alberta data and wildfire mortality is it's pretty hard to get good numbers.

There's papers aren't quite there yet. 

Michael Greenstone: One thing that came out of our work, uh, that I found very striking is if you lined up the world by deciles of income, the. Poorest 10%, the second poorest 20% is 10%, et cetera, et cetera, all the way to the richest 10%. What you would find is our, our, our, based on our research is there will be large increases in mortality rates in the bottom, I dunno, 3, 4, 5 deciles, uh, of income, uh, due to higher temperatures and.

They will do very little spending on, uh, at, uh, adapting. They're not really rich enough to do it. In contrast, at, in high income places, uh, there'll be almost no death. And actually we've talked in some high income places will be declined, uh, on average will be almost to death and lots of spending on adaptation costs.

So if you want it to be like super nasty, what you would say is that climate change is going to cause the poor to die, uh, and the rich to spend some more money on, uh, I guess air conditioning. You know, I don't know. How are you supposed to feel about that? 

Ed Whittingham: Well, that's, that's your climate justice point around.

We should really be opening our borders further to try to get those people in middle latitude equatorial States who are most at risk. into our country, A, so they're exposed to less heat, B, so that they're able to earn more income, so the heat they are exposed to, they can adapt to. 

Michael Greenstone: So, Ed, I did not advocate anything.

I was just, uh, stating that the bad, the impacts of climate change, uh, will be much more advantageous in northern latitude places than at the equator. 

David Keith: I'll say I feel pretty sad for the lack of fellow feeling that people have for their, uh, For, uh, 

Michael Greenstone: fellow humans. Oh my God, David, was that a Canadian thesis for living?

David Keith: That was my, that was my comment. Anyway, Eddie, going to get the last question? 

Michael Greenstone: I don't think that's going to be on an American podcast. 

Ed Whittingham: Yeah. Yeah. Tom Cullen, welcome. And, uh, you can ask your question live. 

Tom Cullen: Um, and I guess this, uh, this is sort of a follow up to the point about personal impact versus global impact, like us in India versus whatever, a lot of things, um, purely personal that really pisses me off about climate change and the lack of action, um, in Canada is vector borne diseases and specifically Lyme disease.

I grew up, I mean, I'm 70 And I, uh, I'm like, I never had to worry about growing out in the country and going on canoe trips, blah, blah, blah. Uh, worry without worrying about, uh, ticks and Lyme disease and whatever else is out there. My question was. How much does the saddle it impact and anxiety related to things like vector borne diseases, uh, factor doing just studies like this.

Michael Greenstone: Thanks. Let me just answer that question narrowly, uh, to the degree that they're correlated with. Temperature, then I'm some of my work and work with my colleagues and I is capturing it, but, uh, I suspect that's not capturing the full picture. Gotcha. 

Ed Whittingham: So it's just one of those known unknowns at this point, Michael, on behalf of myself and David and Sarah in absentia.

Uh, we want to thank you so much for coming on Energy versus Climate, sharing with us your, your research and, and your findings. It's been really useful. Thanks very much. 

Michael Greenstone: Thank you for having me. It was a lot of fun. 

Ed Whittingham: Thanks for listening to Energy versus Climate. The show is created by David Keith, Sari Singh Simon, and me, Ed Whittingham, and produced by Amit Tandon.

With help from Crystal Hickey and Vanuki Arachichi. Our title and show music is The Wind Up by Brian Lipps. This season of Energy vs. Climate is produced with support from the University of Calgary's Office of the Vice President Research and the University's Global Research Initiative. Further support comes from the Trache Family Foundation, the North Family Foundation, The Palmer Family Foundation, and you, our generous listeners.

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