Tyler Cowan thinks about Global Warming and I think about Cowan's thoughts.
One difference is that Cowan seems to know what he is talking about and I haven't really kept up with data and thought on the issue, but that never stopped me before.

First of all, I certainly agre with Brad DeLong that Cowen's post should be entitled
"Tyler Cowen Speaks Sense on Global Warming" not "The Right speaks sense on global warming" as it is. My impression is the right uses any argument at hand to justify their refusal to deal with the issue. Some conservatives talk sense occasionally, but few consistently talk sense as Cowen does.

Cowen has an interesting argument which starts from two premises. First, as is agreed by everyone who is willing to look at the data, human activities are causing global warming. That debate is over except for paid shills of the energy lobby some of whom do not even have advanced science degrees (as I don't). Second the total money metric costs of preventing global warming are less than the costs of global warming plus the costs of dealing with problems caused by global warming minus the benefits of global warming. I don't know enough to know if this is true, and I strongly doubt that it is true, but I will assume it for 4 paragraphs for the sake of argument.

Cowen makes the very important argument that even if the money metric costs of allowing global warming are greater than the money metric costs of preventing it, it is very unlikely that everyone will end up better off in a warmed world than in an unwarmed world. He is admirably able to supress jargon and I am not even trying. The position (straw man?) he is criticising is that the best thing to do is to warm the world and compensate the people who are harmed. The money metric claim means that this will cost less than reducing greenhouse gas emissions would. This sort of argument is very dear to economists especially economists who favor free markets. It is also deeply silly, since there is no chance that the people who are harmed are actually going to be compensated by the people who cause global warming.

Cowen notes that the costs of moderate global warming are likely to be born by people near the equator, while global warming will actually be kind of nice for people in temperate zones. As I said, I haven't kept up but I think this is a reasonable view for the reasons Cowen briefly mentions so I assume it for the sake of argument too.

Cowen's fourth factual premise is that there is no chance that people who live near the equator will be compensated. I think this is certainly true. Aid will flow, but the amount will have nothing (or very little) to do with global warming. I think the claim I just made is stronger than Cowen's claim "some system whereby industrialized nations would compensate or indemnify less-developed nations. No such system exists -- nor is it likely that existing international institutions could implement such a system." He seems to think it is unlikely that such transfers would, in practice, compensate the harmed. I think that such transfers would be almost identical with or without the Kyoto treaty and so it is silly to even think about the chose between more warming with more transfers and less warming with less transfers. I think Cowen argues that a very common argument made by economists is invalid, but can't believe that it is almost always a red herring. In any case we agree, people harmed by global warming will not be fully compensated.

Cowen argues that the likely outcome in a warm world is unjust, because the people who are most responsible for global warming will benefit and the people who are less responsible will suffer. I find, to my complete unsurprise, that I have different beliefs on ethics than Cowen. I am roughly a utilitarian and I am dismayed that the people who suffer small money metric losses are very poor already so the losses correspond to immense human suffering, while the people who might benefit from global warming and will have to pay to reduce greenhouse gas admissions are relatively rich, so a few trillion dollars lost by us is a relatively minor problem. In any case, the two very different ethical views lead to the same conclusion. Again Cowen seems a bit surprised that people who share his policy views don't seem to have given any thought to defending the property rights of people in the third world. I am sincerely surprised by his surprise

My bottom line guess is that Tyler Cowen is not leaving the order of the shrill any time soon (he is the first person formally inducted by Brad DeLong).

Now as to the money metric costs and benefits of global warming and prevention of global warming. I am very ignorant and thus unsurprisingly unconvinced by the claim that the benefits of global warming plus the costs of preventing it are greater than the costs of global warming. First, while moderate global warming might benefit people in temperate zones, it will require immense effort to obtain moderate global warming. As noted by Cowen, the Kyoto treaty does not go far enough to achieve a goal of moderate warming let alone of no warming. Thus a case that moderate warming is good is a case for much greater efforts. That is, I am quite sure that even optimists only forecast moderate warming in the near future with ice cap melting warming in the forseeable future (barring fusion energy breakthroughs or something).
The paired arguments that current policy is no where near enough to prevent global warming and that moderate warming would be OK if only the losers were compensated refute each other.

I would also argue that there is another term missing. Benefits of efforts to prevent global warming. I will just assume that such efforts will be in the form of a tax on energy consumption (a BTU tax). There is no compelling reason to believe that, global warming aside, the optimal BTU tax is zero. Assume that there is no such thing as global warming (or sulfur dioxide or any pollution due to the burning of fossile fuels). The optimal BTU tax would be zero if the real return on fossile fuels in the ground is equal to the real interest rate. This is a well known condition. If the real return is higher, then efficiency is obtained by raising the price. World money metric welfare maximizing choices are privately optimal for consumers only if the price is right in this sense. If the price is so low that the real return on fuel in the ground is greater than the real return on other assets, then a BTU tax has negative social cost even aside from global warming.

There is reason to believe that this is currently true. Consider Petroleum. Its price is determined by the decisions of governments who do not seem to be rational present value maximisers. I doubt that even Robert Lucas would argue that Moamar Qadaffi has rational expectations. Even a rational guy like say Vladimir Putin has a rationally short planning horizon. It is natural for people to consider OPEC a market failure (although the market has generally had the better of OPEC). However, it is very hard to argue that the current price of oil is so low that, in the long run, the real return on oil in the ground will be as low as the real return on capital.

The case for natural gas is, perhaps, even stronger. From orbit the britest area on earth is lit by natural gas flares in the Persian gulf. Even if it is not now feasible and profitable to build pipelines, it is hard to believe that leaving it in the ground until the price rises enough to pay for a profitable pipeline is a bad investment.

Of course the main fossile fuel and global warmer is coal. The case for silly underpricing is weaker than for oil and natural gas, but it is not weak. Most coal is publically owned and mined in large part to protect miners' employment. This does not imply present value maximizing pricing. Even in the USA coal companies demand a high return on coal in the ground because it is a risky investment and rational managers who fear bankruptcy are not risk averse. The risk that coal would be cheap in the future and we have conserved energy too fiercely would not scare us if this risk were shared. For the average person it is not a risk at all but a windfall. This means that the price of coal is almost certainly less than socially optimal. Producers are willing to sell coal at a price below the efficient price because the alternative is to hold a highly leveraged position of debt and coal which would make bankruptcy likely.

I would guess that the costs of controlling global warming are negative. That we should tax energy to conserve exhaustible fossile fuels as well as to reduce global warming.