U.N. Ignores Economics Of Climate

The global economy must be transformed immediately to avoid catastrophic climate damage, a new United Nations report declares. Climate economist William Nordhaus has been made a Nobel laureate. The events are being reported as two parts of the same story, but they reveal the contradictions inherent in climate policy—and why economics matters more than ever.

Limiting temperatures to 2.7 degrees Fahrenheit above preindustrial levels, as the U.N.’s Intergovernmental Panel on Climate Change urges, is economically and practically impossible—as Mr. Nordhaus’s work shows. The IPCC report significantly underestimates the costs of getting to zero emissions. Fossil fuels provide cheap, efficient power, whereas green energy remains mostly uncompetitive. Switching to more expensive, less efficient technology slows development. In poor nations that means fewer people lifted out of poverty. In rich ones it means the most vulnerable are hit by higher energy bills.