Major studies projecting massive economic harm from future global warming rely on “overheated” economic models and poor underlying assumptions, according to a new report.
“Studies that produce very high estimates of the economic and social costs of projected climate change” while “ignoring or downplaying the possibility of adaptation and obscuring the inaccuracy of underlying estimates — are distinctly unhelpful,” Manhattan Institute senior fellow Oren Cass wrote in a March report.
Cass examined the models and assumptions used in major economic studies of global warming, including two relied upon by the U.S. Government Accountability Office to estimate damages by the end of the century.
One of those study’s poor assumptions, relating temperature with economic growth, led to projections that global warming would turn Mongolia, Finland and Iceland into the world’s wealthiest countries on a per-capita basis.
The results were highly “flawed,” Cass said.
“Properly understood, temperature studies do not offer useful predictions of the future costs of projected human-caused climate change,” Cass wrote in a study published Monday, adding that while flawed “these studies have gained rapidly in prominence” and “now account for the overwhelming share of costs in climate assessments.”
Cass took particular issue with a 2015 study published in the journal Nature that predicted global warming could reduce per-capita gross world product 23 percent by 2100.
In other words, the study predicted every person in the world would be 23 percent poorer by the end of the century. Media outlets breathlessly reported the study’s results, warning millennials they could “lose trillions of dollars in lifetime income” to man-made warming.
However, Cass pointed out some glaring issues with the study’s underlying assumptions and modeling.
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For starters, the 2015 study projects Mongolia would become a global economic superpower by the end of the century and boast per-capita income of $390,000, which is four times higher than America’s at that point.
In fact, Icelanders become the richest people in the world in that study’s projection. Iceland gets a “per-capita income of $1.5 million, more than twice that of any other country besides Finland ($860,000), with annual economic growth above 5% and accelerating,” Cass wrote.
Canada’s economy grows to be the world’s second-largest behind the U.S.’s by the end of the century, the study found. Canada’s economy is estimated to be a totally implausible seven times larger than China’s. India, conversely becomes the world’s poorest country by 2100.
Cass pointed out that “one must believe that a gradual rise in average temperature from 0° (32°F) to 5°C (41°F) will turn Iceland and Mongolia into the leading economies of the 21st century,” which is not only highly implausible but also a highly illogical way to view economic growth.
The Nature study suggests “the Cambodian economy is far more dynamic than its American counterpart, held back from world domination by its latitude,” Cass said, noting a “more plausible conclusion is that responses to large, gradual temperature changes are qualitatively unlike responses to small temperature fluctuations.”
In other words, the Nature study is seriously flawed.
“Temperature studies insist that even marginally warmer temperatures make people and the economy worse off; yet for generations, the American population has insisted on migrating southward,” Cass wrote. “Are people doing so against their best interests, or are the statistical analysts missing the bigger picture?”