Global Warming, GMOs and economics: the big picture
12 January, 2004
A story of grand narratives, models and smoking guns
[A note: this bit of work arises partly because I have just reviewed
Brude Caldwell's "Hayek's Challenge: an intellectual biography
of F A Hayek" (Chicago, 2004). It reminds one how vigorously
intelligent economic debate has been compared with its ecological
counterpart. But also how inconclusive such debate can be, however
One way of discussing the two highest profile environmental issues
is to compare the way we discuss them with the way we talk about
economics. After all, they similarly involve arguments about how
we understand complex systems and if, when and
how we should try to manage them. The technique has this advantage:
we have spoken about economics for centuries. Our successes and
failures there may help us in the new anxieties.
This approach suggests we ask of the environmental issues the kind
of thing we ask of economics: Do we know much about these systems?
In particular: do they yield evidence to us? With the available
evidence, can we model these systems adequately? In the degree to
which a model reflects reality well, do its results constitute evidence?
Are models good at prediction? If they are not, how do we make policy?
There is one profound difference between economics and atmospheric
science and ecology. In the one case, we are trying to stimulate
human activity (admittedly of a particular sort) and in the latter
it often looks as though we ought to stifle human activity
and across quite a broad spectrum. This matters a lot.
But even here, we can see a similarity in the various responses
people have to calls for restraint. In life and we have seen
this for centuries in the way economics is discussed - there are
Puritans and Cavaliers, Conservatives and Progressives, left and
right. And though there are many counter-currents and complications,
the easiest way of seeing the difference between them is to divide
people into those who want there to be lots of policy in the world,
and those who want as little as possible.
This is not a matter of what they expect, or accept, or can understand,
but what they prefer where their heart lies. I, for instance,
accept that policy is vital and interesting (and the highest profession,
possibly), but I want there to be very little of it. I think a happy
society is one which there is little need for policy. On the other
hand, I note that there are many people who seem very happy to try
to persuade their fellows of the merit of myriad policies, and tend
to admire societies with lots of rules.
One of the similarities between environmental and economic issues
is that they are bedevilled by similar Roundhead/Cavalier splits.
They have both seen campaigns waged on broadly similar grounds,
between left and right with the right
being broadly laissez-faire and the left being interventionist.
These polar-opposites are widely supposed to hugely influence the
evidence which their proponents accept, and the factual conclusions
they come to as to the nature of the world (the economy, the environment)
they are discussing. (We will see that the left-right polarity is
a caricature, and anyway breaks down in interesting ways.)
And similarly between all our subjects, people often base their
conclusions as to policy on merely normative grounds
that is, derived from prejudice or conviction) as opposed
to being based on facts (derived from evidence). Indeed, since a
fact never has an opinion what would it mean to say one based
a decision on a fact? One often hears it said that recycling is
a good in itself, even if it can be proved that in this or that
case it is less ecologically sound. This is very similar to the
suggestion that highly progressive taxation is a good in itself
even if it is not optimal as a revenue-raiser. (Recycling, it is
argued, enshrines good thrifty principles, just as progressive taxation
is a moral stance against inequality.)
Finally, the comparison between our campaign issues
and economics is valuable, if real, because we have much more experience
with trying to derive policy from economics than we have with the
environment. We might want to be modest or bold in
formulating environmental policy, and might want to shape it in
particular ways, according to our view of how economic policy had
We are dealing with complex systems: the worlds atmosphere,
the worlds biosphere. To what extent are we dealing with cool
facts (positive issues), and to what extent with opinions (normative
We have no evidence about global warming. At least we have no verifiable,
falsifiable facts about it. We have no smoking gun which
links a thickening greenhouse to our current rather warm decades.
But we have some decent assumptions that we are likely to be warming
the planet. We have circumstantial evidence rather than cause-and-effect
evidence. But given that we are almost certainly changing something
which is fundamental, we are bound to think about it. Besides, we
lock up most criminals on circumstantial evidence: its the
basis for a lot of other actions.
The study of global warming is of course a science (it seeks hypotheses
and theories to fit such facts as we have about some aspect of the
natural world). But it is not a science in this sense: it has no
experiments. Indeed, as Mrs Thatcher said, the whole of anthropogenic
global warming is one huge experiment. This means that it has no
precedents, so no track record is available for its study. What
is more, there are no elegant little subsets of it which we can
pick up and study in isolation.
Economists face some of these problems, but with fewer disadvantages.
They can make experiments, of a kind, but they are so unreal that
they dont prove much. They gather data, but it doesnt
get them very far. Economists have centuries of real-world material
to work with, but still argue about every element, large and small.
They ask: is economic man a reality; rational; selfish? And then
they argue all the way up the scale to the global economy. They
seldom agree a description or a proscription and their agreements
are often within clubs convened on ideological grounds, not evidence.
Broadly speaking, GW science is very like much economics study:
it depends on models. We make equations of as many of relationships
as we think we understand, and run them through a computer. We do
this though we know that in economics the ability of models to replicate
or predict real-world circumstances is slight (and is improved often
by fiddling with the inputs until the reality-match happens). In
the GW case, we apply our supposed outcomes to systems which we
similarly model, such as biodiversity. We may be heaping fallibility
on fallibility as we attain what may well be a spruious precision
in our predictions.
As we move on to respond to any supposed global warming, our understanding
of economic policy should also make us sceptical. We know that unintended
consequences plague economic policy. Besides, we know that marginal
influences exerted by policy are very hard to detect against the
noise in the system. And then we might reflect on the
fact that one of the difficulties in policy-making for large economic
systems is that they are non-linear (perhaps thats what defines
complexity anyway). The atmosphere is a non-linear system as well.
We do know something about economic success: we have many success
stories to base our ideas on. But the stories are very various,
and mostly confound the ideological certainties of left and right.
(Wealth creation depends on markets and entrepreneurs, whose activities
depend on very non-entrepreneurial institutions. Policy is crucial
to markets, but can kill them.)
But whilst there may be similarities between the study of economic
and environmental systems, surely there are big difference too.
A distinction between economic and environmental policy: if you
want to create wealth you need to set greedy people free (within
limits, and within some policy frameworks). But environment policy
wholly depends on restraint being imposed, surely?
Well no. There are the obvious thoughts that the cheapest way to
get an environmental solution is often to set entrepreneurs to deliver
it and anyway, many environmental problems are caused by poverty
or can be relieved only by the rich.
There is more to it than that. In democracies one cant impose
restraint at all: there has to be a demand for it. Here there is
a similarity between economics and environment. Leave aside whether
we had too much welfare in the second half of the 20th century,
we had welfare as a function of affluence being combined with democratic
demand. And so will be the eventual acceptance of whatever policy
is deemed necessary to address, say, global warming. Affluence will
not be crucial to satisfying any demand for measures to address
global warming but it may make it far easier to get the willingness
to deal with the problem. (The cost of addressing global warming
may be better borne by the rich though they may be the most
reluctant to curtail their pleasurable excess. It works both ways.)
The essence of this similarity is this: in much economic and environmental
policy, policy will be imposing limits on human greed. In neither
can you act until the political climate allows; in both you are
seeking regulation which will go as well as possible with one of
the facts of politics that peoples greed must not be
The global warming debate is conducted by parties with considerable
The global warming consensus is fuelled by government
money which seeks agreement that there is a problem (if there were
no problem, there would be no funding, and a consensus is insisted-upon
because the funders seek policy). It is supported by NGOs because
it fits their view that mans greed is damaging his planet.
The contrarians are a ragbag of more differentiated
types. Some (the neo-Marxist RCP/LM/Spiked/IoI/SoS group) perhaps
seek an energetic and progressive unfolding of the capitalist
world of technology, opportunity and affluence. (We dont know,
because they dont say.) They certainly hate the precautionary,
repressive urges of greens and others. Some contrarians (Matt Ridley,
perhaps RDN, perhaps Lomborg, perhaps Stott) have an intellectual
distrust of green orthodoxies, and perhaps orthodoxies in general.
Others (many American corporates) and possibly politicians,
too - take elements of these tendencies, but are highly-motivated
(perhaps temporarily) to maintain business-as-usual.
Note that the NGO supporters of the consensus and the contrarians
ought both to be embarrassed by their positions: global warming
reverses the normal preference of each side. The former normally
distrust reductive science, and the latter normally
support it. The NGOs get out of this by ignoring their embarrassment
and the contrarians insist that is they who are deploying scientific
method, by challenging both bad science and orthodoxy (challenging
the latter is the core of scientific activity).
The public probably quite believes that global warming is big,
bad and man-made. In spite of that, it enjoys the uncertainty (which
makes action unnecessary) and hopes there are no-pain solutions.
It badly wants cheap energy and unlimited freedom to burn it thoughtlessly.
That sloppiness of thought could change, if the evidence became
clear. Besides the Post-Modern may deliver less interest in mobility
which would solve many global warming problems, and a few
The economic parallel is strong if we think of the way that left
and right think about economic matters, and make them thoroughly
partisan. That is, after all, the basis of a large amount of academic
discussion and a huge amount of political activity. But there is
this difference: in economic matters there is some sort of divide
(not total, and not fixed) between the rich and the poor. More or
less, and with exceptions, the poor favour intervention (especially
redistributive taxes) and the better-off dont. Of course,
many middle income people, and some rich people, are strongly redistributive,
but overall it is easier to canvass for low taxes in rich neighbourhoods
than poor ones, and vice versa.
A left-right division exists in environmental matters, but it is
not income-determined. Nor does it correlate with education terribly
well. More, we see amongst the small minority of the population
which interests itself in environmental matters a divide between
those that are interventionist (a large majority) and those that
are not (a small minority). Much (not all) environment policy happens
because a relatively small but powerful group exert pressure on
the body politic. In economic matters, it is a large group of people
who are not individually powerful which achieves policy intervention.
(It is easy to think up challenges to this contention, but such
challenges have to meet the objection that tax policy is a populist
issue, in both directions, whilst environment never has been.)
Here the debate is much simpler, but also darker. (We can come to
the economic dimensions later.) It concerns health (which we can
dismiss as uninteresting for now) and ecology.
Ecology and GM
Ecological opinion is divided as to the various problems (outcrossing,
pesticide resistance especially). But most informed (as opposed
to passionate) opinion suggests that the parallels between, on the
one hand, biotechnological modification (GM) and, on the other,
conventional genetic manipulation, are so close that
we can guard against the worst effects of one as we have against
the other. (Unavoidable or careless alien species introductions
help make this case).
Besides, this is a series of piecemeal experiments (some with potentially
irreversible outcomes to be sure), whose actors are relatively few
(groups of farmers) and whose field of damage is likely to be small
if any (regions, countries, etc). (This is in sharp distinction
to the global warming effects, which are planetary and caused by
every human.) What is more, most informed opinion stresses that
GMOs are good or bad, not in themselves, but according to the various
agricultural regimes (pesticide-use, etc) that millions of farmers
will use alongside them. Even those scientists who fear GM, tend
to fear its implementation, not its principle.
So with GM, we have experiments, smoking guns, cause-and-effect
effects. Compared with global warming, we are doing less extrapolating,
less reasoning from small evidence.
Still, many of the wings of this argument are similar to those
in the GW case. The greens argue precaution, and are opposed by
the neo-Marxists. But there are profound differences in the arguments
of nearly all other players.
The corporate case for GM relies on its human welfare benefits
rather as those in the pharmaceutical industry do. Food production
is a little like health provision: the sense of human need, and
the risk assessments, are similar. (Though, contrariwise, GM is
accepted without demur in its health product applications
it is only controversial as a crop or as food.) By contrast, the
oil and automobile industries have been more likely to stress the
needs of economic growth when they defended unfettered use of fuel.
Scientists involved in GM behave very differently to those involved
in GW. The scientific establishment, for example (the Royal Society
especially), are seized of the irritating thought that almost all
the anti-GMO arguments (those that are against it irrespective of
particular applications) are un- or anti-scientific. But they strongly
stress that it is in the management of the technologys use
that the issues really lie. Indeed, it sometimes seems to bend over
backwards to accommodate the uncertainties involved (presumably
so as not seem to have been co-opted by the corporate interests
that promote GM, and so as to give no hostages in its battle against
the unscientificity of the green anti-GM crusade). The RS, for instance,
seems less excited by the evidential weaknesses of the GW case,
and it is not the handling of that issue that has given rise to
its anxiety about the public understanding of science.
Further differences between GM and GW
There is a no grand theory of GM as there is a grand theory of
GW. This is because there is no one complex system within which
GM works or which it risks damaging. Thats part of the reason
why the case for or against GM doesnt depend on ones
belief in modelling in general or any particular model. (So the
GM debate is less like the economics debate than is GW.)
The GM debate does have one very large ideological component. This
is the unnaturalness of playing God which
moves some anti-GM people, and perhaps most moves those who cheer
them on from the sidelines.
Whats more, the GM debate has this further ideological component.
It is seen as a technology driven by large seed firms and large
farmers, and is therefore quite prone to the left-right tensions
exploited by anti-capitalists and anti-globalisers, in a way which
Similarities between GM and GW: the power of agendas
The Post Modern geographer Philip Stott uses the idea of competing
grand narratives to explain how environmental arguments
work, and hes right to (and the technique has the merit of
reminding us of economic similarities). Broadly - according to Stott
and others - there are those who favour human adventure (and are
progressives) and those who favour a respect for
nature (and are green). (A subset of the former
view stresses that nature includes human adventurousness.)
Oddly, this Grand Narrative divides people who are allies on other
matters. This is because they are conventionally green
in their wariness of messing with nature. Thus, they dislike GMs
enemies (for being anti-scientific) but would be quite cautious
in allowing GM use. In short, they are conflicted.
Contrariwise, one suspects that most scientist members of the GW
consensus have no difficulty promoting it, and are largely irritated
by those contrarians who challenge any part of the consensus view.
Few of them are conflicted on the issue.
The green Grand Narrative is accepted by many scientists, along
with left-of-centre politics. This is not surprising: they are often
publicsector workers, seldom operate as entrepreneurs, and
are part of a wider academic culture which is broadly dissident.
Besides, to be green is even more common than to be left-of-centre:
it is the default position of the majority in society (except
and its an important caveat on matters affecting their
wallet or convenience).
This means that scientist often worry about GM whilst theres
very little scientific evidence that they should. But scientists
contrariwise are very happy to worry about GW even in the absence
of much evidence that they should (or that they can do much about
It is often said that on ecological matters, the green Grand Narrative
has close parallels with religious feeling. That is true. Greenness
is also on rather similar lines - a surrogate for virtue.
But it has this convenience to its adherents: it often proposes
a virtue which seems free to those that aspire to it. Thats
to say: it seems to them (probably falsely) that it is cheaper and
easier to espouse green virtue than it is to espouse economic virtue
which requires a more obvious and greater generosity. (It
is moot whether middle-class socialists are being generous when
they accept high taxes for themselves: churn and other
effects make them believe high-taxes are good for them.)
Progressive or green prejudices, and their effect on policy
If you are a progressive whether a scientist or not - you
hope that it turns out that the risks of GM and GW have been overstated.
You want not to have to do anything to halt either. (But not necessarily
to the point where you would rather ignore the risks if they are
If you are a green, you dont mind if the risks turn out to
have been overstated. That way, preventative action will be spurred.
(Thats not to say that a green hopes the risks are large:
most greens dont hope for disaster, only for action. However,
greens are in the position that bad news is good - the journalists
As one considers the evidence about GM, one notices that it can
be real (observable), and it can arrive piecemeal (in real, often
quite limited areas). These factors make a precautionary stance
less urgently necessary (because one most needs precautionary prevention
when the evidence is slight and the risk high).
As one considers the evidence of GW, one notes that the precautionary
principle is well-applied, because the evidence is slight and risks
huge (which is a prima facie case for preventative action).
However, any policy response even a precautionary one
must also be judged on its likely efficacy. We are indeed very likely
to be able to halt the risk posed by GM (at least in the UK, say,
where we could ban GMOs), but we cannot be spared the risk posed
by GW (it will persist at least for decades in the face of all plausible
action to stem the emissions which cause it). We might in time address
GW quite easily, and even be willing to do so. For the time being,
only trivial avoidance or adaptive strategies are likely.
(This leaves aside altogether whether a ban on GMOs could survive
precautionary analysis of the dangers posed by not proceeding with
the technology, and the case for GM in farming worldwide.)
In the UK, it is argued that the benefits of GM are slight, so
green people (even those who are science-led) feel very little emotional
attachment to progressing the GM cause. And it is argued that the
costs of addressing GW might be very high, so even green people
(including those who are science-led, if they are honest, and consider
the pain that might fall to them) are reluctant to do
very much about it.
Global politics and GM and GW
It is quite possible that in spite of the scientific consensus
- the worlds countries will fail to address GW in a way which
avoids further warming so we will be condemned
to adjusting to whatever unfolds.
It is likely that the worlds countries will mostly grab at
GM, and that if the view of the majority of scientists is
right, and sufficient care is taken - there will be some benefit
and scant harm.
RDNs position on GW and GM.
I am ordinarily green but with strong progressive
tendencies. I am in love with science. I dont like interfering
with peoples freedoms if it can be avoided. That makes me
a very conflicted type. I am not in denial because I
constantly stress the foregoing.
I am conflicted about GW because I am not sure how scientific the
scientists in the consensus really are. I dont trust
our historic ability to understand or model complex systems (pace,
the economics case) yet I am drawn to the idea that we might be
able to. I think humans must take risks, and wont bear much
pain to solve future or distant problems. I think the
rich of the world could quite soon and without much pain live our
present lives without many emissions of greenhouse cases (and this
will eventually probably not soon be true of all humans).
I do not believe our present views on lifestyle are at all fixed:
we may change our demand for space and movement either because
we must give them up (as a result of GW policy) or because of technological
and cultural changes.
Indeed, it is very arguable that to be progressive
takes us toward addressing GW. Greenhouse gases arise from old-fashioned
energy sources: to be modern will be to get beyond the need for
All the same, I hear too little discussion of how to tackle greenhouse
emissions equitably or efficiently let alone on the scale
apparently required. I am not inclined to trust that we will choose
wise policy granted the poverty of the discussion. (Lomborgs
discussion of GW and the policy response to it was only novel in
being strongly consensual on the matter of GW and mildly
contrarian on the matter of dealing with it and
he was excoriated for it. His positions were entirely derivative,
and yet he was criticised as though he was developing new heresies.)
If I was a policy-maker, I would weakly muddle along roughly according
to what was electorally possible, as the US and EU leaders do, whilst
generating intellectually plausible rationales for my action (or
inaction), as they are doing. I would be energetically promoting
the discovery of least-cost regulatory devices designed to swing
the market into addressing greenhouse emissions as the western
world is more or less doing now. I hope I would aim to be a little
more vigorous on the topic than most leaders are, and thus risk
losing popular support.
As a commentator, all I can do is try to improve the quality of
RDN on GM
I am convinced that GM technology is likely to be agriculturally
and ecologically useful, and will prove itself so without harm.
However, the choice to grow or eat GM crops does rightly lie under
democratic control, and if GMs are unpopular in the UK, I cant
see that it matters very much that they are not grown or consumed
here. Indeed, there is a case for arguing that it is properly the
business of the British electorate and no one else what we grow
or eat here, however unscientific, green, or even religious
that impulse is.
It will not be particularly noble, but it will probably emerge
that GM becomes uncontroversial in use all over the world, and that
Britons will profit from the technology (whilst not allowing its
use near them) and eventually turn to its use at home. If that transpires,
one hopes they will be embarrassed by their folly in eschewing the
technology for so long, and their readiness to own shares in firms
which pioneer the technology whilst themselves voting not to use
The GM case will remain an important litmus test for the willingness
of Britons to enrich their view of nature sufficiently for it to
allow technological progress.