May 28th, 2023

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Still Another Look at Global Warming

Professor Ferdinand E. Banks
February 5, 2008
The University of Uppsala, Uppsala Sweden

David Stipp of Fortune has referred to climate change as “the mother of all national security issues (2004).” I see no reason to disagree, since as explained in my new textbook (2007), a peaking of global oil production in the near future could be labeled the father. Moreover, these are related, because when oil becomes less available, the use of coal will be drastically boosted. I also enjoyed emphasizing that one of the differences between a climate meltdown and a peaking of global oil production is that many persons reading this contribution are certain to experience the latter; and although less traumatic than the former – should the former take place – it will not be the kind of rendezvous that Frank Sinatra described in those marvellous songs that accompanied our après ski revels at Courchevel and St Anton.

Unfortunately, when the topic is (presumptive) anthropogenic (or man made) global warming (AGW), we have a situation where politics and psychology play a role that cannot be ignored, which means that we cannot always call on altruism or logic to provide us with optimal guidelines. Increasing numbers of people are willing to sacrifice a modest amount of money and/or comfort in order to help keep the environment in a seemly condition, but when the bad news might originate dozens or hundreds of years in the future, of unknown extent, involving societies whose compositions are unknown, then taxpayers and legislators might find it laborious to endorse even small expenditures. As Professor John Kay once pointed out, “the burden of caring for all humanity, present and future, is greater than even the best-intentioned of us can bear.”

It has certainly become greater than this humble teacher of economics and finance can shoulder. As a result I would be more than happy if formulating tactics and strategy that would be useful in the global-warming battle were taken out of my caring hands, and turned over to high ranking governmental officials – bypassing if possible mastodon conferences where the majority of participants lack a relevant technical background, and many would be perplexed by freshman mathematics at Boston Public.

For instance, a majority of the delegates attending the Kyoto talkathon (in l997) did not have the slightest intention to do the kind of reading and thinking that is necessary to comprehend the economic and political implications of global warming. I am certain of this, because serious people would have insisted upon immediate action, and under no circumstances would have welcomed the introduction of a measure as senseless as emissions trading. What most of those ladies and gentlemen were primarily concerned with was obtaining a ticket to the next global warming jamboree.

Readers who want an important insight into this issue should refer to the work of the Carbon Tax Center (, where the many shortcomings of emissions trading are examined in some detail.


My approach to global warming turns on some conclusions I absorbed when studying and teaching theoretical welfare economics and game theory: the basic issue is rationality! It has to do with whether voters and concerned politicians – or for that matter non-voters and political hacks – adopt or accept political and economic programs that are consistent with their ambitions in life, love, and the pursuit of money or power. As I have found out over the past few years, this is asking for a great deal. Instead, regardless of beliefs about the authenticity of AWG, persons who enjoy thinking that they possess something valuable to contribute to this debate are similar in at least one respect: they are vulnerable to systematic manipulation and self-delusion.

Too many AGW partisans want the main attack against climate problems to be carried out with renewables. They inevitably proclaim that nuclear energy is dangerous or relatively expensive, and they show an unreasonable tolerance toward half-baked schemes like emissions trading. I prefer to believe that crank convictions of this nature should be discouraged at the highest scientific and journalistic levels, since in reality they have been accepted by many politicians and civil servants only because of their political currency. For instance, the resort to emissions trading hardly deserves to be called “foolish simplicity”, which, as the Nobel Prize physicist Wolfgang Pauli added when he coined the term,” is beyond all help.”

Similarly, almost all the climate commentators working the wrong side of the global warming street are believers in the long run availability of oil and gas. Dr Björn Lomborg once stated publicly that oil will last at least 100 years. Actually, if it were close to a thousand it would make little or no difference, because the two basic issues here are the geographic distribution of reserves and the peaking of the world oil output, and peaking could – could, not will – take place during the coming decade. In other words, it makes sense to disregard the way that resource scarcity is generally treated in most of the academic economics literature, where despite the algebra readers are presented with a soap-opera rather than a scientific exposition. It should also be noted that in Stipp’s article the Pentagon plays the role of attentive observer to the climate warming drama, which suggests to me that any indication that oil production was peaking or about to peak would cause the lights to burn later than usual in that impressive structure. This is something we don’t want, because going to war for oil is not a healthy option.


In one of the latest collection of letters to EnergyBiz Insider, a hard-core member of the denial lobby proclaimed that talk about AGW was an integral part of the international socialist conspiracy, following which he insinuated that placing limits on the emission of greenhouse gases would eventually lead to the placing of limits on economic growth. More surprising, some very intelligent technicians, engineers, businesspersons and commentators associated with the important forum EnergyPulse have called AWG a hoax, scam, nonsense, foolishness, etc.

I accept AGW regardless of what it is called, or by whom, because working to suppress greenhouse gases is perhaps the best approach to the installation of a new energy economy – which I regard as essential. I was also informed recently that 400 prominent “scientists” have put their names on a document saying that global warming is hogwash. What we have here is a farce similar to that in the U.S. presidential election in 2004, when a posse of “Swift Boat Captains” was introduced to question the bona fides of Senator John Kerry. The difference between President Bush’s sailor supporters and the above mentioned scientists is that the former were actually captains, though seriously confused about the role of Senator Kerry in the war, while a majority of the ‘scientists’ had as much right to that designation as citizens who received bogus titles at the masquerade balls that were held the night the Bastille changed management.

Some AWG sceptics are often cited in the journal Energy and Environment. A few of those ladies and gentlemen possess impressive academic credentials, although most of them belong in the same category as the foot-loose ‘boffins’ summoned to Dr Lomborg’s ‘Copenhagen Consensus’, and who – before proceeding to the marvellous Tivoli to drink beer – were provided with a bizarre opportunity to challenge the research of important physical scientists. As good luck would have it though, the gradual discrediting of Lomborg and a gallery of know-nothings and wannabees in other parts of the world means that even if real scientists are wrong about AGW, we could still end up with the energy system we deserve. The matter of who knows what where this topic is concerned has been examined by Barry Naughten of the Australian National University (2007).

It seems clear that to satisfy future energy requirements and to deal with (actual or hypothetical) AWG, a comprehensive portfolio of ‘green’ energy sources should be acquired as soon as possible: e.g. solar, wind, optimal amounts of biofuels, and perhaps hydrogen. In addition, according to Jim Beyer (2007), a more sophisticated access to and utilization of large amounts of methane is desirable. My focus though is on nuclear, because as far as I am concerned the solution to the distasteful energy dilemma that might be just over the horizon, as well as a partial solution to a possible climate calamity, is as follows: a base of reliable and comparatively inexpensive nuclear, on top of which is a large and variegated slice of renewables. Unfortunately, there would also have to be another non-nuclear bundle consisting of gas and clean coal, but its size and composition will have to be discussed by somebody else.

An example might be useful. In the Swedish city of Växjö, greenhouse gas emissions have been reduced by 30%, and intentions are to raise this figure to 50% by 2010. Careful attention to best practices technology and management, to include a large increase in biofuel consumption, is supposedly the key element in this program. But I suspect that another pivotal element is the large amount of energy produced in Sweden with e.g. nuclear, even if Växjö may not be a major producer or consumer of this energy source. As suggested above, Nuclear energy (and hydro) provide the base on which other constituents can display a maximum utility! In fact, if the Swedish government were friendlier to the friendly atom, a comparable success might be possible for the entire country, without stresses on industrial output and employment that could burden everybody. The point is that nuclear energy in Sweden has paid its own way! The flexibility inherent in very large amounts of electricity has meant higher employment, lower costs for energy intensive industries, less greenhouse gas, etc, and consequently larger tax returns to finance things like health care and education.

Let me emphasize that what we should avoid is an offbeat foundation of biofuels, wind, sun, ‘small’ hydro, etc, in phase with a nuclear retreat. This is the goofy formula that the hypocrites and deadbeats in Brussels (and elsewhere) obviously favour, and as far as I can tell, what it means is a fall in the standard of living for many of us. This is not a satisfactory arrangement, because as former Prime Minister Tony Blair indicated, even environmentalists should logically prefer nuclear to a decline in their disposable incomes, which might be one of the reasons why we now hear so much about a renewed interest in nuclear-based electricity in virtually every corner of the industrial world.

According to Robert Frank (2006) in his important textbook, “if a single agency had the power to enact globally binding environmental legislation, it would be a straightforward, albeit costly matter to reduce the build-up of greenhouse gases. But in our world of sovereign nations, this power does not exist.”

This conclusion can be adjusted. If a miracle had taken place, and the Kyoto delegates had specified that climate issues should be exclusively dealt with by heads of governments and senior civil servants from the major greenhouse gas emitting countries, meeting several times a year, we might already be in possession of optimal environmental legislation, instead of the sub-optimal trivia that was eventually cranked out. Moreover, the cost mentioned by Professor Frank might have been quite tolerable. As a bonus, observers like myself might have the satisfaction of knowing that the self-important climate vigilantes yawning and waffling at assorted talk-shops were denied the luxury of flaunting their tiresome amateurishness in international forums.

An adviser of President Putin once said that emissions trading was about making money, and not suppressing greenhouse gases. This should never be forgotten, because when that statement was made, the efficacy of emission trading was in doubt. This is no longer the case. It is a scam that will be perpetuated by, among others, the Nordic Electricity Exchange, whose ulterior purpose is to make fools of the lethargic voters and politicians who have come to believe that countering things like peak oil and climate warming with what amounts to a lottery can make their lives sweet and prosperous.


Baltscheffsky, S. (1997). ’Världen samlas för att kyla klotet’. Svenska-Dagbladet.

Banks, Ferdinand E. (2007). The Political Economy of World Energy: An Introductory

Textbook. London, New York and Singapore: World Scientific.

_____. (2007). ‘The architecture of world oil.’ Energy Pulse (

_____. (2004) ‘A faith-based approach to global warming’. Energy and Environment,

Volume 15, Number 5: 837-852.

Beyer, Jim (2007) ‘Comment on Banks’. Energy Pulse (

Frank, Robert H. (2007). Microeconomics and Behavior. New York: McGraw-Hill.

Harlinger, Hildegard (1975). ‘Neue modelle für die zukunft der menshheit’ IFO Institut

für Wirtschaftsforschung (Munich).

Naughten, Barry (2007). ‘Obfuscating the debate on climate change’. The Diplomat

Website (1 November). []

Stipp, David (2004). ‘Climate collapse’. Fortune (Feb. 9, 2004).

Yohe, Gary W. (1997). ‘First principles and the economic comparison of regulatory

Alternatives in global change’. OPEC Review. 21(2): 75-83.

Professor Ferdinand E. Banks
February 5, 2008
The University of Uppsala, Uppsala Sweden

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