The Economics of Climate Change

The stakes are too high to treat Climategate as just another academic spat.
The emails and documents leaked last week from some of the world's leading climatologists offer a rich trove of evidence that scientists were massaging the data and corrupting the scientific process to support their own preconceptions. But they also offer the beginnings of an explanation for why. In the words of another famous leaker, follow the money.
On its Web site, the University of East Anglia's Climate Research Unit describes how it could barely make ends meet for most of the years since it was founded in 1972, and how most researchers weren't even guaranteed salaries in the early years. "Since 1994, the situation has improved," CRU writes. Why 1994? That was the year the U.N.'s climate change convention came into force. Since then, it has been boom times for those lucky enough to have gotten in on the ground floor of a growth industry powered by grants from governments eager to understand just how quickly we were overheating the planet.
In the 1990s, CRU director Phil Jones helped bring in £1.9 million ($3.1 million) for climate research. But in this decade, according to one of the leaked documents, the total shot up to £11.8 million, including grants from the U.K. National Environmental Research Council, the U.S. Department of Energy and NATO. Another leaked spreadsheet for CRU researcher Tim Osborn shows a similar pattern. Between 1994 and 2000, Mr. Osborn secured research contracts totaling £173,881. Between 2001 and 2007, the last year covered by the file, his haul jumped to £764,055.
Or consider the cash that Michael Mann—another climate establishment figure whose name comes up frequently in the leaked emails—has helped pulled for Penn State University. In 2000, before Mr. Mann joined the faculty, the university banked $20.4 million in research funding for environmental sciences. By 2007, two years after he came on board, Penn State counted more than $55 million a year for environmental research, much of it government funded.
To keep this money flowing, climate scientists needed to keep the fear going. Anything that called into question their most dire predictions of climate catastrophe would put all that funding at risk. On the other hand, the bigger the climate calamity, the more willing governments became to fund global-warming research. Keeping the dissenters on the outside was not simply a matter of academic jealousy. It was in many cases a question of professional survival.
In 1988-1989, the U.S. ponied up 199,500 Swiss francs ($198,995) to the U.N.'s Intergovernmental Panel on Climate Change, or IPCC. By the end of Bill Clinton's and Al Gore's tenure in the White House, America's annual offering to the international global warming authority had ballooned more than 2,600%—to 5.42 million Swiss francs in 2000-2001. The very earth hung in the balance, after all.
The gusher of money that has flowed into climate research does not, by itself, impeach the conclusions reached by the scientists. But it does make clear just how much their professional fortunes became tied to the notion of climate catastrophe. It was the fear of catastrophic climate change, after all, that unleashed the rising ocean of money by which their research came to be funded. Findings that might call the hysteria into question would also, perforce, put at risk the flow of funds into their field.
According to the old quip, the disputes in academia are so vicious because the stakes are so low. In this case, the money trail suggests the reverse—the scientists were so protective of their theory because the stakes had become so high. Under those circumstances, it's no wonder they were tempted to "hide the decline" in temperatures and keep their critics out of the peer-reviewed literature.
For the world's economy, of course, trillions of dollars are now at stake in pursuit of emissions reductions based on the flawed science that these leaked emails have helped lay bare. For the rest of the world too, the stakes are too high to treat this as just another academic spat.