Economics, Science and Climate Change

The Intergovernmental Panel on Climate Change (IPCC) contends that global warming is largely due to the burning of fossil fuels, leading to increased carbon dioxide (CO2) concentration in the atmosphere. This theory is tested with global data from three different periods – the last 1,000 years, the last 120 years and the last 18 years. Two models are specified: firstly, to determine if there was global warming in each period, and secondly, what role CO2 played in this. The results cast significant doubt on the IPCC model and therefore on the wisdom of climate change policies already implemented in many western nations. The economic consequences of these policies is then analysed in the effects on economic activity, energy supply, industrial output, emissions trading, consumer behaviour, and the financial cost of obtaining a global agreement on CO2 emissions. The article notes that the IPCC model is currently failing to predict global temperatures accurately and is too simplistic in its neglect of the natural causes of climate change. Hence, policies enacted by many western nations are likely to impose large costs on their economies, but have little effect on the world’s climate.