In his recent book The End of Doom, Ronald Bailey offers a hopeful take on environmental problems ranging from global population and species loss to climate change. In his chapter on global warming, Bailey argues that many of the policies aimed at reducing carbon emissions, (e.g., cap-and-trade and international accords) have failed. In their stead, Bailey champions technological innovation and an end to fossil fuel subsidies, which he argues will make low-carbon energy radically cheaper than fossil fuels this century.

While Bailey maintains a strong skepticism about the more apocalyptic and alarmist claims that come from climate activists, his main conclusion—earned through years of covering climate science and politics—is that climate change “could become a significant problem for humanity as the 21st century unfolds.” And his review of the scientific debate is quite good: better than most of the narratives we hear from the political Right.

What has led him there? Bailey reports the conclusions of mainstream climate science: that greenhouse gases in the atmosphere have increased, the world has warmed, glaciers are melting, and seas are rising. These facts, he acknowledges, are consistent with climate change induced by the emission of greenhouse gases. On net, Bailey is persuaded by the evidence suggesting that negative consequences from climate change—and the associated ocean acidification—will occur.

Bailey’s discussion of the impacts of extreme weather on lives and property rightly points out that wealth and resilience go hand-in-hand and that the worst impacts of climate change on humanity are still in the future. He concludes that maximizing economic growth makes sense so that society can invest in adapting to climate change.

But one might make a case that Bailey excludes much of the evidence that weather events and disruptions of ecosystems are already attributable, in part, to climate change. There is also the question—still undetermined—of whether the effects of climate change will burden economic growth in the 21st century.

Of course, predictions of future climate change and its impacts involve substantial uncertainty. Greenhouse gas emissions this century will depend on economic and population growth, technological innovation, and climate policies. But even knowing future emissions, there is substantial physical uncertainty in how the climate will respond and ecological and economic uncertainty in what that means for nature and humanity. With a substantial range of possible outcomes, policymakers are making decisions about risks whose severity and likelihood are unknown.

The recent pause in global warming provides an interesting test case for how scientists and policymakers might deal with that uncertainty as the climate change experiment proceeds. The pause—which was a slowdown in the rate of surface warming starting in about 1997/1998—was not predicted by climate models. Consequently, there is a substantial divergence in the temperature increase predicted by climate models and the real world over the last 18 years.

For Bailey, this has two implications. First, it has inspired a scientific debate over how much climate change we should anticipate in the future. That will hopefully allow the scientific community to gain a better understanding of how the climate operates. Second, it has unsettled policymakers’ faith in climate predictions.

This loss of faith, however, may not be justified. A host of studies have attributed this model-data divergence to various factors, including errors in how climate model simulations include the effect of aerosols, and internal variability in the real world not captured by these models. While skeptics maintain that the real problem is that the climate is not as sensitive to greenhouse gas emissions as postulated by the models, that’s not the obvious conclusion.

One way to resolve the debate is to wait and see. But it would take another couple of decades to gain some confidence that we’re in a low sensitivity world, and maybe a half century to know that we are in a high sensitivity world. This is an unfortunate situation for policy makers because waiting to resolve uncertainties in the climate means another 20-50 years of climate policy going forward in a vast sea of uncertainty.

A low or high climate sensitivity will determine whether climate change will be moderate and slow over this century, or big and fast. If one wants to limit the pace or magnitude of global climate change, the implications of a high versus low climate sensitivity are important for the rate of decarbonization.

Whether or not the model-data divergence justifies increased suspicion of climate predictions on the part of policymakers, they are left with substantial uncertainty in future temperatures and that means they are left with a risk.  Given those risks, a loss of faith in the projections of computer models does not mean one must avoid climate policies.

Hedging against such risks with a revenue-neutral carbon tax is the favored policy of the Niskanen Center. Such a price would give an immediate price advantage to the low-carbon energy favored by Bailey. The level of the carbon price can incorporate new information as it is available, revising the carbon price up or down if we discover that the climate is more or less sensitive than presently projected (or climate damages are more or less severe than we predicted). Bailey’s discussion of carbon taxes points to how they are less susceptible to manipulation or corruption than top-down regulation or emissions quotas and can be phased in as countries reach a certain income level. He stops short, however, of supporting them.

Bailey concludes that for supporters of free markets, who are skeptical of claims that climate change is nature’s rebuke of capitalism, advancing policies that “enable market-driven advances in science and technology to cut through the climate/energy conundrum” is a better strategy than underplaying the science behind climate change. Bailey shows us what smart skepticism looks like.  The debate would be better with more of it.